Google Inc. (Nasdaq: GOOG) co-founder Larry Page is taking over as CEO in an unexpected shake-up that upstaged the Internet search leader’s fourth-quarter earnings.

Page, 37, is reclaiming the top job from Eric Schmidt, who had been brought in as CEO a decade ago because Google’s investors believed the company needed a more mature leader.

“We’ve been talking about how best to simplify our management structure and speed up decision making for a long time,” Schmidt said ina 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.”

Schmidt, 55, will remain an adviser to Page and Google’s other co-founder, Sergey Brin, as Google’s executive chairman.

The changes will be effective April 4.

Google has North Carolina connections. It operates a data center in western North Carolina and a software development operation in Chapel Hill.

Page praised Schmidt, too.

“Eric has clearly done an outstanding job leading Google for the last decade. The results speak for themselves,” he said.

“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 nly at the beginning and I can’t wait to get started.” “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.

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 prior year.

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

Revenue 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 revenue totaled $6.37 billion – about $300 million more than analysts anticipated.

Schmidt in blog: ‘I never imagined … that we would get as far, as fast …”

In a blog post, Schmidt spelled out the thinking behind the changes:

“When I joined Google in 2001 I never imagined—even in my wildest dreams—that we would get as far, as fast as we have today. Search has quite literally changed people’s lives—increasing the collective sum of the world’s knowledge and revolutionizing advertising in the process. And our emerging businesses—display, Android, YouTube and Chrome—are on fire. Of course, like any successful organization we’ve had our fair share of good luck, but the entire team—now over 24,000 Googlers globally—deserves most of the credit.

“And as our results today show, the outlook is bright. But 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.

“For the last 10 years, we have all been equally involved in making decisions. This triumvirate approach has real benefits in terms of shared wisdom, and we will continue to discuss the big decisions among the three of us. But we have also agreed to clarify our individual roles so there’s clear responsibility and accountability at the top of the company.

“Larry will now lead product development and technology strategy, his greatest strengths, and starting from April 4 he will take charge of our day-to-day operations as Google’s Chief Executive Officer. In this new role I know he will merge Google’s technology and business vision brilliantly. I am enormously proud of my last decade as CEO, and I am certain that the next 10 years under Larry will be even better! Larry, in my clear opinion, is ready to lead.

“Sergey has decided to devote his time and energy to strategic projects, in particular working on new products. His title will be Co-Founder. He’s an innovator and entrepreneur to the core, and this role suits him perfectly.

“As Executive Chairman, I will focus wherever I can add the greatest value: externally, on the deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership that are increasingly important given Google’s global reach; and internally as an advisor to Larry and Sergey.

“We are confident that this focus will serve Google and our users well in the future. Larry, Sergey and I have worked exceptionally closely together for over a decade—and we anticipate working together for a long time to come. As friends, co-workers and computer scientists we have a lot in common, most important of all a profound belief in the potential for technology to make the world a better place. We love Google—our people, our products and most of all the opportunity we have to improve the lives of millions of people around the world.”

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.

Shares rose $9.18, or 1.5 percent, to $635.95 in extended trading after the announcement.

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