Google’s planned buy of Motorola Mobility is about patents and the war of mutual destruction in the mobile space. We get that, but it’s also about connected TV and carriers and how the convergence of broadband and data will change our lives. And so I found myself thinking about how, if Google wants to use Android as a way into the home, Motorola’s home automation, set-top box and broadband gear businesses now gives Google a platform from which to jump.

The mobile phone is poised to become our interface with the digital world, including the devices that control our lighting, in-home music and even home temperature. Don’t believe me, ask Qualcomm’s Paul Jacobs or the folks at Sonos or anyone building Android or iPhone remotes for cable. Even Sanjay Jha, the CEO of Motorola Mobility has absorbed a bit of this thinking in some of his comments over the last few years.

So even as the world wonders if Google knows what it wants to do with Motorola’s home businesses, which include baby monitors, Bluetooth headsets and cable gear, it has the potential to make waves with consumers and especially with service providers.

This puts Google back in the home automation market.

Motorola Mobility clearly has been working on the home automation space for awhile. It purchased the startup 4Home last December. 4Home’s software enables home owners to access information — from digital media to energy info, home security and health data — across devices, and remotely and is used by Verizon in home automation/energy management pilots in New Jersey.

On the Google/Android side, Google has been looking to use Android as the layer to connect home devices, from connected light bulbs to other devices. So while, Google killed its separate home energy software PowerMeter earlier this year, it could end up back in the home automation game, this time with Android. And if Android is the dominant layer, Google didn’t really need PowerMeter, which was aimed at utilities. Android and Motorola’s 4Home software is aimed at carriers, a relationship Google is more familiar with, especially on the wireless side.

Wait, we’re buying our gear from Google?

However, on the wireline side Google may still have some fears to lay to rest. The company, which used to be ISPs’ favorite whipping boy (until they moved on to hating Netflix) will soon find itself owning through Motorola Mobility a large portion of the set-top box market as well as some of the gear inside the cable plants. According to Multichannel News this deal has created some strange new bedfellows in the service provider world:

In any case, the deal has shifted dynamics in the industry quite significantly: “Comcast overnight has become a huge customer of Google, and Comcast has no way out of that in the short run,” the executive said.

This sort of convergence may have been unintentional, but it’s also something that should be expected as broadband, not only brings people closer together, but also forces our networks and devices to merge. So soon Google will have not only have close relations with wireless carriers because of Android, but also wireline ISPs that have traditionally been cooler to the search giant.

Will it help wireline carriers keeps consumers in a pay TV world, or help ISPs deliver differentiated home automation services so they can forestall the process of becoming dumb pipes? Or might Google look at the unexpected businesses it picked up with its patents and dump them like I dump that insanely pink lipstick color I get whenever I get my “free gift with purchase” at the makeup counter?

Google’s acquisition of Motorola Mobility will not affect Motorola’s patent-related lawsuits against Apple, as the search company revealed on Monday it has no plans to rescind those legal complaints.

Motorola will continue to operate as a separate entity under Google, building handsets running Android as it has done before. And the company will also continue to pursue any litigation it is involved in, Google Chief Legal Officer David C. Drummond said in a conference call.

“Those lawsuits will continue and will be managed by Motorola as they are now…” Drummond said. “I don’t believe there’s anything more to add.”

Drummond and other Google executives also declined to talk about the company’s potential legal strategies going forward, now that it is set to own Motorola’s massive patent portfolio. Motorola CEO Sanjay Jha said his company has 17,000 issued patents, and 7,500 patent applications that Google will now control.

“We will be in a very good position to protect the Android ecosystem for all of our partners,” Drummond said.

Google’s purchase of Motorola for $12.5 billion comes as lawsuits continue to mount in the wireless industry. Google’s chief executive, Larry Page, said on Monday that patent litigation by Apple and Microsoft, which he feels is “anticompetitive,” led to the Motorola deal.

Motorola fired the first salvo against Apple last October, when it sued the iPhone maker in the U.S. International Trade Commission. Motorola has argued that the iPhone, iPod touch and certain Macs are in violation of patented inventions it owns.

In all, Apple has been accused of violating 18 patents related to a range of technologies, including 3G, GPRS, 802.11 wireless and antenna design. The two companies reportedly attempted to negotiate an agreement out of court, but Motorola claims that Apple “refused” to pay for a license.

