Google founders tighten grip on firm and record profits | Business| Economy and finance news from a German perspective | DW | 13.04.2012
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Business

Google founders tighten grip on firm and record profits

The online search leader has reported a 61 percent increase in net income for the first quarter of 2012 and has said it will issue a new class of stock aimed at helping Google's senior leaders keep control of the firm.

Google's first quarter revenues rose to $10.6 billion (8.04 billion euros) in 2012 - up 24 percent from the same period a year ago, and the second consecutive quarter in which revenues surpassed the double-digit billion dollar mark, the California-based firm announced Thursday.

Net profits came in at $2.89 billion after $1.8 billion in the first quarter of 2011, marking a staggering 61 percent increase in the course of last year.

Speaking of "another great quarter," Google Chief Executive Larry Page said that the firm saw "tremendous momentum from the big bets we've made in products like Android, Chrome and YouTube."

"We are still at the very early stages of what technology can do to improve people's lives and we have enormous opportunities ahead," he added.

In addition, Page announced a stock split at Google aimed at rewarding current shareholders, while at the same time allowing Google's senior leaders to keep control of the company.

Tighter grip for long-term goals

Google's board - headed by former CEO Eric Schmidt - has unanimously approved a stock program under which shareholders get a newly created non-voting share for each current share they hold.

The aim of the program was to protect Google from "outside pressures" and the temptation to "sacrifice" future opportunities to meet short-term demands, the firm's co-founders Larry Page and Sergey Brin said in a letter to investors.

"After careful consideration with our board of directors, we have decided that maintaining this founder-led approach is in the best interest of Google, our shareholders and our users," they added.

The proposal is expected to be approved by a shareholders' meeting in June since Google's co-founders and Chairman Eric Schmidt together have controling interest in the company.

uhe/gb (dpa, Reuters, AFP)