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Dual Class Stock Structure

How Page and Brin Plan To Keep Control

7:20 pm on Apr 30, 2004 (gmt 0)

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WebmasterWorld Senior Member digitalghost is a WebmasterWorld Top Contributor of All Time 10+ Year Member

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Sticking to its offbeat nature, Google plans to issue two separate classes of stock: Class A and Class B. The two would have identical rights, with one caveat: Class B holders -- whose ranks are to include Page, Brin and other trusted insiders -- are entitled to 10 votes per share. Class A holders receive one vote per share.

Full Story [cbs.marketwatch.com]

Since the first whisper of a Google IPO people have been speculating about a decline in quality due to shareholder demands. It doesn't appear that Page and Brin plan to relinquish control.

The dual-class structure could also lead to another consequence.

"There is a price for this kind of structure," said Greg Taxim, CEO of proxy research advisory firm Glass, Lewis & Co. in San Francisco. "If shareholders are smart, they will pay less for this stock."

6:04 pm on May 1, 2004 (gmt 0)

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WebmasterWorld Senior Member ciml is a WebmasterWorld Top Contributor of All Time 10+ Year Member

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With a many-billion dollar IPO, there's no point coasting or cashing in too quick.

In my opinion, one of the biggest risks Google face is losing their direction, their sparkle, their 'zing'.

I was slightly disappointed when I saw that they'd filed. As if the end of the Google era loomed. As if there would not be different from 'the others' once the inevitable post-IPO short-termism took hold.

When I read about the dual class structure, or rather the extent of it, I was quite reassured.

Some investors will be uneasy about so much control resting with the founders and other googlers, but I see it as giving Google a greater chance of keeping the 'Google difference' for the longer-term.


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