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Shady, if not exactly "evil"
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Scotty Brown's profile photoEdwin McBride's profile photoGreg Raiz's profile photoJojie Millena's profile photo
31 comments
 
So, do you just sit around all day thinking of ways to vilify Google?
 
Thanks for explaining a bit of this. I've been trying to follow the issues, but I find that this is one of the few times where I prefer more substance and less opinion. Unfortunately, that's exactly what I was not seeing.

I still only barely understand this, but it seems like that is the point.
 
it was the split behind the non-split - they split is right there. at that price - why the hell not - AAPL is next in 12 months just for S's and G's
 
+MG Siegler, I'm kind of lost as to what the complaint is. As I understand your logic, Facebook's IPO is structured to give Zuckerberg control, but that's not shady. Google's IPO was structured to give the founders control, but that's not shady. Google's founders won't lose control any time soon, but a stock maneuver that pushes such a possibility farther out into the future is shady. Why? What's the distinction?

Fortunately, anyone that doesn't like it has the convenient option of just selling their shares. Which is a pretty important option anywhere you go. In case you hadn't noticed, regardless of how ownership is distributed, today's boards of directors are pretty useless at looking out for shareholder interests.
 
A stock split would just double the number of shares while cutting the price in half. The percentage ownership wouldn't change.

 
I had a different takeaway from all this than many have, and Felix Salmon even mentioned it: "This move, then, is basically a way for Google to try to retreat back into its pre-IPO shell as much as possible. It never really wanted to go public in the first place..." Maybe I'm naive, maybe I'm just a fanboy, idk. But it seems like they're starting to feel a lot of outside pressure to be more profitable or to operate under Wall Street's terms, and I suspect they (Sergey and Larry) just want to make sure they can fulfill the vision of Google that they have.
 
I think the issue is that we, as investors, understand the "deal" with FB. Here Google's founders are retroactively changing the "deal".
 
retreat now as the market is in flux - and in 2 years, double the investment and more importantly for GOOG the capital...they are not a "not-for profit: for the love of - god/allah/muhamar/yahew/elohim/ehyeh (pardon me if I missed your particular deity)
 
+Michael McNabb, yes, seen that way, this might be described as shady. My point, and as MG describes in the article, is that the same "deal" was made at Google's IPO. You can go read the founders' letter from the IPO where they describe their desire to maintain control and make long-term decisions without pressure for short-term profits. This not-a-split just maintains that setup.
 
Google wants further trading done on their own terms, IE: class C shares with the exception that class B are sold with them. This is to ensure that Larry, Sergei, Eric and the gang retain the control they want, all while the average shareholder loses nothing. You should also note that they are moving to make class C shares unmovable without the class B's. So if you are a Google Employee and want out - tough without selling it all.
 
the average shareholder looses the right to participate in governance via long established principals governing corporations.
 
+Michael McNabb Google breaks the mold, why should they follow the status quo? The company has been built by following Larry and Sergey's lead. I would rather follow their lead, they live it, they made it. Why would I trust you or a financial advisor to make a decision for Google over those guys?
 
I think +MG Siegler doesn't like the all idea of a "don't be evil" company. Business is business and the best a company can do is to make his customers happy (apple style). I think that Google is no different, but I like much more a company that in order to satisfy his customers develops free tools and predicates the open software (sure not always THAT open, but do you really want to compare to Microsoft/Apple?!) instead of selling shining phones. Come on, that is just silly...
 
I think this is being way overblown. A key thing to note is that with this stock split, the "Troicha's" voting control doesn't actually increase, it remains status quo. There seems to be this sentiment that Larry, Serge and Eric are 'further entrenching' themselves, as if they were increasing their voting control over the company, but they're not. Everyone who owns a share of Google stock today and has one vote today, will just own two economic shares tomorrow but continue to have 1 vote. The same applies to Larry, Serge and Eric; their one vote today stays one vote tomorrow, no increase in control.

One more thing to point out is that if the new share class is indeed to be used for equity compensation and as an acquisition currency, then this is actually to the benefit of today's shareholders, as it protects ALL current shareholders against have their voting control diluted by mergers or equity comp. From the perspective of a current shareholder, there is no immediate economic or voting impact to the split, unless you believe that the split will attract new retail investors by improving the technical profile of the company, in which case the shares might even be expected to trade up, unlocking value. I think people are ignoring the fact that this split benefits all current shareholders equally. It does not disproportionately favor the Page, Brin, Schmidt trifecta, as this is a measure designed to equally protect all current voting shareholders against future control dilution.

The only people who should be concerned about this are the ones who might receive ONLY class C stock in the future, namely, employees who will be issued shares of Class C stock and future acquisition targets. But if voting interest is really something those parties desire, there's nothing to stop them from selling their Class C shares and purchasing Class B shares in the open market.

That's just my two cents, I just think peeps gotta calm down!
 
A two-tier structure allows them to dilute equity, without diluting current voting rights- of which the troika simply still has the most. So, this move would 'freeze' that for everyone- not just the troika. It comes to down trusting management: if you believe Google is better off being controlled by its founders, this is a good thing. If not, try to buy only preferred shares or sell. Debating whether or not they are evil is silly. The founders want to retain long term control...they just take more shit because they generally aspire to higher ideals than their competition 9 times out of 10.
 
MG you cant stop the Google train no matter how hard your BLOG!
 
MG, how about this. Can you blog about how in Germany Apple is banned from push email. Or how about the DOJ suing Apple for price fixing. Or how about....
 
Let's invite him over for dinner!!
 
From the source material: "This move, then, is basically a way for Google to try to retreat back into its pre-IPO shell as much as possible." I don't understand how thats a bad/evil idea when thinking about the end user and development.
 
Just an Apple fanboy trying to draw attention away from the fact that Apple is getting sued by the goddamn DEPARTMENT OF JUSTICE.

Pundits have been crying for like, years now of how "evil" Google is? Google is not being sued by the goddamn DEPARTMENT OF JUSTICE. I am actually amazed how blindly loyal Apple fanboys are. We must all be thankful that Steve Jobs didn't recruit an army! We might have had WW3!
 
No worries. Hire more lobbyists and make some strategic campaign donations and these charges will go away. It's how we do business,
 
The business insider piece is good. I will say that since companies have been allowed to do this sort of thing, the ones that stand out for it aren't known for thier innovation, let alone openness. I'm thinking of companies like Viacom or Liberty Media Group (as well as Comcast). These are enities known for savvy deal making by the people (familes) who control them, not creative or beloved products and services. It also strikes me that it stands in pretty big juxtaposition to the symbolic way in which Google went public too. I stand by my previous assertion that it's in the company's best interest to have the founders retain control of it, but perhaps this is an "unGoogley" way to achieve that- if there is a way at all.
 
I say, make MG the ONLY P.R. director at Google... And tie his.compensation to GOOG stock performance.. for the next 10 years... and then live-stream the whole thing on Google+!!!
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