Times Online - Analysis

Times Online - Analysis Search engine bowled a googly By Robert Cole GOOGLE’S founders, Sergey Brin and Larry Page, say they have no intention of letting their internet search company lead a conventional life. Boys, it is hard to imagine anything less conventional than allowing your firm to become embroiled in a multibillion-dollar mess a few days before you hoped to preside over the most keenly awaited IPO of the year, if not the decade. If one was minded to be extraordinarily generous, one might say that the problems owned up to by Google yesterday were the result of an unfortunate administrative cock-up. There is nothing wrong with lining the paypackets of employees and contractors with shares or share options. For a young company eager to conserve cash it is a sensible strategy to follow. One might have thought that most employees and contractors working for a youthful, unquoted technology company would much prefer to be paid in hard cash rather than flimsy shares. Even for an outfit with the power and promise of Google, it is an achievement for the managers to swing such a cash-saving trick. Google’s mistake was to fail to register the stock and stock options issued to the employees and contractors with the Securities and Exchange Commission, the US financial regulator. Google was obliged to do this in spite of the fact that the company was unquoted when it issued the stock and stock options.