January 10, 2005 4:00 AM PST

Google riches outed on the Web

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if they meet certain thresholds. To qualify for the exemption, a company cannot sell more than $1 million worth of stock; 15 percent of the total assets of the company; or 15 percent of the outstanding shares within a 12-month period.

"Google blew through the 701 limit," said Mark Tanoury, senior securities attorney at law firm Cooley Godward.

Garry Mathiason, senior partner at labor and employment law firm Littler Mendelson, said he recalls a similar situation for about a dozen other technology companies over the years, adding that the filings caused some distress for otherwise good-spirited office cultures.

"There is a surface politeness...but under the surface all the problems exist. We wouldn't be human if they didn't."
--Garry Mathiason, senior partner, Littler Mendelson

For some people, sudden IPO wealth may validate the work they have put into the company and boost self-confidence, he said.

But for others who may not have gotten the same share allotments or were hired at later stages, there's a sense of inequity that can lead to a falloff in morale and job performance while increasing strains on employee relationships, he said.

"While it may not be discussed very much, it absolutely affects both their attitude at work and interaction with co-workers," said Mathiason. "There is a surface politeness, and 'we don't talk about that,' but under the surface all the problems exist. We wouldn't be human if they didn't."

Recently, CEO Eric Schmidt sold 113,000 shares of stock for about $22 million, and Brin sold 200,000 shares for about $40 million.

Internal tensions over money run in stark contrast to Google's well-crafted image of technologists bettering the world by perfecting Internet search. Google founders Brin and Page have long sought to set a tone internally and externally that money is an afterthought to their mission of organizing the world's information, emphasizing their humble lifestyles.

The culture has reflected that kind of college-kid humility, with its hallmark lava lamps, colored balls and on-campus free food. Many Google employees outwardly project the role of starry-eyed believers, carrying the ideal of a grand mission in the mold of early Apple Computer days.

A soaring share price won't necessarily destroy such ideals, but it also won't necessarily help sustain them.

Money has already brought some changes to the campus, including the arrival of in-house wealth-management services to help some employees with their stock options and a security team to protect top managers from would-be attackers.

Wealth also raises the specter of employee defections. Already, the company's chief marketing officer, Cindy McCaffrey, has turned in her playbook. Sources say that many other early employees also are preparing to leave after stock options are taken out of a lock-up early this year.

Merrill Lynch recently initiated coverage of Google with a "neutral" rating based on fears that the end to this lock-up period might depress the stock slightly. It also said that it was concerned about Google's more immediate focus on innovating cool technologies, rather than making money from them.

"Once a person has the sense of the wealth, the commitment to the company and where it's going can fall off," Littler Mendelson's Mathiason said.

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Yahoo all over again.
Hopefully many of you "old-timers" remember when Yahoo went IPO, and just how high their stock went (over US$250/share).

This sort-of thing puts Google in the negative spotlight, although I'm sure they'll find some way to weasel out of it. Rather than our government investigating Microsoft, it should be focusing more on companies like Google -- companies that still seem to suffer from the elitist DOT-COM mentality where initial employees are somehow worth millions of dollars compared to newer ones who work just as hard.

Google's hiring practises have also been under the spotlight numerous times in the past. I myself applied there back in 2001, went through the interview process, and was offered a salary which most people in the Bay Area cannot reasonably live on (around US$40K/year) -- "but you get TONS of stock!" said HR. When I asked Google's HR folk if they knew of any apartment complexes in the Bay which accepted stock as a form of rent payment, they looked at me as if I was from Mars.

What happened to moral, decent, and non-shady American businesses? Where did we go wrong? Or is Google just another example of capitalism gone extreme?
Posted by katamari (310 comments )
Reply Link Flag
Sounds like sour eggs...
Posted by Johnny Mnemonic (374 comments )
Link Flag
negative spotlight
<a class="jive-link-external" href="http://www.analogstereo.com/eagle_owners_manual.htm" target="_newWindow">http://www.analogstereo.com/eagle_owners_manual.htm</a>
Posted by Al Johnsons (157 comments )
Link Flag
We can now do something about Google/Yahoo screwing us.
Problem with Google &#38; Yahoo is that they are owned by the same gang.
That is right, they may seem like competing companies, separate companies.
But in fact the same silicon valley (wall street) gang owns both of them.
That is Stanford Univ, KlinerPerkins, Sequoia capital, etc.
What this results in is that they offer no real choice, they offer a monopoly.
And monopolies are always bad for people: search users, Advertisers, and
prospective/current employees, etc.

So I thank god every day that we have a real alternative search engine now,
which is AnooX (www.anoox.com)

Why is AnooX better than mega Wall Street backed corporate giants Google &#38; Yahoo:

1- AnooX search results are Optimized by majority Vote of the people, that is us, rather
than some silicon valley insider schemes, which are Google &#38; Yahoo methods.

2- AnooX shares its Ad revenues with its search users, that is us again.

3- AnooX Ad rates are like 90% less than Google &#38; Yahoo, because AnooX is essentially
a not for profit company.

Mind you AnooX does not have the luxury of Google &#38; Yahoo of being armed with
Billions of dollars, so it currently runs on few servers and thus its search results are
a wee bit slow and it Indexes home pages of web site, so it is good for finding
businesses. But with our support, it will become one of the top Search engines,
for our benefit. After all AnooX is a people driven search engine, for the benefit of
the people, unlike Google &#38; Yahoo which are for the benefit of silicon valley (wall streets)
Posted by 207495111267145837975635436522 (58 comments )
Reply Link Flag
Uh, No...
I just tried you so-called 'search engine', AnooX, and I have to say it returned the worst results I have ever seen for an engine. What you fail to say here is that most voters have a self interest. While Google applies the PageRank algorithm (not perfect, but very effective), your site applies people (which you hope will give honest results above and beyond the failed algorithms you apply initially). Sadly, the people that appear to be voting to 'improve' results on your engine appear to be spammers. Or idiots. Or both.

The backers of Google and Yahoo! should be proud they've delivered services that are usable. If they benefit financially from this, great--that's capitalism. From the looks of the results returned by AnooX, their founders should be run out of town on a rail.
Posted by stephenpace (72 comments )
Link Flag
Eric Schmidt is the biggest Mafia puppet in the US. He is bad news for apple users. http://endmafia.com
Posted by geo11101 (76 comments )
Reply Link Flag

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