Google stock split helps Page, Brin maintain grip
By Alexei Oreskovic
SAN FRANCISCO (Reuters) - Google Inc announced a stock split designed to preserve the control of co-founders Larry Page and Sergey Brin over the world's No. 1 Web search engine, asking investors to trust their long-term vision.
The surprise decision, which its board unanimously approved, came as the company exceeded Wall Street's profit expectations but revealed a worrying 12 percent drop in search advertising rates - the second consecutive quarterly decline.
Shares of Google, which finished Thursday's regular session at $651.01, rose to $653 in after-hours trading.
The announcement came just as Page completed a year in the chief executive's seat for the second time, during which he spearheaded the $12.5 billion acquisition of Motorola Mobility and launched a social network to take on Facebook.
"This stock split dividend, a dividend of a non-voting shares, is really just so the company can maintain control," BGC analyst Colin Gillis said.
"Plus, you have another quarter with a disturbing drop in click prices. OK, paid clicks are up but people are paying less for them. We had smartphones before the December quarter. If we want to blame it all on smartphones, that's a little disconcerting.
Google said its board of directors has approved a 2-for-1 stock split. Investors will get a dividend of one share of the new, non-voting "Class C" stock for each existing Google share.
The new shares, to be listed on Nasdaq under a separate ticker, will be available for corporate uses such as equity-based compensation for employees, in which case they would not dilute the share base. Continued...