INTERNET giant Google last night announced a two-for-one stock split to ensure co-founders Larry Page and Sergey Brin retain control over the company.
Investors will receive one share of new stock for each existing Google share that they own. The new stock will be listed on Nasdaq under a separate ticker and will have no voting rights, enabling Page and Brin to retain control.
The surprise decision came as the company announced profits of $2.89bn (£1.8bn), a 60 per cent rise year-on-year that exceeded expectations, but also revealed a worrying 12 per cent drop in search advertising rates – the company’s main source of income.
“When we went public, we created a dual-class voting structure. Our goal was to maintain the freedom to focus on the long term by ensuring the management team retained control over Google’s destiny,” Page explained. “By investing in Google, you are placing an unusual long term bet on the team, especially Sergey and me, and on our innovative approach,” he added.
Net revenue, excluding fees paid to partner websites, hit $8.14bn in the first three months of 2012, compared with $6.54bn in the same period last year. Britain accounted for $1.15bn – or 11 per cent – of the company’s income during the quarter.
The news came as Page marked a year since he returned as chief executive. Since then he has led the $12.5bn takeover of Motorola’s mobile phone business and launched the social network Google Plus.