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Google co-founder Page takes over, targets Facebook
January 21, 2011, Friday
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GOOGLE Inc co-founder Larry Page will take over as CEO from Eric Schmidt, a surprise move to make the company more nimble at a time when competition heats up with fast-growing rivals like Facebook.
Page's assumption of day-to-day operations marks a return to Google's technological roots, 13 years after he and fellow Stanford University student Sergey Brin founded what has become the world's No. 1 Internet search engine with US$29 billion a year in revenue.
"Day-to-day adult supervision no longer needed!" Schmidt tweeted after the announcement.
The news came as Google reported earnings and revenue that blew past expectations.
While Google has dominated Internet search for a decade, the company has struggled to find its footing in social networking, with a new crop of Web companies such as Facebook and Twitter stealing Web traffic and engineering talent.
"As spending was curbed and order restored over the last few years, some of that Google magic was lost," said Tricia Salinero, managing director of Newforth Partners, a mergers and acquisitions advisory firm, in an email.
Schmidt, who will step aside on April 4 and make way for Page, told Reuters in an interview that the change was "not a reaction to competitors."
Rather, he said, it was an effort to speed up decision making at the company, which ended the year with about 24,000 employees.
"Google has many different businesses and the issue that we have been getting into is there's too many ways (in) which these businesses can be slowed down," Schmidt said.
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.
Shares in the Internet search and advertising leader rose about 2 percent to US$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 US$8.75 a share outstripped Wall Street's average forecast of US$8.10.
Net revenue, excluding fees paid to partner websites, was US$6.37 billion. Analysts polled by Thomson Reuters I/B/E/S, on average, were expecting net revenue of US$6.06 billion.
Page's assumption of day-to-day operations marks a return to Google's technological roots, 13 years after he and fellow Stanford University student Sergey Brin founded what has become the world's No. 1 Internet search engine with US$29 billion a year in revenue.
"Day-to-day adult supervision no longer needed!" Schmidt tweeted after the announcement.
The news came as Google reported earnings and revenue that blew past expectations.
While Google has dominated Internet search for a decade, the company has struggled to find its footing in social networking, with a new crop of Web companies such as Facebook and Twitter stealing Web traffic and engineering talent.
"As spending was curbed and order restored over the last few years, some of that Google magic was lost," said Tricia Salinero, managing director of Newforth Partners, a mergers and acquisitions advisory firm, in an email.
Schmidt, who will step aside on April 4 and make way for Page, told Reuters in an interview that the change was "not a reaction to competitors."
Rather, he said, it was an effort to speed up decision making at the company, which ended the year with about 24,000 employees.
"Google has many different businesses and the issue that we have been getting into is there's too many ways (in) which these businesses can be slowed down," Schmidt said.
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.
Shares in the Internet search and advertising leader rose about 2 percent to US$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 US$8.75 a share outstripped Wall Street's average forecast of US$8.10.
Net revenue, excluding fees paid to partner websites, was US$6.37 billion. Analysts polled by Thomson Reuters I/B/E/S, on average, were expecting net revenue of US$6.06 billion.
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