Google co-founder Larry Page to take over as CEO
Eric Schmidt to become executive chairman; company releases Q4 earnings
Online search giant Google (NASDAQ: GOOG) on Thursday announced that co-founder Larry Page will take over as chief executive from Eric Schmidt, who will become executive chairman. The changes will begin on April 4.
Google also announced fourth-quarter results that beat street estimates. Net income for Q4 was $2.54 billion, or $8.75 a share, compared to net income of $1.97 billion, or $6.79 a share, in the year-ago quarter.
Google's gross revenue for the fourth quarter was $8.44 billion, up 26 percent from last year's Q4 gross revenue of $6.67 billion.
(Also see: Digging into Google's Q3 metrics)
Consensus estimates called for Google to report net income of $8.06 a share on revenue -- which excludes fees paid to Google's online partners -- of $6.06 billion.
The results reflect Google's continued strength in search advertising, as well as emerging revenue streams from display advertising and mobile advertising. Google owns about 65 percent of the online search market in the United States, according to comScore.
The strong quarter was expected. The change in management was a shocker.
Google said that, as executive chairman, Schmidt would focus on "deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership." Schmidt also will act as an advisor to Page and co-founder Sergey Brin, who will focus on developing new products.
"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."
Page said in a statement accompanying the earnings report, "Eric has clearly done an outstanding job leading Google for the last decade. 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. 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."
Regarding the Q4 results, Schmidt said, "Our strong performance has been driven by a rapidly growing digital economy, continuous product innovation that benefits both users and advertisers, and by the extraordinary momentum of our newer businesses, such as display and mobile. These results give us the optimism and confidence to invest heavily in future growth -- investments that will benefit our users, Google and the wider web."
In early after-hours trading, shares of Google were at 632.95, up 1 percent from Thursday's closing price of 626.77.
Through Thursday's close, Google's stock is up 44.5 percent over its 52-week low of 433.63 set on July 6, 2010. Shares on Wednesday reached 642.96, their highest point since January 2008.
Obviously I'll be following these changes tomorrow. What a surprise.
Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.