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Google has oodles of profits

It's not searching the sofa for change
Fri Apr 13 2012, 12:04

INTERNET SERVICES JUGGERNAUT Google has released its latest financial information, and boy is it good.

Net income in this its first quarter of the year was $2.98bn (£1.8bn) an increase of 60 per cent against the same period last year. Revenues of $10.65bn did not let the firm down either.

"Google had another great quarter with revenues up 24 per cent year on year," said Google CEO Larry Page, presumably over the sound of popping champagne corks.

"We also 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. It is a very exciting time to be at Google."

It must be. Departments all across the firm have done well, and Youtube, Chrome and Android have all served Google well. Geographically things are rosy too, and the UK contributed revenues of $1.15bn, 11 per cent of the total.

In a letter, CEO Larry Page and co-founder Sergey Brin said the way Google has grown has surprised even them. They added that they will continue to push things forward.

"Sergey and I hoped, though we did not expect, that Google would have such significant impact, and this progress has made us even more impatient to do important things that matter in the world," said the letter that was signed by Page.

"Our enduring love for Google comes from a strong desire to create technology products that enrich millions of people's lives in deep and meaningful ways. To fulfill these dreams, we need to ensure that Google remains a successful, growing business that can generate significant returns for everyone involved."

The letter proposes that Google will issue a new round of shares to current shareholders. This will increase the pool and keep Brin and Page in control.

"Note that there will be no immediate change in votes, because everyone will still have the same number," it explained.

"In addition, Eric, Sergey and I have all agreed to 'stapling' arrangements so that, above set thresholds, if our economic interest in Google were to decline, our votes would as well. We also have provisions to ensure all shareholders are treated fairly from an economic perspective."

The proposal needs shareholder approval. If it is approved it will help the pair pursue Google's long term plans with some confidence, something that they said has helped them get to where Google is today.

"We believe that it will provide great competitive strength - insulating Google from short-term pressures, whatever the source, for a long time to come, while also giving us more flexibility around equity grants. Investors and others have always taken a big bet on us, the founders, and that bet will likely last longer as a result of these changes." µ


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