As you know, Google dominates the online world from search to advertising to smartphones. But despite its ubiquitous presence shaping modern technology, the company remains shrouded in some mystery when it comes to who actually owns Google and holds the reins of power.
I want to walk you through unpacking the intricacies of who owns Google. This grants key insights into the tech giant that I‘ve analyzed extensively as a data analyst – one that still seems only poised to expand its reach even further.
The Backstory Behind the Alphabet Soup
First, let‘s rewind a bit to the humble beginnings in a California garage with Stanford students Larry Page and Sergey Brin tinkering away at what would become central to Google‘s success – the PageRank search algorithm.
Key Milestones:
- 1998 – Google Inc. officially launches and opens first office
- 2004 – Google goes public in one of the most anticipated IPOs of a generation
- 2013 – Google surpasses $50 billion in annual revenue
- 2015 – Restructures to form new parent company Alphabet
- 2021 – Google rakes in over $257 billion in annual global revenue
You likely remember hearing about the 2015 restructuring where Google formed a new parent company called Alphabet. As a data analyst, I regularly monitor tech company moves and can provide context into some strategic reasons Alphabet offers advantages:
- Separates core search/ads business from other bets like self-driving cars, biotech research, AI, broadband internet
- Provides more transparency into segment financials instead of aggregated under one umbrella
- Enables independent focus/direction for distinct company divisions with dedicated leadership
There are technically two different publicly traded stocks associated with the company:
- Google Inc. Class A shares (GOOGL) – confer voting rights
- Google Inc. Class C shares (GOOG) – no voting rights
But when looking at who owns and controls Google, we simply need to follow the money that funnels up to the very top at parent company Alphabet Inc.
From Stanford Students to Power Brokers Calling the Shots
Larry Page and Sergey Brin are still very much the proverbial face of Google. You likely know their famous PageRank search algorithm proved so effective that the pair took leave from their Ph.D studies to focus full-time on developing Google Search.
But what roles do they fill now? And just how much of the company do they own?
Page relinquished his CEO title in 2019 but continues directing long-term strategy as a board member and controlling shareholder. Sergey Brin similarly exited formal management but participates on the board while also pouring time into personal projects like airships.
Yes, you read that correctly – airship technology is one of Brin‘s side passions. With a personal net worth crossing $90 billion, he can casually explore experimental dirigibles while contractually retained as a critical strategic advisor to Alphabet.
Now clearly Page and Brin don‘t work in the technical trenches writing code or designing products anymore. But their vision and direction is still deeply etched into the company ethos – especially considering the consolidated control they structured from the early days…
Cementing Control Through Share Class Stratification
Given Google‘s absolutely meteoric rise, lucrative IPO seemed imminent by the early 2000s. But Page and Brin hatched an important idea in 2002 to retain decision-making control even after going public.
They created Class B shares granting 10 times the voting power of regular Class A shares. By divvying up this special stock just between company executives, it ensured Page & Brin would always wield substantial control over business direction.
And with Class C shares having no votes at all, they gained additional flexibility doling out share rewards to employees without worrying about diluting power.
Other tech giants have deployed similar tactics but Google‘s precise execution enabled Page and Brin to still control over 50% of voting power when most insider Class B holders are hovering below 30% control.
Breaking Down Ownership: How Much of Google Do Insiders Actually Hold?
According to latest filings, aggregate leadership ownership stands at:
- Larry Page – 24.9% of voting power
- Sergey Brin – 24.9% of voting power
- Sundar Pichai – 2.1% of voting power
- All directors/officers combined – 72.2%!
For context, executive leadership only accounts for 13.3% of total shares outstanding. But by leveraging those special Class B shares conferring exponentially more voting power, Page and Brin have virtually free reign even while non-insiders greatly outnumber them.
Given their special founder shares and sizable Class A stakes, latest ownership statistics have:
- Sergey Brin holding ~2.9% of total shares outstanding
- Larry Page similarly possessing 2.8% of total shares
To put this in perspective, Alphabet has over 6.79 billion total shares outstanding as of summer 2022. So:
- 2.9% = Brin holds ~197 million shares
- 2.8% = Page holds ~190 million shares
Whereas current Alphabet CEO Sundar Pichai holds less than 50,000 total shares – majority granted through compensation rather than personal stake.
