A CEO switch with president and COO Shantanu Narayen succeeding Bruce Chizen Dec. 1. Narayen retains the title of president and will join the board of directors. Chizen, CEO for seven of the 14 years he was at Adobe, (NSDQ: ADBE) remains on the board until his current term ends next spring and will be a strategic adviser through 2008. Narayen, who joined Adobe in 1998, played a key role in the 2005 acquisition of Macromedia. Release.

Update: Chizen, 52, told the AP he wanted “to take a break. ... The role of CEO is all-consuming.” He added: “I’m not leaving under any cloud. There’s no severance agreement. I’m taking a break, and the reason I feel comfortable taking a break is because the company is in such good shape.”

Adobe turned in a notable Q3 with record profits and revenues; today, the company said it still expects to come in at the high end of its double-digit guidance. Even so, Wall Street reacted negatively to today’s news, sending the stock down more than 2 percent before the market closed and another 3 percent in early after-hours trading to $40.87 per share as this is being typed. Adobe hit a 52-week high of $48.47 Oct. 25.

MKTW: One of Narayen’s top challenges: competition for Flash, including Microsoft’s (NSDQ: MSFT) new Silverlight.  “Adobe has since combined Flash technology with its Reader technology to create a product called “AIR,” which is expected to be released next year and draw the company into closer competition with Microsoft. ‘The biggest opportunity going forward is establishing AIR as the platform for rich Internet applications,’ Narayen said.”