Google still searching for a CFO

By Yi-Wyn Yen

For a chief financial officer in Silicon Valley, Google’s Georges Reyes has had a smooth ride, what with the search giant’s sky-high stock, $13 billion in cash and $225 billion market cap.

Reyes announced in August that he would leave the company by year’s end. But Google’s quest for a new CFO — its most high-profile opening since it went public — hasn’t been easy. In fact, Google may not be ready to fill Reyes’ post by the time he departs.

A Google spokesperson says the company won’t comment on its hiring process and will make an announcement when it names a successor.

Google (GOOG) not only needs to find an experienced finance guru who can help the company expand into new growth areas like mobile communications, it must also recruit someone who understands the company’s quirks. (Among them: Its don’t-be-evil-mantra and a policy of letting employees spend part of their time pursuing their own projects.) “The old guard may have the skill set, but they may not be a good cultural fit,” says Bear Stearns analyst Robert Peck. “A lot of people have thrown their hat in the ring, but this is a difficult position to fill.”

Says Jenna Fisher, an executive recruiter with Russell Reynolds, whose firm consults for Google: “Right now there’s a lack of talent across the board for technology CFOs, especially for public companies. There’s a huge demand going around for CFOs, but not a big supply. I do about 15 CFO searches a year, and almost all my leading candidates have multiple offers elsewhere.”

Headhunter Russell Boyle of Egon Zehnder International, which is helping Google find a new CFO, disagrees that it’s “a problem search.” “This is a very smart group of people making this decision,” says Boyle. “They’re not being indecisive. They’re being thorough.”

No list of leading candidates to replace Reyes has emerged, according to industry insiders and analysts — a sign of how stealthily Google has conducted its search. One potential contender cited by several sources, however, is Google treasurer Brent Callinicos, who was hired in early 2007 from Microsoft (MSFT).

Analysts say Google needs a CFO that moves beyond balancing the books to being more involved with its rapidly expanding business plans. The company has made a number of aggressive moves this year to expand beyond paid search. Its $3.1 billion deal to purchase display advertising company DoubleClick is expected to be approved by the Federal Trade Commission at any time. Google has also made a much-publicized foray into the mobile business with its Android platform and plans to bid in an upcoming wireless spectrum auction.

“George was great for the initial years, but Google has grown so big and so fast that it now needs someone more substantial who has more experience,” Peck says. “Someone who’s willing to risk the big bets.”

Reyes, 53, announced on Aug. 28 that he was retiring but did not give a specific reason for leaving. According to regulatory filings, Reyes has sold more than $200 million of shares and his annual salary nearly doubled this year from $250,000 to $450,000.

His penchant for being plain-spoken landed him into hot water at times, most notably during a Merrill Lynch conference in February 2006. His comments that the company’s growth was unsustainable and that Google needed to find other ways to generate revenue sent shares plunging by more than 7%. Later that day, Google issued a statement suggesting that Reyes had misspoke.

Reyes and Google CEO Eric Schmidt had worked together at Sun Microsystems during the 1980s. Reyes held a number of accounting roles during his 13-year stint at Sun, including VP treasurer, audit director, and corporate controller. Prior to joining Google, Reyes had served as an interim CFO of ONI Systems.