Technology History | Googleplex, Mountain View — What US$1.65 Billion Looked Like in Share Certificates

Google's press release of 13 November 2006 does not say US$1.65 billion anywhere in its arithmetic. It says 3,217,560 shares. The company announced on 9 October 2006 that it had agreed to buy YouTube in a stock-for-stock transaction, and both press releases carry a Mountain View dateline, this campus. Thirty-five days separated the announcement from the closing, and the gap is where the interesting numbers live. The share count was not fixed on the day of the handshake. Google calculated it by taking US$1.65 billion, subtracting roughly US$15 million it had already advanced to YouTube between signing and closing, and dividing by the average closing price of its own stock over the thirty trading days ending 9 November 2006. On top of the 3,217,560 common shares came restricted stock units, options and a warrant convertible into a further 442,210 shares. An eighth of the equity went into escrow for a year, security against indemnification obligations that the filing declines to specify. Anyone reading it in 2006 could guess: the copyright suits everybody knew were coming. Google shares closed at US$429.00 on the day of the announcement. By the closing on 13 November they stood at US$481.03, which meant the sellers were already holding something nearer US$1.77 billion than the headline figure, and explains why later accounts cite both. YouTube had 65 employees at the time of the announcement, and Eric Schmidt's statement said they would stay where they were, in San Bruno, operating independently. It was the most expensive thing Google had bought to that point. The year before, the company had spent US$130.5 million acquiring fifteen small companies put together. Google already had a video product. Google Video had launched in January 2005, a month before youtube.com was registered, and lost anyway; buying the winner cost more than building the loser had. The campus in the photograph is the one named in both filings, and it remains Alphabet's headquarters. Carol Highsmith took this view of one of its plazas for the Library of Congress. The buildings behind it are working offices with controlled entry, so the plazas and the paths between them are as close as a visitor gets. Photo: Carol M. Highsmith, public domain, via Wikimedia Commons