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Why Google Split its Stock in 2014: To keep control.

Stashed in: Google!, Google, Larry Page, Sergey Brin

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Page and Brin originally had little interest in doing a stock split, even as Google shares soared from their IPO price of $85 in August 2004 to more than $700 in 2007. They reasoned a split would only cheapen the shares and attract speculators looking to make a quick buck. Page, 41, and Brin, 40, prefer long-term shareholders who are more likely to tolerate their strategy of making big bets on technology that may take years to pay off.

But the founders' perspective evolved as Google continued to issue more stock to fund acquisitions and compensate a company workforce that soared from about 2,300 employees in 2004 to 44,000 at the end of last year.

The growth in Google's outstanding shares threatened to undercut a system that Page and Brin had set up to ensure they have final say in all key decisions. Their control is based on their ownership of Google's Class B stock, which entitles them to 10 votes for each vote of Class A stock.

Combined, Page and Brin own virtually all of the Class B stock, 46.7 million shares. That gives them 56 percent of the company's voting power. Nevertheless, they were worried their votes eventually would slip below 50 percent as they sold more of their Class B stock and more Class A shares are issued to finance acquisitions and reward other Google employees.

Thank you for that simple explanation: it makes sense.

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