Larry Page substitutes Google co-founder Eric Schmidt as CEO

SAN FRANCISCO – Eric Schmidt, a technology old hand brought in as Google Inc.’s “adult supervision” a decade ago, is resigning as the CEO to Larry Page, one of the geniuses who co-founded the company behind the Internet’s leading doorway.

The surprise shake-up declared Thursday came out to be driven by Schmidt’s wish to deal with other challenges as much as Page’s personal objectives.

“Day-to-day adult supervision no longer needed!” Schmidt wrote on his Twitter account moments after Google dropped the surprise that upstaged its fourth-quarter earnings. 55-years-old Schmidt will become executive chairman and stay behind to guide Page, 37, and Google’s other 37-year-old founder, Sergey Brin.

Underneath the new pecking arrangement effective by 4^th of April, Page will regain the CEO Job that he apprehended for three years before the two business enterprise capitalist firms backing Google in its early days insisted that a more mature leader be brought on board.

That escorted to the 2001 hiring of Schmidt, a professorial engineer who until that time was chief technology officer at Sun Microsystems Inc. and CEO of Novell Inc., both much bigger than Google at the time. After initially refusing to accept Google’s proposals, Schmidt ties with Page and Brin to form a brain conviction that progresses to construct the Internet’s most potent company.

At the momrnt , Google has a market value of more than $200 billion, an achievement which has made Page, Brin and Schmidt among the world’s richest people. These three men are Google’s largest individual shareholders, a fact which is anticipated to turn them all into multibillionaires.

But as Google has grown into a company with more than 24,000 employees, its decision-making boosting has swamp down into a bureaucracy. The managerial constipation and joint decision-making by the trio threatened to put Google at a competitive disadvantage as younger, livelier Internet services such as Facebook jump on new fashion to attract away users and advertisers. At Facebook, 26-year-old founder and CEO Mark Zuckerberg calls the shots in a capitalist culture that has lured dozens of engineers to depart from Google to work for Facebook.

Page announces in an interview on Thursday “My goal is to run Google at the pace and with the soul and passion of a startup, I think I will have time to do that given the way we have split up our responsibilities.”

Schmidt harmonized in the same interview, saying Google’s triumvirate decided they needed to find ways for the company to run more crisply.

“I am not as concerned about the titles as I am winning,” Schmidt said. “I am quite certain that this change will result in faster decision making and better value for the shareholders.”

Google’s stockholders have had little to criticize about, not that it would have made a major difference because Schmidt, Page and Brin combined own a controlling venture in the company. Google is coming off a year in which its earnings mounted 30% to $8.5 billion and, although its stock price remains below its all-time high reached in 2007, it has more than doubled from its lows during the recession.

Google shares rose $8.23, or 1.3 %, to $635 in comprehensive trading after Thursday’s announcement. In the regular session earlier, the stock fell $4.98, or 0.8 percent, to close at $626.77.The stock peaked at $747 before the recession.

An analyst Sandeep Aggarwal of Caris & Co. said “Eric Schmidt has played his innings very well”

The management reshuffling appears to be friendly. Both Page and Schmidt had high praise for each other during a Thursday conference call with analysts, with Schmidt describing Google’s co-founders as his “best friends.”

“I believe Larry is ready to be CEO” Schmidt said during the call. “It’s time for him to have a shot at running this.”

Page called over Schmidt as a “tremendous leader” whose contributions go beyond all expectations. He said “There is really no one else in the universe that could have accomplished what Eric has done,”

Although he tried to expose the idea in Thursday’s interview, Schmidt may have been growing tired out of all the mind and dull duties that come with running one of world’s most scrutinized companies.

The author of ‘Googled”,Ken Auletta said “I don’t think Eric was pushed. I think he jumped, The End of the World as We Know It.I think Eric is burned out.”

There have been signs Schmidt would prefer doing something else.

For the first time last year, he started to sit out of Google’s periodical calls to discuss its earnings. More recently, he has uttered annoyance about how some of his public remarks have been picked apart to hold up the idea that Google is an egotistical company that can’t be en routed to protect people’s privacy as its search engine and other services collect enormous amount of personal information.

In October, Schmidt depicted fire for responding to a hypothetical question pretense at a forum in Washington, D.C., about an implant that would let Google know what its users were thinking. He responded that Google’s policy is to “get right up to the creepy line and not cross it,” and an implant would cross the line.

He also said that as users willingly share information online, it doesn’t need users to type in search queries for the company to adapt the results. He added “We don’t need you to type at all. We know where you are. We know where you’ve been. We can more or less know what you’re thinking about,”

Such comments have been repeated in online musings that represented Schmidt and Google as “creepy.”

Danny Sullivan, the editor-in-chief of the SearchEngineLand news site said:

“The biggest thing I wonder is after a year or so of having various mistakes and announcements taken out of context if he decided he no longer wanted to play that front-man role,”

Schmidt pointed out that in his new role he will focus on meeting with Google’s business partners and government officials around the globe.

Disputing with regulators is becoming a more common occurrence as Google tries to expand its territory even as it faces complaints that it has been violating its dominance of Internet search to ruin competition. Schmidt, who has been called upon to give economic advice to President Barack Obama before and after he was elected, could be well suited to resolve the concerns in the U.S. He is also expected to play a key role in identifying Google’s takeover targets, which makes sense if he is also going to be addressing antitrust concerns.

The change in command seemed long past due to longtime Silicon Valley analyst Rob Enderle.

“Whenever you have a caretaker CEO, they’re supposed to stay in place until the founders have enough experience,” he said. “Larry had enough experience about four years ago.”

Although he is more outgoing than Page, Brin has never shown any interest in being CEO. Now, he intends to concentrate on a few high-priority products. Some are thought to be societal tools designed to counter Facebook’s fame, but Brin wouldn’t discuss specifics in a Thursday interviews.

“I have a passion for several projects,” he said. “I don’t think anyone has heard of any of them and I don’t think anyone will for a while.”

As CEO, Page will lead product development and technology policy and run routine operations.

Schmidt, Page and Brin all still plan to remain with Google through at least 2024, reaffirming a pledge they made to each other when the company went communal in 2004.

The changes at Google come on the same day that Hewlett-Packard Co. announced its own shake-up, replacing four board directors with five new ones as HP’s new management tries to moisten shareholder fury over the handling of CEO Mark Hurd’s ouster in August.

Facebook and other up-and-coming Internet companies still have a long way to go to catch Google, as demonstrated by the way Google cranked up its Internet marketing machine during the holiday shopping season.

Google earned $2.5 billion, or $7.81 per share, during the final three months of 2010. That’s a 29 percent increase from net income of $2 billion, or $6.13 per share, in the previous year.

Exclusive of stock-compensation expenses, Google says it earned $8.75 per share. That form topped the average analyst estimate of $8.06 per share, according to FactSet.

Profits climbed 26 percent from the prior year to $8.44 billion, from $6.67 billion.

After subtracting the commissions paid to Google’s advertising partners, the company’s income totaled $6.37 billion,about $300 million more than analysts predicted.

Google has abundance of bullets left to finance its ambitions for this year and beyond. It ended December with $35 billion in cash.

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