Google Grows Revenues 24% From Last Year, Plans New Class Of Stock
Google’s revenues rose to $10.65 billion in the first quarter of 2012, resulting in net income of $2.89 billion, or $8.75 per share, the company announced after market close today. The revenue number represents a 24% increase over the year-ago period. Additionally, the board of directors proposed the creation of a new class of non-voting shares — to be distributed as a dividend to all current shareholders — effectively resulting in an two for one stock split.
“We had a very strong quarter,” said CEO Larry Page on a conference call with press and analysts, “Since becoming CEO again, I have pushed hard to focus on the big bets.”
Page described the creation of a new class of stock as enabling the founders to keep corporate decision-making amongst a small group, allowing the company to continue to take a longer-term view on the business. Though Page and Sergey Brin, in a 2012 founders’ letter, say they know some won’t be happy about the decision, “…after careful consideration with our board of directors, we have decided that maintaining this founder-led approach is in the best interests of Google, our shareholders and our users. Having the flexibility to use stock without diluting our structure will help ensure we are set up for success for decades to come.”
The decision begs speculation about what Google may be planning to do with its stock — acquisitions, perhaps? — that it wants to do without granting voting rights. But, in the letter, the founders address this, saying: “we don’t have an unusually big acquisition planned, in case you were wondering.”