caito

Google’s triumvirate — co-founders Larry Page and Sergey Brin and Chief Executive Eric Schmidt — hold overwhelming voting power through a two-tier voting structure. Page and Brin hold around 28.8 percent and 28.7 percent, respectively, of Class B voting shares, giving them majority control of Google (via Latest Business News and Financial Information | Reuters.com).

The reason being that they hold Class-B shares of which each carries ten (10) votes (reserved for Google “insiders” only) compared to the Class A shares carrying one vote each.

I don’t really agree with Google Larry Page that the company’s “long-term focus” on “serving end users” required a dual-class voting structure to ward off hostile takeovers. The long-term focus of the company is not only serving end users but also serving the shareholders. If, at any point, the shareholders deem it more valuable to sell their shares to the competition, then be it so, since they are the owners.

I really get mad if managers refuse to grant shareholders all the right of an owner. It’s the managers duty to serve shareholders’ interest and not theirs. Of course, managers have a lot more insider knowledge and they need vision, strategy, and such but all of this must be within the framework of serving the owners - the shareholders.

Noting that Google’s business bridges the media and technology industries, Page said the two-tier structure was in line with media companies such as New York Times Co.

No, Larry, you are not a journalistic company needing journalistic independence, even though I don’t believe in it at all (Read it from my lips: There is no such thing as journalistic independence). You are a technology company, some great technologists on the search for the Holy Grail of search: Making every information on this planet available to everybody. But, if that is your goal, please become a philanthropist or don’t go public, stay a private company. Going public also means transferring ownership to the public, not only getting their money and telling them to shut up afterwards.

So, question remains: What does this have to do with my “virtual media company”? It affects one of the biggest competitors in the media sector, Google, and it involves shareholder activism, which I will definitely watch closely to see if it will have any effect on Google’s business. Of course, I must wish that it effects Google’s business since that would mean there’s always a “regulatory framework” in business: Even for Google…