Google Inc. shareholders hailed management during the online search engine leader’s annual meeting Thursday, heaping praise on a company that has created $55 billion in investor wealth during the past year.
The only serious criticism lodged during the 75-minute meeting attended by about 200 shareholders focused on Google’s recent decision to censor some of its search results in China to adhere to the country’s restrictions on free speech.
Google co-founder Sergey Brin sparred briefly with the critic, Tony Cruz of Amnesty International USA. Brin pointed out that rival search engine Yahoo had been cooperating with China far longer, going so far as to provide personal information that has helped land dissidents in jail.
Reiterating previous management comments on the issue, Brin said Google believes its presence in China ultimately will force the government to become less repressive.
He noted that Google’s January launch of a search engine under a Chinese domain name already has helped trigger Congressional hearings and drawn widespread media attention to the issue.
Shareholders otherwise were mostly upbeat.
The mood reflected the performance of Google’s stock, which has climbed by 70 percent during the past year as the company widened its leadership in Internet search — gains that have put the company on a pace to generate about $10 billion in revenue just eight years after its inception in a Silicon Valley garage.
That kind of volatility bothers Stephen Moress, who traveled from Los Angeles to attend Thursday’s meeting. “It’s been a real roller coaster and a little scary,” said Moress, who owns 1,000 Google shares. “They need to come up with a better plan to communicate with the press and put a better spin on things.”
Oakland, Calif. resident Jack Easterling, who owns 400 Google shares, said he has been feeling more nervous about the stock’s turbulence since the price began dropping from its peak of $475.11 in early January.
Easterling, 74, still has made a lot of money on the stock so far, leaving him with few complaints. “I am happy with the way the company is performing.”
The high cost to buy Google shares prompted one stockholder to ask if the company’s board will split the stock to make it more affordable to the masses.
Brin said a split isn’t planned because Google wants prospective investors to be highly motivated to conduct a through financial analysis of the company before buying. “We would rather not have shareholders who say, ‘Look, it’s $20, it’s cheap, so I’ll buy it,”’ Brin said.
Google CEO Eric Schmidt assured shareholders that Google is working diligently to develop even more products to build upon the company’s success story, which included a $592 million profit on revenue of $2.25 billion during the first three months of this year.
“We have lots more stuff coming,” Schmidt said. “The rate of innovation and impact of Google is just beginning.”
Toward the end of the meeting, Schmidt reminded investors that Google eventually won’t be able to deliver the high level of the earnings growth that enabled the stock to more quadruple from its August 2004 initial public offering price of $85. Google’s earnings have increased by at least 60 percent in every quarter since the IPO.
“It’s safe to say, over time, that our growth rates will slow,” Schmidt said. “It’s the law of diminishing returns. It’s real difficult to know when this will occur.”
A similar cautionary remark by Google’s chief financial officer triggered a sharp slide in the company’s stock price in late February.
While shareholders flattered them Thursday, Google executives complimented Apple Computer Inc., which, like Google, is one of Microsoft Corp.’s biggest rivals.
“I think we have a lot of shared values and shared principles with Apple,” Brin said.
Schmidt went even further, calling Apple “one of the great innovators. They are amazingly impressive.”