Google cruises through festive annual meeting
EmptyMOUNTAIN VIEW, Calif. -- Google Inc.'s stock price has been lagging the overall market so far, but that didn't seem to bother several hundred mostly festive shareholders who attended the online search leader's annual meeting Thursday.
About the only letdown during the 75-minute session came when Google Chairman Eric Schmidt said the company has no plans to split its stock, reiterating a stand that the board has consistently taken. The question comes up frequently because of Google's lofty stock price, which finished Thursday at $461.47.
But Google shares haven't fared so well so far this year, gaining just 99 cents, or 0.2%, since the end of 2006. Meanwhile, the bellwether Dow Jones industrial average has climbed 6% while the Standard Poor's 500 index -- of which Google is a component -- has increased by 5%.
Google's stock has performed much better over the long haul, a factor that no doubt contributed to the convivial mood of the few hundred shareholders who crammed into a small room at Google's Mountain View headquarters. The shares have increased more than fivefold since Google's initial public offering in August 2004.
Just as it had in its two previous annual meetings, Google buttered up the crowd beforehand by feeding them a free lunch from the same cafeteria that provides free meals to employees.
Los Angeles resident Lauren Babbette, who has owned about 30 shares of Google for the past two years, was so impressed with the hospitality that she got up during the meeting to thank Schmidt for treating her much better than she was last week when she attended Berkshire Hathaway Inc.'s annual meeting.
"I was so depressed after a got off the plane (returning from the Berkshire meeting) that I needed to go to some place with a little spirit like Google," Babbette said in an interview after the meeting. "I was treated like gold here and it's such a fun-loving place."
Preserving Google's famously collegiate atmosphere while also expanding into new markets represents the company's biggest challenge, Schmidt told reporters during a question-and-answer session held before the annual meeting.
Google has hired nearly 10,000 employees since the end of 2004 and still expects to add thousands of more workers before this year is over.
"In the last year, my biggest worry has been scaling the business," Schmidt said. "When you grow this quickly, you are bringing in employees who believe they understand the Google vision, but there is always the possibility you will lose the formula."
In other comments to reporters, Schmidt said Google has no interest in entering the bidding for Dow Jones & Co. or Reuters Group PLC, which both received takeover offers this month. He also predicted the company would clear all the necessary regulatory hurdles to complete its planned $3.1 billion acquisition of Internet ad distributor DoubleClick Inc. by the end of this year.
Google's expansion has been fueled by its dominant position in the rapidly growing Internet ad market, which is expected to propel the company's annual revenue beyond $15 billion in just its 10th year in business.
Hoping to extend its success off-line, Google also is trying to use its automated approach to marketing to place ads in radio, television and newspapers. Schmidt told shareholders Thursday that this should be a "breakout" year for Google's push into radio advertising.
With so much money pouring into the company, Google increasingly draws unflattering comparisons to Microsoft Corp., whose control of the operating system that runs most personal computers established it as one of the world's most feared companies.
"It's natural for people to be concerned about that," Google co-founder Larry Page said in response to a shareholder question about the Microsoft comparisons. "If I weren't here, I would be concerned about it. I think our behavior will show we are not the same kind of company."
But Google definitely seems interested in invading Microsoft's turf. Toward that end, Google has rolled out a series of online applications as free alternatives to Microsoft's widely used word processing, spreadsheet and meeting presentation programs.
Although Schmidt has downplayed Google's programs as a competitive threat to Microsoft, the company expects the applications to play an increasingly important role in its business. To emphasize that point, Schmidt said Google is embracing "search, ads and apps" as its new theme.