Google 2011 Annual Report Download - page 19

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I wanted to quote all that because these were the clear, well-publicized expectations
we established for investors in 2004. While this decision was controversial at the
time, we believe with hindsight it was absolutely the right thing to do. Eight years
later, these statements are still remarkably accurate, and everyone involved has
realized tremendous benefi ts as a result. Given Google’s success, it’s unsurprising
that this type of dual-class governance structure is now somewhat standard among
newer technology companies.
In our experience, success is more likely if you concentrate on the long term.
Technology products often require signifi cant investment over many years to fulfi ll
their potential. For example, it took over three years just to ship our fi rst Android
handset, and then another three years on top of that before the operating system
truly reached critical mass. These kinds of investments are not for the faint-hearted.
We have protected Google from outside pressures and the temptation to sacrifi ce
future opportunities to meet short-term demands. Long-term product investments,
like Chrome and YouTube, which now enjoy phenomenal usage, were made with
a signifi cant degree of independence.
We have a structure that prevents outside parties from taking over or unduly
infl uencing our management decisions. However, day-to-day dilution from routine
equity-based employee compensation and other possible dilution, such as stock-based
XVII