Google co-founder Page takes over, targets Facebook

Google co-founder Larry Page talks to reporters as CEO Eric Schmidt looks on, in Sun Valley, July 9, 2009.

Credit: Reuters/Rick Wilking

By Alexei Oreskovic

SAN FRANCISCO | Thu Jan 20, 2011 6:52pm EST

SAN FRANCISCO (Reuters) - Google Inc co-founder Larry Page will take over as CEO from Eric Schmidt, a surprise that signaled Silicon Valley's most powerful Internet company was taking the offensive against fast-moving rivals like Facebook.

Schmidt will step aside on April 4 and make way for Page -- who created the company with fellow Stanford University alumnus Sergey Brin in 1998 -- to take the reins of a company that has dominated Internet search for a decade but is in danger of losing traffic to social networks like Facebook and Twitter.

"Day-to-day adult supervision no longer needed!" Schmidt tweeted after the announcement.

Schmidt, who became CEO in 2001 to bring more management experience to a then-fledgling company, will assume the role of executive chairman, focusing on deals and government outreach, among other things. Brin will concentrate on strategic projects.

"Larry is ready. It's time for him to have a shot at running this," Schmidt told analysts on a conference call.

Shares in the Internet search and advertising leader rose about 2 percent to $639 in extended trading.

Just days ago, Apple Inc CEO Steve Jobs announced a leave of absence, leaving lieutenant Tim Cook in charge of day-to-day operations. Like Google, Apple also announced results this week that blew past Wall Street's estimates.

"The Street will think it's a negative, that there is probably some issue going on. Google is trying to get more efficient and trying to get a tech guy in the seat to compete with Facebook," said UBS analyst Brian Pitz. "I don't think it changes anything strategically where the company is headed."

News of the change came as Google reported a 29 percent surge in both net profit and net revenue that beat forecasts.

Net income, excluding items, of $8.75 a share outstripped Wall Street's average forecast of $8.10.

Net revenue, excluding fees paid to partner websites, was $6.37 billion. Analysts polled by Thomson Reuters I/B/E/S, on average, were expecting net revenue of $6.06 billion.

STREAMLINING

The world's top Internet company is recruiting and going on an acquisitions spree, aiming to ensure its online products remain popular as surfers turn to new services like Facebook -- now the most heavily trafficked website -- and wireless gadgets.

On a conference call with analysts, Google CFO Patrick Pichette said a 10 percent, across-the-board pay raise instituted late last year was a direct attempt to staunch a flow of talent to hot Web upstarts in the Valley.

Google tried to buy fast-growing online local-shopping service Groupon for $6 billion but was rebuffed, Chicago Breaking Business, a Tribune Newspaper website, and other news outlets reported.