Apple quickly shot back with its own lawsuit, accusing devices like Motorola’s Droid smartphones of violating six patents related to multi-touch gestures found on the iPhone.

Lawsuits in the wireless industry are so prevalent that Motorola even made a preemptive strike against Apple, and asked a U.S. District Court to invalidate 11 patents owned by the iPhone maker. Motorola told the court that Apple has a “history of asserting” that handsets running Google Android violate the 11 named patents.

Those same 11 patents were included in an earlier lawsuit that Apple filed against HTC. The patents in question were not, however, included in the complaint Apple would eventually file against Motorola only a matter of weeks later

Google said today that it had agreed to buy Motorola Mobility for $12.5 billion, adding valuable intellectual property and getting the Internet search giant directly into the handset business.

Google said it would pay $40 a share in cash for Motorola, a 63 percent premium to the company’s closing price on Friday.
The deal shakes up the Android world. For the first time, Google will have a direct hand in the mobile business that it has fostered from a distance. While it provides the Android software critical to running millions of smartphones and tablets, it has yet to get into the design and manufacturing business itself, aside from a few experimental models with handset partners such as HTC and Samsung Electronics.
With Motorola, Google also gets a treasure trove of patents to defend itself and its partners with against a rising tide of legal opposition. Over the past few months, major technology players such as Apple and Oracle have sued either Google or its partners in an attempt to slow it down competitively and extract licensing fees.

Jha talked up the strength of its patent portfolio during the company’s last quarterly conference call, suggesting he may get into the legal fray as well. The company already has an outstanding dispute with Microsoft and Apple. Last month, billionaire activist investor Carl Icahn disclosed that he was pushing for Motorola to sell its patent portfolio with the need for intellectual property at an all-time high.
Motorola, along with HTC, was a major early supporter of Android. Chief Executive Sanjay Jha scrapped the company’s other projects and focused solely on Android, which paid off immensely when Verizon Wireless chose its original Droid to push as its hero phone during the 2009 holiday season. The company more recently had a flagship phone come out with the Atrix for AT&T, which Chief Executive Randall Stephenson used at one point, and also partnered with Sprint Nextel. Last month, it reported stronger second-quarter results, and hinted at a stronger fourth quarter.

But the company has struggled recently. While the Atrix featured heavy promotional support from AT&T, it wasn’t a breakout hit. Its first tablet, the Xoom, failed to make a dent in the market, even after a price cut. And the company’s long-delayed Droid Bionic for Verizon Wireless isn’t expected until next month. The 4G capability for its Xoom is still unavailable despite hyping the feature at the Consumer Electronics Show in January.

It’s unclear what role Motorola will play in Google, and whether it will continue to manufacture smartphones under its own brand.
Google, however, attempted to maintain its neutral stance in Android land even after the deal.

“Our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community,” said Andy Rubin, senior vice president of mobile at Google. “We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”

With the entry of Google into the handset-making market, the search giant has just declared a number of things, most especially that its own future is all about mobile.

With the $12.5 billion purchase of Motorola, the struggling but iconic maker of mobile phones and tablets, Google has put a huge stake in the ground in this highly competitive market and, thereby, shaken up the entire ecosystem.

A lot of this is about patents, as Google CEO Larry Page said in his blog post about the mega-deal this morning, and acquiring a bigger portfolio that Google has long sought for its Android mobile operating system and been unsuccessful at getting for itself despite onerous efforts. Since Motorola has been in the mobile arena for so long, it has a large trove of important ones.

But the dramatic acquisition by Google is also a declaration that mobile is more important to it than the skein of alliances it has built for Android with phone makers worldwide, as part of its objective of making it the dominant mobile platform.

While Google has been reaching out to other hardware partners to assure them and has said they all will remain the same in Android land, the large mobile manufacturers who have placed their trust in Google — especially Samsung or HTC — have to be wondering what to do now.

Make no mistake — they already resent Google from time to time, the way Compaq or Dell has resented Microsoft in the PC business.

But, since Google already showed favoritism to Motorola by letting them do the first Honeycomb tablet, the Xoom (although it didn’t do any good), that discomfort will only increase now.

The impact on everyone — from Microsoft and its partner Nokia to Apple to Research in Motion and, also, to all the wireless carriers — will be felt immediately.

