GOOGLE co-founder Larry Page will take over as chief executive from Eric Schmidt, at a time when competition is heating up with fast-growing rivals like Facebook.
Mr 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 number one Internet search engine.
The news came as Google reported earnings and revenue that beat 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-based 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.
Mr Schmidt, who will step aside on April 4 and make way for Mr Page, said 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," Mr Schmidt said.
Mr 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. Mr Brin will concentrate on strategic projects.