The changes at Google have been compared to those at another Internet giant, Yahoo!. But beyond the fact that a founder took over as CEO, the companies are in very different positions.
When Jerry Yang was appointed Yahoo! CEO in 2007, the company was struggling to redefine itself as a web services provider and media company, and losing in its competition with Google for search engine revenue. Google was still in a period of rapid growth.
Google isn't in a situation like that now - the company reported yet another strong quarter and year-over-year results. Also, unlike the leadership at Yahoo!, Google's founders have always been part of the executive decision-making team. The triumvirate of Sergey Brin, Larry Page and Eric Schmidt has shared responsibility since Schmidt arrived as CEO in 2001. In that sense there is no real break in the leadership, and the shuffling of positions is just that.
Yang was one of the founders of Yahoo! in 1995. Yahoo! was a darling of investors for several years, but was one of the biggest losers when the dot-com bubble burst in 2000, when its stock dropped from over $100 to under $20 in the space of a few months.
Yang and his co-founder, David Filo, brought in Terry Semel as CEO in 2001. At the time Semel took over the company was struggling to deal with the aftermath of the dot-com bust. Semel was reasonably successful, but eventually he left in 2007, another period of turmoil for Yahoo!.
Investors were not kind to Yahoo! during his tenure as CEO, with the stock falling from the $27 range to under $16. Yang was criticized for mishandling a bid from Microsoft, for $44.6 billion. Yahoo! rejected the bid, and the company's fortunes went south with falling revenue and layoffs.
Google, by contrast, has been on a nearly constant upward climb for several years, barring the effects of the financial crisis in late 2008. The company has yet to lay off any employees, and has expanded its product offering fairly consistently. With the introduction of the Nexus phone line it has even moved into consumer electronics.
Investors seem to be rewarding Google for the executive changes so far, as the stock opened the day at $639, well above the close of $626.77 just before the earnings call and announcement.