And, of course, by government regulators, who has watched warily has Google has marched into business after adjacent business to its core search one. This deal is sure to put all of Google’s businesses in the crosshairs of rivals, who will agitate for fervent investigations.

While Android has been conceived at Google has an “autonomous unit” with the company — run by longtime mobile exec Andy Rubin — it has now entered a new and perhaps dangerous phase for all involved, including Google.

Because while such a union is not uncommon in the mobile business — Apple and RIM do software and hardware together and Google has released its own Nexus phone (made by others) — no one has done it via acquisition and in such a definitive way.

And what an acquisition it is. Or, perhaps more accurately, could be.

Please see this disclosure related to me and Google.

Google Inc. (GOOG), facing a growing threat of intellectual-property lawsuits, acquired a batch of patents this month from International Business Machines Corp. (IBM) to bolster its portfolio.

“Like many tech companies, at times we’ll acquire patents that are relevant to our business,” the Mountain View, California-based company said yesterday in an e-mailed statement.

Google’s Android mobile operating system has been targeted in at least six legal complaints, increasing its need for intellectual property to defend the company against litigation. Google, the world’s largest Internet search company, also aims to curb abuses of the patent system. It’s calling on Congress and the Federal Trade Commission to rein in lawsuits, and asking the U.S. Patent and Trademark Office to take closer looks at patents being used in litigation.

“The tech industry has a significant problem,” Google General Counsel Kent Walker said in an interview earlier this week. “Software patents are kind of gumming up the works of innovation.”

Google’s rivals have said the Mountain View, California- based company is critical of the patent system because it has few patents of its own and entered a smartphone market where companies had been researching and selling products for years before Android phones went on sale in 2008.

The Android system is a free, open-source program that relies on some nonproprietary features Google didn’t create and allows outside developers to modify the code. That has left the company vulnerable to claims that it built Android on the backs of research done by other technology companies.

Google, which had $39.1 billion in cash and short-term investments as of June, put in an initial $900 million offer in April to buy the patents of bankrupt phone-equipment maker Nortel Networks Corp. It was outbid by a group that includes Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Research In Motion Ltd., which all make devices that compete with Android phones.

Google rose $3.72 to $610.94 yesterday in Nasdaq Stock Market trading. The shares have climbed 2.9 percent this year.

May 24 (Bloomberg) –France Telecom SA (FTE) Chief Executive Officer Stephane Richard said search company Google Inc. (GOOG) may be willing to cooperate on a solution to solve the quarrel between operators and Web companies over infrastructure investments.

Richard talked with Google CEO Larry Page about the matter last week in Mountain View, California, he said in an interview in Paris today. The France Telecom CEO said he wouldn’t “exclude” the possibility of announcing some kind of formal co-operation on a solution for network investments at a later date.

Google Inc. is preparing as early as Tuesday to unveil a new online music service similar to a service recently launched by Amazon.com Inc., according to people familiar with the matter, a move that escalates the battle to create the next generation of Internet businesses for storing and listening to music.

Google, like Amazon, hasn’t secured licenses from the four major recorded-music companies, according to these people, and is likely to include a system that functions much like a remote hard drive.

Users of the service are expected to be able to listen to songs they have uploaded to the service in a so-called streaming mode but won’t be able to download the files themselves. That limit appears to be a bid by Google to hinder the service from being used to spread pirated music.

A Google spokeswoman had no comment.

Google is likely to announce the service Tuesday at its annual Google I/O developers conference in San Francisco, these people said. Initially, the service is to operate in a testing mode, and not be available to the public at large.

The service is unlikely to be tied to an online music store like Amazon MP3, which gives users the option of adding new songs to their music locker at the time they buy them.

The system Google is likely to unveil is known within the technology and music industries as a “passive” locker. Such systems generally are believed by people in the music industry not to require licenses from record companies. But that kind of system also tends to offer a fairly limited set of features. Amazon Cloud, for instance, is considered by many in the industry to be a first step toward a more ambitious offering that Amazon could create once it has licenses in place.

With licenses from music companies, a locker-service operator could give users instant access to songs stored in central servers, rather than making those users upload every song in their music collections.

The launch comes as Apple Inc. is in negotiations with major record labels to secure licenses for a much more robust online music service than either Amazon’s or the one Google has in the works, according to these people. It is unclear when Apple might launch such a service, but most of the technical work has been complete for months, according to people familiar with the matter. An Apple spokesman declined to comment.

