By Alexei Oreskovic
SAN FRANCISCO, April 12 Google Inc
announced a stock split designed to preserve the control of
co-founders Larry Page and Sergey Brin over the No. 1 Web search
engine, as it posted revenue in line with estimates.
Investors welcomed the first quarter revenue of $8.14
billion after the company's rare miss in the previous quarter.
Shares of Google, which finished Thursday's regular session
at $651.01, rose 0.6 percent to $655 in after-hours trading.
Google said its board of directors has approved a dividend
of stock to existing shareholders that it calls a 2-for-1 stock
split, preserving its corporate structure.
"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.
The announcement comes just as Page completes a year of his
return as chief executive.
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
Google reported earnings of $10.08 per share, excluding
certain items, surpassing the $9.65 that analysts had predicted
- another source of relief after the previous quarter's earnings
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.
Since taking the reins one year ago, Page has cut back on
extraneous projects, launched a social networking service to
challenge Facebook, and signed a $12.5 billion deal to acquire
smartphone maker Motorola Mobility Inc.
"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 that the management team, in particular
Eric, Sergey and I, retained control over Google's destiny,"
Page said in a letter explaining the moves.
"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 he had secured the unanimous approval of Google's
board for the share-based moves, but stressed "there's no
particular urgency to make these changes now."
The new class of non-voting stock to be distributed to
shareholders will eventually be listed on the Nasdaq, Page added
in his letter without elaborating.