CEO shake-up at Google: Page replaces Schmidt

Google is making major changes to its executive lineup, with CEO Eric Schmidt moving into a board role and co-founder Larry Page assuming the CEO spot.

Tom Krazit Former Staff writer, CNET News
Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.
Tom Krazit
6 min read
From left, Eric Schmidt, Larry Page, and Sergey Brin Google

Google shook up its ruling triumvirate today, announcing that CEO Eric Schmidt would be taking the role of executive chairman, while co-founder Larry Page will become CEO. Sergey Brin, who has also shared power with the two others, will work on "strategic projects," Google said.

Schmidt, who was hired by the co-founders to be Google's CEO in 2001, will focus on external partnerships and business deals starting on April 4, when Page will take over the day-to-day management role. Schmidt said in a blog post that Page, "in my clear opinion, is ready to lead."

On a conference call originally scheduled to discuss Google's fourth-quarter results, Schmidt said "I'm going to get a chance to work on the things I'm most interested in," which will include talking to customers, partners, and the government regulators breathing down his company's neck.

Page, 38, will actually become Google's third CEO, though he held the role during the first few years of the company's efforts. He'll be tasked with making sure Google toes the line internally and said several times during the call that he's excited to lead Google at a time when computing is still a relatively new way of life for many people.

Brin will continue to focus on technology products, assuming the title of co-founder, as opposed to his current role of president of technology. "He's an innovator and entrepreneur to the core, and this role suits him perfectly," Schmidt wrote in his post.

Brin is currently working on several new products that he didn't want to discuss, citing criticism that Google has been prone to launching "vaporware" in the past: Google Wave comes most prominently to mind. Schmidt deferred a question about Google's social strategy to Brin, suggesting that social technologies make up one big area of his focus.

The shake-up comes at a time when Google's search dominance is unquestioned, and its efforts to expand its business into display advertising and mobile technologies have given it a few more sources of funding for its dreams. However, the company has struggled to confront a new way of obtaining information on the Web--that curated by your friends in social networks--and also must deal with the wandering eyes of several Googlers wondering where the next big stock market payout can be found in Silicon Valley.

Departing employees have also complained that as Google has grown--now with 24,400 employees--it has gotten harder and harder for good ideas to make it up the corporate ladder. Schmidt alluded to that in his statement, suggesting that Google is hoping to become a bit more nimble.

"As Google has grown, managing the business has become more complicated. So Larry, Sergey, and I have been talking for a long time about how best to simplify our management structure and speed up decision making--and over the holidays, we decided now was the right moment to make some changes to the way we are structured," Schmidt wrote in his post.

In announcing fourth-quarter earnings results alongside the management news, Google said revenue minus traffic acquisition costs amounted to $6.37 billion, ahead of analyst estimates. Net income for the quarter was $2.54 billion, or $2.85 billion, excluding onetime charges. Analysts were expecting earnings per share, excluding charges of $8.09, and they got $8.75 from Google.

Investors seemed pleased with the numbers, and they didn't seem freaked out enough by the management shake-up to react in after-hours trading. Google's stock rose $14.63, or 2.33 percent, in trading, after the bell after closing down for the day.

Google management over the years
JANUARY 1996 Two Stanford University Ph.D. students, Larry Page and Sergey Brin, begin to collaborate on a search engine using a newly devised algorithm called PageRank. They originally call the search engine BackRub, but the following year change its name to Google.
JANUARY 1998 Sun Microsystems co-founder Andy Bechtolsheim becomes Google's first investor, offering $100,000 to Page and Brin even though Google has not even been registered as a company and the domain name google.com was registered just months earlier.
SEPTEMBER 1998 Google files for incorporation in California. Larry Page serves as CEO; Sergey Brin as president and chairman of the board.
SEPTEMBER 1998 Housed in Page and Brin's friend Susan Wojcicki's garage in Menlo Park, Calif., Google hires another Stanford Ph.D student, Craig Silverstein, as its first employee. To this day Silverstein retains the title "Director of Technology" at Google, though he has relocated to its New York office.
JUNE 1999 Google announces a $25 million funding round from Sequoia Capital and Kleiner Perkins Caulfield and Byers, whose respective partners Michael Moritz and John Doerr join Google's board of directors.
NOVEMBER 1999 Google hires Charlie Ayers, a former caterer to the Grateful Dead, as its first chef, after he wins the job in a cook-off judged by Google's 40 employees.
JUNE 2000 Portal pioneer Yahoo selects Google as the provider for its search engine technology, ditching Inktomi in the process.
MARCH 2001 Google names Eric Schmidt, on the cusp of leaving his post as chairman and CEO of Novell, to be the chairman of its board of directors. He replaces Brin, who remains president of the company. It's a crucial time in Google's short history as the tech bubble has just burst.
AUGUST 2001 Schmidt is named CEO of Google, leaving his post at Novell, where he had been chairman and CEO since 1997. Page steps down as CEO and takes on the title "president of product"; Brin becomes "president of technology."
JUNE 2004 Eric Schmidt is named to a four-year term on the board of trustees at his alma mater, Princeton University. A year later, Princeton president Shirley M. Tilghman is named to Google's board of directors.
AUGUST 2004 Google goes public with an opening price of $85 per share in a rare auction-style IPO.
SEPTEMBER 2005 Google hires Vinton Cerf, widely considered a "father of the Internet," as vice president and chief Internet evangelist.
FEBRUARY 2006 Google hires Dr. Larry Brilliant as the executive director of Google.org, its philanthropic arm.
AUGUST 2006 In what will prove to be a fateful move, Eric Schmidt joins Apple's board of directors.
OCTOBER 2006 Google makes its first billion-dollar acquisition when it purchases YouTube for $1.6 billion, a price tag that Eric Schmidt later admits was overvalued.
APRIL 2007 Google plans to make its biggest acquisition yet, the $3.1 billion purchase of ad firm DoubleClick. The FTC puts up some red tape.
OCTOBER 2007 Google share prices soar past $700 for the first time on Oct. 31.
MARCH 2008 Google's acquisition of DoubleClick is complete.
OCTOBER 2008 Google backs out of a proposed agreement to supply Yahoo with search advertisements due to regulator scrutiny.
NOVEMBER 2008 Amid rumors that Eric Schmidt, a prominent supporter of Barack Obama, may be at the top of the president-elect's list of potential chief technology officers, the Google CEO says that he prefers to stay where he is.
APRIL 2009 Schmidt takes a spot on the President's Council of Advisors on Science and Technology (PCAST).
AUGUST 2009 Few are surprised when Schmidt announces his resignation from Apple's board of directors. Conflicts of interest between the two companies have been escalating for months.
DECEMBER 2010 Google is reported to be mulling an acquisition even bigger than YouTube and DoubleClick, offering as much as $6 billion for online deals-broker Groupon. Groupon turns it down and reportedly plans an IPO of its own instead.
JANUARY 2011 Eric Schmidt announces in Google's 2010 fourth-quarter earnings call that he is handing over the CEO title at Google to co-founder Page. He will remain chairman of the board.
Source: CNET research

See also:
Paging Larry: Google's new CEO has lots to do
Schmidt: 'Adult supervision' at Google no longer needed
Eric Schmidt's letter on stepping down as CEO