Big tech companies like Google and Facebook have made their fortunes by putting the power of the Internet in the hands of ordinary people. But when it comes to empowering their own shareholders, these companies are a lot less willing to relinquish control.
When these firms went public in 2004 and 2012 respectively, they each issued two different classes of stocks: One class to be held by the founders and another by ordinary shareholders. In both cases, the voting rights of these share classes enabled the founders to retain complete control of the company. And on Monday, Google reached a settlement in a class action lawsuit that will allow it to issue a third class of shares with no voting rights at all, which will presumably give the firm ammunition for future acquisitions.