Spotify AB, based in Sweden and the U.K., has been attempting for months to secure licenses that would allow it to launch its music service in the U.S., but it hasn’t been able to persuade major music companies to let it bring the service, which is popular in Europe, to the U.S.

That is mainly because record-company executives don’t believe that Spotify makes enough money. Recent limits on how much music a user can listen to without paying could make the service more attractive to record labels, according to people familiar with the matter.

Many record companies felt blindsided by the launch of Amazon Cloud, and the Seattle-based online retail company hasn’t significantly upgraded its service since it launched

SAN FRANCISCO – Search and advertising still pay the bills at Google, but as the company moves into new markets such as mobile and Web apps, increasingly its fortunes will be tied to developers outside the Googleplex.

At this week’s Google I/O developer conference here the company will be reaching out to thousands of these third-party developers in an effort to enlist their help in creating robust ecosystems for up and coming Google products. How successfully Google is able to tap into this developer culture to fuel growth in Google products will determine Google’s standing in the competitive landscape.

In mobile, this means that Google will have to get app developers to think of its Android smartphone and OS first rather than as an afterthought to developing apps for Apple’s iOS platform. It also means creating an ecosystem that pushes a cloud-based computing architecture with Web apps at its core.

On each front Google faces challenges. Despite the fact that it now dominates sales of smartphones in the U.S. and around the world, Google’s Android platform appears to be struggling to keep the attention of developers who worry about the platform’s fragmentation issues. These developers also worry about their ability to make money from the apps they create for Android.

Meanwhile, when it comes to Web apps, Google faces the challenge of improving the Web’s programming standards–in particular so that Chrome OS helps illustrate the power of Web apps rather than their shortcomings.

Android or bust
Google’s Android mobile OS has had a meteoric rise over the past couple of years since the first Android smartphone was introduced in late 2008. The OS has quickly climbed from zero market share to owning close to 23 percent of the worldwide smartphone market, according to Gartner. And Android’s march toward dominance is expected to continue. Gartner projects that Android could snag as much as 38.5 percent market share worldwide by the end of this year. And by the end of 2012, the Android OS may account for roughly 49 percent of all smartphones shipped throughout the world.

Meanwhile, Apple, Google’s closest competitor, is expected to trail Android with about 19.4 percent market share worldwide at the end of 2011. And about 18.9 percent market share worldwide by the end of 2012, according to Gartner.

Despite this growth, smartphone app developers seem hesitant to fully embrace the Android platform. Instead of developing new mobile applications for Android smartphones and tablets first, developers are still looking to Apple’s iOS platform initially. And yet, the number of apps for Android smartphones in particular is growing. Some experts predict that the number of smartphone apps in the Android Market may even surpass Apple’s App Store this summer in terms of the total number of mobile smartphone apps it has available.

But despite the fact that the Android Market is catching up in volume doesn’t necessarily mean that Android has become a top priority for developers.

“It’s not just the quantity of apps, but it’s the quality of those apps,” said Scott Webster, who writes for CNET’s Android Atlas blog. “And it’s about whether developers are thinking of Android first when coming up with new capabilities.”

While developers clearly recognize Android’s long term importance in mobile, they see Apple as a more lucrative path initially.

In a recent survey of more than 2,700 app developers in April conducted by IDC and Appcelerator a software tool kit provider, app developers indicated that creating applications for Apple’s iOS products took the highest priority for them. And Android followed as a second priority.

“Interest in Android has recently plateaued as concerns around fragmentation and disappointing results from early tablet sales have caused developers to pull back from their previous steadily increasing enthusiasm for Google’s mobile operating system,” Appcelerator said in a statement when the report was released.

Nearly two-thirds or about 63 percent of respondents said that device fragmentation in Android poses the biggest risk to the platform. This isn’t surprising especially for smaller developers who have fewer resources to sink into their endeavors.

Paul Zimmer, founder of FlatPack, which developed a game for the Apple iPad, said that his company is holding off on developing apps for the Android platform. The No.1 priority for him and his small team right now is getting new games and apps out for the Apple iPhone and iPod Touch devices.

