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Is Google right in creating new non-voting shares?

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Was Google right? The boy geniuses at Google Inc. say right up front that some people don't like what they did yesterday, but they make no apologies for creating a second class of stock with no voting rights.

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"We recognize that some people, particularly those who opposed this structure at the start, won't support this change - and we understand that other companies have been very successful with more traditional governance models," Larry Page and Sergey Brin, who founded the Internet search giant, said in a letter to shareholders.

"But after careful consideration with our board of directors, we have decided that maintaining this founder-led approach is in the best interests of Google, our shareholders and our users," they added in the letter as they also reported a surge in first-quarter profit and revenue.

"... The proposal we announced today is consistent with the governance philosophy we articulated when we took the company public, as well as the trend for newer technology companies to adopt strong dual-class structures."

Google announced after the markets closed that it is creating a new class of non-voting shares via a dividend to stockholders on a one-for-one basis.

It also reported that revenue climbed to $10.7-billion (U.S.), up 24 per cent. Excluding commissions to partners, revenue rose to $8.14-billion (U.S.) in the quarter, up from $6.54-billion. Profit surged to $2.89-billion or $8.75 a share, from $1.8-billion or $5.51.

Google called the dividend an effective stock split, but it's one that rubs some governance observers the wrong way because Mr. Page and Mr. Brin continue to control the votes via what are already multiple voting shares.

While Mr. Page and Mr. Brin understand that it goes opposite to governance models, they stressed that they have protected the company from "outside pressures and the temptation to sacrifice future opportunities to meet short-term demands." Success, they argued, is "more likely if you concentrate on the long term."

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It is an interesting argument. They cited the fact that it took more than three years to get the first Android device to the market, and three more years after that for the the operating system to fund a "critical mass" in the market, which it certainly has.

"These kinds of investments are not for the faint-hearted," they added.

You've got to love these guys. They included a note from chief legal officer David Drummond that began: "This is not the usual yada yada ... so please read on."

Air Canada cancels flights Canada's biggest airline has cancelled several flights at Toronto's Pearson International Airport, and is warning of disruptions amid what it calls an illegal walkout by some pilots, The Globe and Mail's Brent Jang reports.

Air Canada warned travellers to check the status of their flights in advance given the turmoil.

"Due to illegal job action by some Air Canada pilots, Air Canada is experiencing delays and some cancellations of flights today," it said amid the latest labour troubles to hit the airline.

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"Air Canada is making every effort to re-accommodate affected customers."

China's growth slows Economic growth in China slowed in the first quarter of the year, but, some economists say, there are signs of a "bottoming out" along with expectations that the central bank will ease policy further.

The first-quarter growth reading came in at 8.1 per cent, down from 8.9 per cent in the fourth quarter of last year and below the 8.4 per cent that was expected. It's the slowest pace in almost three years.

But, said Mark Williams and Qinwei Wang of Capital Economics, "there were some clues in the latest data that the economy is bottoming out and, with the State Council giving a strong signal today that credit policy will be loosened further, we think it likely that growth will pick up in Q2."

Markets have been extremely anxious when it comes to China, given its role in helping the global recovery. While today's number disappointed investors, the economists stressed that it's "still a long way from the hard landing many have feared."

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