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Why any great career move should be known as 'a Schmidt'

An observation spurred by Novell’s acquisition by Attachmate

By Paul McNamara on Mon, 11/22/10 - 3:30pm.

eric Schmidt

Chances are no one today has heard Eric Schmidt muttering under his breath, "Dang, I could have worked at Attachmate."

The thought arose as I compiled a Novell corporate timeline to accompany our coverage of its acquisition by Attachmate. Schmidt was CEO at Novell in 2001 when he was asked to and did indeed take the top spot at Google. The rest is not only history but has prompted me over the years to wonder: Has anyone in any field ever made a better career move?

I say no.

You say who wouldn't rather run Google than Novell?

[Schmidt makes appearance at top of Network World's "Top 10 Tech Turkeys of 2010"]

You're thinking 2010 Google, the one whose stock price is sniffing at $600, good for a market cap of some $186 billion. In 2001, the wisdom of Schmidt's decision was not so readily apparent, even though Novell had seen its best days, and, while a mere three years removed from the Stanford dorm room of its founders, Google was already being used as a verb by the more tech savvy.

I distinctly remember thinking, "Google? Schmidt? Really?"

My bad ... but I was thinking 2001 Google, as were a whole lot of other journalists.

The Wall Street Journal noted that although Google was attracting 50 million unique visitors a month, Yahoo was generating four times that number and Yahoo was not exactly making a mint.

... Google's basic business model remains questionable. Because Google doesn't offer banner ads or other general advertising displays on its Web site, it must rely on discreet ads that are supplied only when users search for specific key words. These so-called sponsor links are text-only and are highlighted in different colors to distinguish them from search results.

How can anyone expect to build a real business around those itty-bitty ads?

In fact, one of Schmidt's earliest statements upon being named Google CEO was to assure one and all that the company was indeed in the black. "We are quite profitable," he said. "We are not talking about 1%."

Here's what amounted to Schmidt gushing about the financial situation he was inheriting:

People say, "Google, interesting technology, wonderful brand, but how do you make money?" The founders, in their inimitable way, have managed to build a company that was profitable in the March quarter in a cash flow basis, and in June, we were profitable on a (generally accepted accounting principles) basis. It's amazing, but even in the summer, which is traditionally slow from an advertising perspective, it looks like we will continue this fine performance.

Think they worry about summer doldrums now?

Keep in mind that this was 18 months after the pop of the dot-com bubble and there were those who viewed Google as just another eyeball-aggregating, revenue-light suspect.

Here's an excerpt from a Forbes analysis of what Schmidt was getting himself into, along with anyone else who might be rash enough to jump on what was then a Google IPO that was still three years off:

The question most investors should be wondering is what kind of business can Google really have? The technology may be immensely popular, but as failures of Web portals such as Excite@Home and Yahoo have proven, consumer popularity doesn't equate with profits.

Danny Sullivan, editor of SearchEngineWatch.com, says profitability is a reasonable expectation. The company has already gathered high-profile customers such as Cisco Systems, Yahoo, and Palm.

"Search is the second most popular activity on the Web -- it would be absurd to think businesses can't make a profit off it," Sullivan says.

We'll believe it when we see it.

Bet the Forbes writer believes it now. Bet Schmidt believed it as he cleaned out his desk at Novell.

But I'll also bet he didn't see himself being worth $5 billion.

And I'll guarantee he never thought he'd just made the single greatest career decision in the history of gainful employment. 

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