Since Schmidt joined what was at the time a fledgling company called Google he has built it into the globe-straddling tech giant it is today — and changed the way people use the internet.
He will remain on the board as a science and technology adviser and Alphabet said plans to appoint a non-executive chairman.
Alphabet has a market cap of $741bn and is expected to bring in over $100bn in annual revenue in 2017, according to analyst estimates.
Under Schmidt the search division of Alphabet, Google, remains the company’s core revenue driver while what the company calls its Other Bets — including the Waymo self driving car business and the Project Loon WiFi-enabled weather balloon venture — have made mixed results.
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Larry Page, the Alphabet chief executive and co-found who first hired Schmidt to provide “adult supervision” for him and Sergey Brin, said:
Since 2001, Eric has provided us with business and engineering expertise and a clear vision about the future of technology. Continuing his 17 years of service to the company, he’ll now be helping us as a technical adviser on science and technology issues. I’m incredibly excited about the progress our companies are making, and about the strong leaders who are driving that innovation.
Why did Eric Schmidt step down?
Schmidt himself said:
Larry, Sergey, Sundar and I all believe that the time is right in Alphabet’s evolution for this transition. The Alphabet structure is working well, and Google and the Other Bets are thriving. In recent years, I’ve been spending a lot of my time on science and technology issues, and philanthropy, and I plan to expand that work.
John Hennessy, a member of Alphabet’s Board since 2004 and the lead independent director since 2007, added:
Over 17 years, Eric has been tremendously effective and tireless in guiding our Board, particularly as we restructured from Google to Alphabet. He’ll now be able to bring that same focus and energy to his other passions, while continuing to advise Alphabet.
However, the New York Post reported Schmidt would now turn developing artificial intelligence for defence, quoting an anonymous source, adding Schmidt has been spending more time on his sustainability foundation.
The US tabloid also suggested the move had rekindle rumours that Schmidt could be accused of Harvey Weinstein style sexual harassment.
Schmidt’s legacy — taking Google global
As Google chief exec Schmidt has influenced not only the direction of the company but of the entire internet. In 2007 PC World magazine listed Schmidt as number one on its ranking of the 50 most important people on the internet.
Under Schmidt Google went public in 2004, introduced the Android mobile operating system — now the world’s most used computer operating system — and restructured the company to become Alphabet in 2015.
According to Bismarck Lepe, a Google employee from 2003 until 2007, while Page and Brin focused on Google’s technology and the product strategies, Schmidt was responsible for figuring out how to scale every product to a global level.
Shuman Ghosemajumder, a Google employee from 2003 until 2010, told Reuters that shortly after the IPO, Schmidt spoke at an all-hands meetings and said that he, Page and Brin had the ambition of making Google a $100bn company.