Google has two publicly traded stocks because it uses a dual-class share structure to maintain founder control while raising capital. The company created Class A (GOOGL) and Class B (GOOG) shares, with Class A having fractional voting rights compared to Class B.
Most companies issue single-class stocks where each share has equal voting rights. Google's parent company, Alphabet Inc, uses a different approach:
This structure lets founders maintain voting control even as they sell Class A shares to raise capital.
When Google went public in 2004, it issued Class A shares (GOOGL) and Class B shares. In 2012, it created Class C shares (GOOG) through a stock dividend, giving existing shareholders one Class C share for every Class A share they owned.
This move didn't dilute voting power but created a new class of non-voting shares that could be sold to raise capital without affecting control.
Many tech companies use dual-class structures to protect founder vision during growth phases. Facebook (now Meta Platforms) and Snapchat use similar systems. Critics argue this can lead to poor governance, while supporters claim it allows long-term innovation without short-term shareholder pressure.
Many people think GOOGL and GOOG represent different parts of Alphabet's business. In reality, both classes represent ownership in the entire company, just with different voting rights. The price difference comes from market demand for voting shares.
I once tried explaining this to a friend who thought GOOGL was just YouTube and GOOG was everything else. That's completely incorrect - both represent the whole company, with different voting rights attached.