Google is to undergo a surprise management reshuffle which sees co-founder Larry Page replace Eric Schmidt as chief executive.

Page, who co-created Google in 1996 with fellow student Sergey Brin, will now lead product development and technology strategy in a bid to recoup ground recently lost to Facebook.

The announcement came as Google unveiled strong net profits in the last three months of $2.54bn on revenues of $8.44bn. Full-year pre-tax profits rose to $10.8bn from $8.4bn.

Schmidt was drafted in as chief executive in 2001 to provide “adult supervision” for the fledgling search engine.

The 55-year-old will become executive chairman of the internet powerhouse, and will focus on “deals, partnerships, customers and broader business relationships”.

Page returns to the job, which he relinquished to Schmidt in 2001 when investors called for a more experienced business leader.

Schmidt said on his personal Twitter account: “Day-to-day adult supervision no longer needed!”

“In my clear opinion, Larry is ready to lead and I’m excited about working with both him and Sergey [Brin] for a long time to come,” he added.

In a call to analysts, he explained that the previous structure, in which the triumvirate took collective decisions, had slowed down decision making. He said the changes would help clarify the individual roles so “there’s clear responsibility and accountability at the top of the company”.

The company has lost momentum recently with key staff leaving, and loss of ground to the likes of Facebook and Twitter. It will be Larry Page’s job to re-energise the technology.

However keeping Eric Schmidt on board as a mentor to the founder will satisfy Wall Street that the company remains in safe financial hands.

Page, who takes up his new role in April, said Google is just at the “tip of the iceberg” of how the internet will change consumers lives in the future. “If you think about the next five years of what your online life will be like, we are only just [getting] started and I am very excited,” he said.

(Left: Mobile web, including guides such as city.mobi, offer unlimited potential)

Google in particular wants to consolidate it grip on the mobile market. The exponential growth of mobile sites, including the likes of City.Mobi, provide unlimited potential.