Google’s Chairman Eric Schmidt to Sell Roughly 42 Percent of Stake

Google Cief Executive Eric Schmidt to sell roughly 42 percent of his stake in the Internet searching gi.

Google’s Chairman is cashing in on his massive pile of the company’s shares — to the tune of more than $2.5 billion. Photo: Panorama Mercantil/Flickr

Eric Schmidt will sell 3.2 million shares of Class A common stock through a stock trading plan, the Internet searching company announced in a filing with the U.S. Securities and Exchange Commission on Friday after the markets closed.

The former CEO has filed all the required documents with the SEC that will let him sell roughly 42% of his stake in the company over the next year.

As Mashable reports, during his work at Google, Schmidt has netted 7.3 million Google shares, representing nearly 3% of the company.

At $785.37 a share — the stock’s new record high, which was registered on Friday — selling 42% would net him roughly $2.51 billion.

The fact that the Google’s chairman will save a significant number of shares means he’ll have a good deal of “skin in the Google game,” said Needham & Co analyst Kerry Rice. However, he warned that it could hint at Schmidt playing a less central role within the company going forward.

“My speculation is that Eric’s relationship with Google is evolving,” said Rice. “I would assume that as he decides he wants to diversify away from Google – both his career and financially – he’s got ideas of what he would like to do with some of his funds.”

The news comes soon after reports surfaced last month claiming that revenue from Google Inc’s core Internet business exceeded predictions during the holiday quarter with advertising rates falling less than in previous periods.

Excluding traffic-acquisition costs, the business generated net revenue of $9.83 billion, compared to $8.13 billion last year, the company reported at the time. The numbers eclipsed a $9.6 billion average predictons from six analysts.

“Business looked really strong, especially from a profitability perspective. They really grew their margins in the core business,” said Sameet Sinha, an analyst with B. Riley Caris.

“Most of that strength seems to be coming from international markets which grew revenues quite substantially: up 23 percent year over year, versus the 15 percent growth in the third quarter.”

As Reuters wrote, average cost-per-click, a critical metric that denotes the price advertisers pay Google, declined 6 percent from the previous year, “the fifth consecutive quarter of decline but an improvement over the third quarter’s 15 percent slide.”

When asked about the potential threat from a recently-launched social networking search product by the most popular social network Facebook, Google Chief Executive Larry Page reminded of the company’s years of online search experience and innovations such as voice-based search.

Consolidated net income in the fourth quarter was estimated about $2.89 billion or $8.62 per share, compared with $2.71 billion, or $8.22 per share, in the year-ago period when Google had not yet acquired Motorola.

Excluding certain items, Google said it earned $10.65 per share in the fourth quarter.

“The core business is a great business and the fourth-quarter is always a time for Google to shine. However, Motorola is still losing money and click rates still declined. They only declined 6 percent, but go back four or five quarters and click prices were improving. So mobile is still pressuring click prices,” Gillis said.

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