“The concern for us with Android is the fragmentation issue,” he said. “With Apple we’re guaranteed a discrete number of devices, screen sizes and device capabilities. But with Android the testing burden is so much higher because there are so many different variables.”

Scott Kveton, CEO of Urban Airship, a company that offers developer tool kits for creating apps across platforms, agrees that the fragmentation issue is a deterrent for many developers.

“There’s the fact that manufacturers are coming out with different devices with different screen sizes and different hardware capabilities,” he said. “But there’s also the fact that so many devices are running different versions of the Android OS. And the carriers and handset makers have much more say over which version runs on which devices.”

Indeed, there are several Android handsets in the market that have still not gotten the Android 2.2 Froyo update let alone the latest 2.3 Gingerbread Android update.

Kveton said this is not the case with Apple, which controls the software platform updates and ensures that the same software release is made available for all compatible iOS devices at the same time.

Another major barrier for some developers is the fact that it’s difficult to make money from Android apps. Zimmer admits that making money in any major mobile app market is getting harder, especially for smaller developers. The sheer number of apps in either the Apple App Store or the Google Android Market make it extremely hard for a small company to break out and to be discovered by users. But with Android it’s even harder to make money because the Android user base is less likely to spend money on apps, he said. He said that even large app developers are making most of their money on the Android platform from advertising.

Even with these challenges, Urban Airship’s Kveton notes that Android will likely overcome these barriers as the platform matures.

“Android lags Apple by about 18 months in many areas, including in-app purchasing and push notification,” he said. “So in another year or so, I expect Android to catch up in terms of how developers view the platform. There will be so many devices out there, that no matter how much of a pain it might be, they’ll have to develop for it.”

Kveton predicts that the U.S. developer community may continue to focus on Apple for a while longer. But he believes that markets outside the U.S., such as Europe and Asia, where Android is growing rapidly, will likely view Android as the No. 1 platform to develop for within the next year or so.

“Google may not have to do anything and the developer community will gravitate toward Android in some markets,” he said. “Just look at Microsoft. It didn’t matter much if the Windows platform was a pain to develop for. They still were able to build an ecosystem because there was so much money to be made there. And with Android’s installed base growing so rapidly, it offers the same thing.”

Web Apps: The next frontier?
Android is only one facet of Google’s developer interests, though. At the same time, the company also has long used Google I/O to tout the idea of Web-based applications.

Web apps serve Google’s interests in different ways. Of course it’s got its own–the online Google Apps suite that competes with Microsoft Office for $50 per user per year. Former CEO Eric Schmidt called Google Apps the company’s next big billion-dollar revenue opportunity after search.

But search is the real cash cow at Google today, and the company’s broad advocacy of Web apps probably is more closely aligned with search. The more time people spend online–and they will when compelling destinations such as Facebook lead them there–the more times they’ll end up at Google’s search box.

Web apps are maturing, but there’s a huge amount of work to be done–standardization, browser support, developer training. There’s healthy development, but today it takes Herculean effort to build something as complex as Google Apps.

The good thing about Web apps is they’re inherently cross-platform–to an extent. Those with older browsers, with sluggish JavaScript performance and no support for new Web standards, can’t take advantage of those features. That’s why there’s Google Chrome–the browser with which Google is working to catalyze faster change in the Web market.

It’s not clear exactly how the arrival of Chrome sat at Microsoft, but it certainly didn’t lower the priority of producing IE9, which has put Microsoft back in the browser game. Over the next years, with the gradual spread of Windows 7 and its successors, expect IE9 to spread as a mainstream browser.

Google has an interesting reason to build Chrome: to further its other businesses. Google can–indeed, it does–use Chrome as a mechanism to launch new technologies to the Web-app world. Among them are SPDY for faster server-to-browser communication, Native Client for faster execution of Web-based programs using a computing device’s built-in hardware, notifications to alert Gmail chat users to new messages.

Getting Web developers and rival browser makers to adopt such technologies isn’t easy, but it’s easier when Google has a browser it can use hammer out the technology and to show the benefits. And it also gives the company a real seat at the table during Web-standards discussions.

Web programming is a fixture of the programming world, competition with native apps notwithstanding. A less certain future awaits Google’s Web-only operating system, Chrome OS.

This software benefits from the vast amount of Web programming under way, giving it a big head start over operating systems that must start from scratch. But Chrome OS also is a gamble that people will find a use for devices that can handle Web apps and nothing else.

