* Google stock split helps preserve Page, Brin’s grip on company
* Page asks for investors trust in long term vision
* Results solid but some worry about 2nd straight slide in search ad rates
By Alexei Oreskovic
SAN FRANCISCO, April 12 (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.
“When we went public, we created a dual-class voting structure,” Page said in a letter explaining the moves. “Our goal was to maintain the freedom to focus on the long term by ensuring that the management team, in particular Eric, Sergey and I, retained control over Google’s destiny,” the letter said.
“We are creating a corporate structure that is designed for stability over long time horizons. By investing in Google, you are placing an unusual long term bet on the team, especially Sergey and me, and on our innovative approach,” Page said.
Google remains one of the last few major technology corporations to resist calls to pay a cash dividend. Last month, Apple Inc gave in to investor pressure to pay a dividend as the company’s cash pile grew to almost $100 billion.
Google’s earnings of $10.08 per share, excluding certain items, surpassed the $9.65 that analysts had predicted - another source of relief after the previous quarter’s earnings miss.
Net revenue, excluding fees paid to partner websites, totaled $8.14 billion in the three months ended March 31, compared with $6.54 billion in the year-ago period and analysts’ average estimate of $8.15 billion according to Thomson Reuters I/B/E/S.
Net income was $2.89 billion, or $8.75 per share, compared with $1.80 billion, or $5.51 a share, in the year-ago period when Google took a $500 million charge to settle a government probe into its advertising practices.