As CEO of Google for the past year, Larry Page's presence at the company he's co-founded has never been stronger. He's reshaped the company, moving product divisions and cutting superfluous projects to maintain focus. He's in full control.
And he wants to keep it that way.
In a letter to investors posted during Google's first-quarter earnings call on Thursday, CEO Larry Page announced plans for a dividend for owners of Google shares in the form of a new class of non-voting stock. For each share stockholders own, they'll receive one new share of the non-voting stock. "It's effectively a two-for-one stock split, something our users have long asked us for," said Page in the conference call.
But don't call it altruism. In essence, it's a way for Larry, Sergey and Eric Schmidt to use shares to make long-term investments without diluting their own voting shares, thereby slowly losing ultimate control over the company.
“Day-to-day dilution from routine equity-based employee compensation and other possible dilution, such as stock-based acquisitions, will likely undermine this dual-class structure and our aspirations for Google over the very long term,” Page and co-founder Sergey Brin wrote in a letter to investors released Thursday. "These non-voting shares will be available for corporate uses, like equity-based employee compensation, that might otherwise dilute our governance structure," the letter said.
Though Page says that doesn't mean Google is planning another massive acquisition, like that of the Motorola Mobility buy last year.
As far as the numbers are concerned, Google's balance sheet came in nearly on par with Wall Street's expectations. The company had revenues of $8.14 billion during the first quarter, with profits of $10.08 per share. That's somewhat better than the $9.65 per share Wall Street had expected, though sales weighed in at just slightly under what analysts had thought: $8.14 instead of $8.15 billion.
Aggregate cost-per-click growth -- or the amount that advertisers pay Google for each click-through per ad served -- was down 12 percent, a warning sign for investors who have grown wary of the declining price for an ad click.
But just like last quarter, Google claims there's nothing to worry about. "We believe that shifts in CPC or paid clicks do not reflect on the health of our fundamental business," said Patrick Pichette, Google's chief financial officer, in a conference call on Thursday. What's more, declining CPC price could even be seen as helpful. "The lower costs create better opportunities for our advertisers," Pichette said.
At the same time, the number of paid clicks rose by 39 percent, which Pichette attributes to changes in advertising formats. "Ad formats drive a lot in terms of paid clicks," Pichette said. "If it's a better ad, people click a ton more on them."
Most of Google's reporting on other key areas of the business didn't yield much of interest. YouTube continues to flourish with more than 800 million monthly active users. And Page cited the continued expansion of Google+, the company's social effort that now boasts over 170 million registered users - even as Google refuses to release numbers of which of those actually go to Google+.
But Page further emphasized how key Google+ is to the company's long-term growth. Instead of a handful of disparate apps and siloed sites that once made up Google, Page sees Google+ as the connective tissue to the sprawling company, an effective "social spine," in his own words.
"You’re just using one Google, not a series of disconnected products," Page said.
When asked his thoughts on Android and the current state of the tablet landscape, Page hinted at what Google has in store for the Nexus project: The low end.
He noted the runaway success of certain "low-end Android tablets" that aren't using Android proper. In other words, the Kindle Fire is kicking ass, and Google has noticed. Following that, Page hinted at the possibility that Google may produce a low-cost Android tablet of its own, most likely one of the next products in the company's "Nexus" project.