Chrome OS strives to reach beyond limitations of present browsers with features such as offline storage for working when there’s no network connection and Native Client for better performance.

The trouble with those options, though, is that developers must be recruited to support them, and it’s not clear whether they will unless Google can convince other browser makers to add support. The top two browser makers, Microsoft and Mozilla, have shown little enthusiasm for Native Client, for example.

Google is a patient company, though. And meanwhile, there’s Android.

SEOUL—Two South Korean search portals filed a complaint Friday with the country’s Fair Trade Commission against Google Inc. for allegedly limiting their access to smartphones using the Android operating system.

NHN Corp.—the owner of Naver, South Korea’s biggest Internet search engine by revenue—and Daum Communications Corp. called for the antitrust regulator to investigate their claims that Google is restricting local mobile service providers and Android smartphone manufacturers from preloading some mobile search window applications, including their own, on smartphones.

The companies also asked the regulator whether such a restriction constituted an unfair business practice.

“Through a marketing partnership with major smartphone producers, Google has prohibited other market players from preinstalling their search window or related applications,” NHN said in a statement.

A Google spokesman said the company hasn’t yet been contacted by South Korea’s Fair Trade Commission. “We…will work with them to address any questions they may have,” the spokesman said. “But Android is an open platform and carrier partners are free to decide which applications and services to include on their Android phones.”

Android smartphones sold in South Korea provide the Google search engine by default. Korean search portals complained that this makes it very inconvenient for phone owners to switch to a different search window.

Android phone users in South Korea can download and install rival search portal applications on their phones, but Daum and NHN say they aren’t able to have these applications installed on the phones prior to purchase.

Naver has a market share of around 56% in the domestic mobile search market, while Daum has around 16% as of last month, according to Korea-based market researcher Metrix Corp.

“Google’s market share in the local Internet search market only accounts for around 2% but due to such an unfair act, its share in the mobile market is fast rising in Korea, and it stands at around 15%,” a NHN spokesman said.

Daum confirmed it jointly filed the complaint Friday with its South Korean rival.

U.S.-based Skyhook Wireless Inc. filed a similar complaint against Google in the Massachusetts Superior Court in September, alleging the search giant cost it tens of million of dollars by interfering with a contract to put its mapping technology on Motorola Inc. phones.

In March, Microsoft Corp. submitted an antitrust complaint with the European Commission, claiming Google restricts the ability of Microsoft’s Bing search engine and its Windows Mobile phone apps to find and return links to YouTube videos. Google owns YouTube.

Jonathan Rosenberg, senior vice presiedent of product management at Google Inc. Google Inc. (GOOG) Senior Vice President Jonathan Rosenberg plans to step down, a move that may give freer rein to new Chief Executive Officer Larry Page as he tries to shake up the company.

Rosenberg announced his resignation today, the Mountain View, California-based company said in an e-mailed statement. He oversaw the design and creation of all of Google’s products, including consumer and business services.

Page, who took the CEO job from Eric Schmidt today, has pledged to create a more nimble, startup-minded culture at the company. The departure of a senior leader may help that plan by making business divisions more autonomous, said Stephen Miles, vice chairman at executive consulting firm Heidrick & Struggles.

“What they will try and do is embed people in specific business units in order to speed up those businesses, instead of having an overarching group of people who pick and choose where they spend their time,” Miles said.

Rosenberg joined Google in 2002 after working at Excite AtHome Corp., Apple Inc. (AAPL) and other Silicon Valley companies. Last month, Google awarded him a bonus of $1.7 million and $5 million in stock.

“Jonathan is phenomenal — hugely energetic, strategic, a man of real principle who always puts the user first,” Page, 38, said in a statement. “He’s been crucial to our success over the last nine years.”

Need for Speed
Page, who co-founded Google with Sergey Brin in 1998, faces the challenge of invigorating a company that now has annual revenue of almost $30 billion and a market value approaching $200 billion.

“Every time we increase the size of the company, we need to keep things going to make sure we keep our speed, pace and passion,” he said in an interview earlier this year.

Schmidt, 55, had served as CEO for a decade. He will stay with Google as executive chairman.

Google fell $4.12 to $587.68 today in Nasdaq Stock Market trading. The shares have declined 1.1 percent this year.