Google names co-founder Larry Page as CEO in surprise move

(01-20) 14:56 PST San Francisco -- Continuing a veritable changing of the guard across Silicon Valley this week, Google Inc. announced Thursday that co-founder Larry Page will become chief executive of the online search giant, replacing Eric Schmidt in a surprise management shake-up.

The news closely follows Apple's revelation on Monday that CEO Steve Jobs would go on an indefinite medical leave, with Chief Operating Officer Tim Cook assuming day-to-day control. Separately on Thursday, Hewlett-Packard Co. appointed five new directors, including former eBay CEO and California gubernatorial candidate Meg Whitman, as four stepped down.

Page will step into the new role at the Mountain View technology colossus on April 4, assuming control of the business that he began developing with Sergey Brin as Stanford computer science doctoral students in 1996.

He's taking the helm at a critical juncture for the company. It continues to deliver blockbuster financial results, as underlined by fourth quarter numbers also released on Thursday. Meanwhile, it's beefing up staff, gobbling up innovative rivals and staying ahead of the defining trends in technology, including the fast transition to mobile devices.

But Google also faces mounting pressure over accusations that it abuses its dominance, notably a broad antitrust inquiry launched by the European Commission late last year, as well as wide-ranging privacy complaints. How Page, and Google, respond to these challenges may well define the company's future.

Schmidt will take the role of executive chairman, focusing on external matters like deals, partnerships, customers and what will be the all-important government outreach. He will continue to act as an adviser to Page and Brin.

Brin himself will be dedicated to strategic projects, specifically new products, which he declined to specify during an investor conference call on Thursday.

"We've been talking about how best to simplify our management structure and speed up decision making for a long time," Schmidt said in a statement. "By clarifying our individual roles we'll create clearer responsibility and accountability at the top of the company. In my clear opinion, Larry is ready to lead and I'm excited about working with both him and Sergey for a long time to come."

Google reported revenues of $8.4 billion for the quarter, up 26 percent from a year earlier. Net income was $2.54 billion ($7.81 per share), up from $1.97 billion ($6.13 per share). On an adjusted basis, which excluded stock-based compensation expenses, earnings were $8.75 per share.

The revenue and adjusted earnings both beat Wall Street expectations, which stood at $6.06 billion and $8.09 per share for the quarter, according to Thomson Financial Network.

"Eric has clearly done an outstanding job leading Google for the last decade," Page said. "The results speak for themselves. There is no other CEO in the world that could have kept such headstrong founders so deeply involved and still run the business so brilliantly."

"Eric is a tremendous leader and I have learned innumerable lessons from him," Page continued. "His advice and efforts will be invaluable to me as I start in this new role. Google still has such incredible opportunity - we are only at the beginning and I can't wait to get started."

E-mail James Temple at jtemple@sfchronicle.com.