Google Founders Do It Their Way

NEW YORK Despite Google's transition to public ownership, founders Sergey Brin and Larry Page want the company to operate in much the same manner as it has during its nearly six-year existence."Google is not a conventional company. We do not intend to become one," Page starts a letter to prospective shareholders, a preamble to Google's S-1 document. Ending months of anticipation, the Mountain View, Calif.-based search company yesterday filed a registration with the Securities and Exchange Commission for an IPO that could fetch the search company as much as $2.7 billion [IQ Daily Briefing, April 29]."As a private company, we have concentrated on the long term, and this has served us well. As a public company, we will do the same," Page writes in the letter.In the filing, the founders make clear that they want to protect Google from "outside pressures," that "too often tempt companies to sacrifice long-term opportunities to meet quarterly market expectations. Sometimes this pressure has caused companies to manipulate financial results in order to 'make their quarter.'" Hence, Google is declining to give quarterly guidance. Further insulating the founders from external influences, the filing proposes a dual-class voting structure, which will leave Brin and Page significant control over the company's decisions and fate. While new investors will share in Google's long-term growth, they will have less influence on its strategic decisions."These guys don't want to be a normal company and they're going to do whatever they can to do it their own way," said Nate Elliott, an analyst with New York-based Jupiter Media. "On the one hand, it is brave, and on the other hand, 30-some-year-old presidents who want to do it their own way sounds very bubble to me."Brin, 30, and Page, 31, founded the company in September 1998 when they were in the computer science Ph.D. program at Stanford University. In 2003, each received $150,000 in salary with bonuses of $206,550, according to the filing. The IPO will make them billionaires. Last year, the company had net income of $106 million on net revenue of $962 million, 96 percent of which was ad revenue. Domestically, Google reeled in $710 million in search ad revenue in 2003, representing 44 percent of the $1.6 billion U.S. search advertising marketplace, according to Jupiter. "As an investor, I would want to know why a $1 billion media company doesn't have any media people on its board," said Elliott. "They still think of themselves as a technology boutique and they're not." Indeed, technologists dominate Google's nine-person board.

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Google Founders Do It Their Way

Ann M. Mack

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