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Google Empowers the End-Investor

Article in Today's FT

1:05 pm on Jun 28, 2004 (gmt 0)

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the fund managers have a personal interest -- and the means -- to cause long-term market volatility. And they also know that if their poor decisions are exposed, a cunning law of relativity will forgive them if enough others do likewise ...

The losers are the end-investors, mainly individual investors with pensions, insurance policies and collective investments ...

Google's response is a dual share structure, allowing shareholder-managers to retain their grip on decision-making ...

Critics object that this is undemocratic and that the company's management themselves are conflicted agents.

However, it is an illusory democracy when most end-investors are at the mercy of fund managers with a personal interest in short-term gains and a relative indifference to the fall out.

And if it is a choice between two sets of conflicted agents, who would you rather have manage your Google shares: volatility-junkies in the fund management industry or Google's managers, your fellow shareholders?

1:09 pm on June 29, 2004 (gmt 0)

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It seems to me that Google is doing the best thing for Google (and that is not bad thing). By handling it like a Dutch auction they ensure themselves to get the best prices for themselves. This will probably also lower the volatility that is normally associated with an IPO. So there should be some side benefit to the end user. I don't blame Google for doing it this way. Also by going off the beaten path they are creating even more press which will help them.
10:58 am on June 30, 2004 (gmt 0)

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Goodroi -- yeah, I agree with all of your points.

Like it says in their prospectus, "Google is not a conventional company". I think that's as much a marketing strategy as it is a genuine attempt to break the mould.