Google Reports Big Profit Jump; Larry Page New CEO
Googlereported a profit that easily beat Wall Street expectations and stunned investors by announcing that Eric Schmidt will resign as CEO.
The online search and advertising giant said co-founder Larry Page, 37, will take charge of day-to-day operations as chief executive officer starting April 4.
Current CEO Eric Schmidt, 55, will assume the role of executive chairman, focusing on deals and government outreach, among other things.
Google said other co-founder Sergey Brin will focus on strategic products.
"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," Schmidt said.
Page praised Schmidt, too. "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," Page said. "Eric is a tremendous leader and I have learned innumerable lessons from him."
Watchers of the technology giant seemed to react mostly positively to news of the leadership shakeup.
"I think it's a good move. It (the triumvirate management structure) was always one of things that concerned us a little bit," said Jacob Internet Fund portfolio manager Ryan Jacob.
"It should streamline the decision-making process. They're in a fast-moving industry," Jacob added.
"Initially Larry and Sergey were pretty young when Google started, so maybe they weren't prepared at that point to run the day-to-day operations of Google," said Thinkequity analyst Aaron Kessler. "But at this point they've been involved for several years now, and are in a better position to really run the company as opposed to just being in the founder role."
"Day-to-day adult supervision no longer needed!" Schmidt tweeted after the announcement.
The abrupt shift comes days after Apple 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 change in command overshadowed Google's fourth-quarter earnings, which soared past analysts' estimates as the company cranked up its Internet marketing machine during the holiday shopping season.
Google turned in a profit of $8.75 a share excluding one-time items, up from $6.79 a share in the same period a year earlier.
Sales rose to $6.4 billion in the last 3 months of 2010 excluding traffic-acquisition costs (TAC), against $4.954 billion last year.
TAC includes money that Web sites pay to advertisers and that they spend to draw traffic. Analysts factor TAC into their earnings estimates.
Analysts who follow Google saw the company earning $8.09 a share on revenue of $6.055 billion.
"It's the holiday quarter, the biggest quarter of the year, and they delivered. We got a little upside on revenue, and on earnings," said BGC Partners analyst Colin Gillis.
The company's stock moved more than 2 percent higher in extended trading Thursday. Get after-hour quotes for Google here.
Shares of Google finished the day's Nasdaq session slightly lower.
Google said Schmidt plans to sell about 534,000 shares of Class A common stock. Based on Google's closing share price of $626.77 on Thursday, he would earn about $334.7 million on the stock sale. He would still own about 2.7 percent of Google's outstanding capital stock, down from 2.9 percent before selling the shares.
- AP and Reuters contributed to this report.