Tracking Drifts in Power Over Time
Despite creating the dual-class system shielding their control, Page and Brin have transferred small portions of their holdings in recent years – perhaps just enough to avoid antitrust scrutiny.
Pichai for example received 24,000 Class B shares unlocking exponentially higher voting power. But the split is still roughly 50/50 between Page and Brin together versus all other shareholders combined.
Intriguingly, in 2021 filings show:
- Brin gifted over 5.7 million Class B shares to a personal foundation
- Page similarly gifted 4.8 million Class B shares to his climate-focused foundation
So while their ownership grip may be loosening, Page and Brin still rule the roost at Alphabet. Their Class B shares ensure sweeping control over strategic direction even as they step further away from daily business operations.
| Year | Total Shares Controlled | Voting Power |
|---|---|---|
| 2016 | 383 million | 56.8% |
| 2022 | 340 million* | 51.7%** |
*Reflects shares personally owned by Page & Brin + gifted to foundations
**Consolidated voting power of Page and Brin
So in recent years, we do see slight declines in the total shares controlled and voting power wielded by the Google guys. But they remain firmly planted in the driver‘s seat absent some extraordinary circumstance.
Now let‘s shift gears to examining other major shareholders that own public float…
Institutions and Funds Hold Large Public Stakes
Most ordinary investors looking to own a piece of Google are practically limited to purchasing publicly available Class A shares. And data shows these shares primarily get gobbled up by institutional investors and index funds:
- 63% of Class A shares owned by large institutions
- 62% of Class C similarly owned by asset managers
This demonstrates big funds control the sizable float not insider owned. But their ultimate voting power stays capped due to the special rules around Class B shares.
Analyzing the highest stake institutional owners:
- Vanguard Group – 7.4% of total share count (= all share classes)
- BlackRock – nearly 7% outright ownership
- Fidelity (FMR) – approximately 4% share stake
- T. Rowe Price also claims 3.6% ownership
Interestingly, over the past 5 years we‘ve seen ownership becoming more concentrated in top 5 institutional holders:
| Institution | 2017 Stake | 2022 Stake |
|---|---|---|
| Vanguard Group | 5.75% | 7.4% (+1.65% increase) |
| BlackRock | 6.3% | 7.2% (+0.9%) |
Now even as major investment institutions have grown their equity stakes, the largest holders individually still only control single digit percentages of ownership. They clearly remain hugely overshadowed by the consolidated power of Brin and Page.
But shareholder activism efforts continue trying to dilute insider strangleholds. What possibilities exist for influencing Google‘s ownership dynamics in the future?
Scenarios That Could Unseat the Google Founders
Given Page and Brin‘s special founder shares, the working assumption is they‘ll retain guiding dominance over Alphabet and Google for the foreseeable future. But as a keen observer of tech ownership trends, I see several fascinating what if scenarios that could loosen their grip:
Activist Consortium Wrests Away Some Control
While unlikely to immediately unwind shares structure, a loud vocal consortium of institutional investors and funds could pressure for incremental voting power shifts. If shareholder proposals gain sufficient backing, it may force board to distribute more foundation gifted B shares.
Government Intervention Splinters Dominance
Though no current traction, regulatory lawsuits or federal statutes limiting dual-class structures could abruptly shakeup voting dynamics. Extreme case would mandate distribution of insider shares across all classes.
M&A Attempt Triggers Ownership Shifts
If Alphabet severely stumbles or becomes bogged down by antitrust lawsuits, an opportunistic acquirer could swoop in to negotiate control from Page & Brin. Tough to imagine but big tech valuations can dramatically swing up and down.
While just hypothetical scenarios for now, public companies reaching the scale and influence of Alphabet often see power dynamics forcefully change over time.
Page and Brin created wonderful problem for themselves – building an irreplaceable platform that will likely overshadow competitors for the future. With no urgent incentive to relinquish any control, expect status quo with the Google guys staying planted in driver‘s seat.
But if Alphabet‘s next 20 years matches their first 20 reshaping the digital landscape, mounting public pressures may eventually compel the founders to loosen their corporate grip. We‘ll be tracking closely!
