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Google Investors: Not Dividend We Wanted

In response to demands that the company pay a dividend, Google announced they would ... sort of.

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Google

In a long "2012 Founders' Letter", Larry Page and Sergey Brin blunted stated that the dual-class voting structure they have had from the beginning was designed to "make it harder for outside parties to take over or influence Google."

But they have been concerned about dilution from equity-based employee compensation and other forms of dilution, so they are announcing plans to create a new class of non-voting capital stock, which will be listed on NASDAQ.

They explain how it will work:

"These shares will be distributed via a stock dividend to all existing stockholders: the owner of each existing share will receive one new share of the non-voting stock, giving investors twice the number of shares they had before.

It’s effectively a two-for-one stock split-something many of our investors have long asked us for. These non-voting shares will be available for corporate uses, like equity-based employee compensation, that might otherwise dilute our governance structure."

So, this is NOT the dividend many were clamoring for. It does not return any money to shareholders. But it does keep to their initial philosophy: keep control of the company and manage it for the long term.

Googlereported first-quarter earnings that beat Wall Street's expectationson Thursday, while revenue was in-line with expectations.

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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