At Google, Shareholders Have No Clout

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Market Movers

by Ryan Avent

Main

Why China's Wealth Fund is Right to ... The X Factor in Terra Firma's EMI Ac...

Nov 29 2007 3:00PM EST

Robert Cyran is unimpressed with Google's push into clean energy:

The company risks spreading itself too thin -- chasing everything from personalized biotechnology to space flight. Its shareholders probably don't want Mr. Page and other executives spending their time, or Google's cash, on a spate of questionable pet projects that may accomplish little more than satisfying its founders' hubris.

This is exactly the kind of thing that Google was very explicit about when it went public. We will not give public shareholders any kind of useful voting rights, they said, nor will we give quarterly earnings guidance. We will spend our money on pet projects that shareholders might not like or want. If you don't like that, don't buy the stock. Google's executives are, quite explicitly, not answerable to their public shareholders. So it seems a bit rich to criticise them for doing just what they said they were going to do all along.

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