GOOG vs GOOGL: What is the difference? 

At its core, the distinction between GOOGL and GOOG boils down to a single, yet significant, factor: voting rights. Alphabet, like a few other tech giants, employs a multi-class share structure designed to centralize control while allowing for public investment.

When you see the ticker GOOGL, you are looking at Alphabet’s Class A common stock. These shares are publicly traded on the NASDAQ exchange and carry one vote per share. This means that as a holder of GOOGL shares, you technically have a say in corporate matters, such as electing board members or approving major company proposals. Think of it as a traditional common stock, where ownership comes with a voice in the company’s governance.

Conversely, GOOG represents Alphabet’s Class C capital stock. These shares are also publicly traded on the NASDAQ, but critically, they carry no voting rights whatsoever. Investors holding GOOG shares are essentially investing purely for the economic exposure to Alphabet’s performance, without any direct influence on corporate decisions. This class was specifically created to allow the company to raise capital without diluting the voting power of its founders and insiders.

Beyond the publicly traded GOOGL and GOOG, there’s a third class: Class B shares. These shares are not publicly traded and are predominantly held by Alphabet’s founders, Larry Page and Sergey Brin, along with a few other early insiders. The crucial element of Class B shares is their enhanced voting power: each Class B share carries ten votes. This super-voting structure ensures that despite public ownership, the founders retain significant control over the company’s strategic direction and long-term vision.

The existence of two public share classes for Alphabet isn’t an arbitrary decision; it’s rooted in a deliberate strategy to maintain founder control.

The genesis of the GOOG and GOOGL distinction can be traced back to a stock split that occurred in April 2014. Before this split, only Class A shares (then under the ticker GOOG) existed. Google’s founders, aiming to preserve their visionary leadership and insulate the company from short-term market pressures, sought a mechanism to issue more shares for acquisitions, employee compensation, and capital raising without diluting their collective voting power.

The solution was a 2-for-1 stock split that effectively created the non-voting Class C shares (GOOG). For every existing Class A share an investor owned, they received one new Class C share. This ingenious move allowed Alphabet to essentially double its outstanding shares while maintaining the founders’ proportionate voting control through their super-voting Class B shares. It’s a classic example of a “dual-class share structure” designed to empower long-term visionaries over potential activist shareholders.

Now that we understand the core difference, let’s address the crucial question for individual investors: Do voting rights really matter for you?

For the vast majority of individual retail investors, the voting rights associated with GOOGL shares hold little practical sway. Why? Consider this: your single vote, or even a few hundred votes, is like a grain of sand on a vast beach compared to the collective voting power of institutional investors and, more importantly, the founders’ Class B shares. Larry Page and Sergey Brin, through their Class B shares, command a super-majority of the voting power, effectively making most shareholder votes a formality.

Therefore, while holding GOOGL technically gives you a voice, its practical impact on major corporate decisions is negligible for small to moderate investors. If your primary goal is to influence company policy or board elections, owning GOOGL shares in a typical retail quantity is unlikely to provide that leverage.

Here’s where the two share classes align perfectly: their economic benefits. Regardless of whether you own GOOGL or GOOG, your economic exposure to Alphabet’s success is identical. Both share classes:

• Receive the same dividends: Both GOOGL and GOOG shareholders receive the same per-share amount as dividends.
• Benefit equally from stock splits: As seen with the recent 2022 stock split, both share classes participated equally, with each share being split 20-for-1.
• Represent the same underlying ownership stake: You own a piece of the same company, Alphabet, with all its diverse revenue streams, innovative projects, and future growth potential, whether it’s via a Class A or Class C share.

So, when it comes to the tangible financial returns derived from Alphabet’s business performance – be it revenue growth, profitability, or asset value – there is no difference between holding GOOGL or GOOG.

Given their fundamental difference in voting rights, one might expect a significant price disparity between GOOGL and GOOG. However, in reality, their prices typically track each other with remarkable closeness.

Historically, the prices of GOOGL and GOOG tend to move in near-perfect tandem. When Alphabet’s overall market valuation rises or falls, both share classes respond in almost identical fashion. This close correlation is primarily due to arbitrage: professional traders quickly identify and exploit any significant price differences, buying the cheaper class and selling the more expensive one, thereby quickly pushing their prices back into equilibrium.

However, minor discrepancies can occasionally arise. You might observe one trading at a slight premium (usually GOOGL due to its voting rights) or a slight discount (sometimes GOOG due to slightly higher liquidity in some instances). These differences are typically in the range of fractions of a percentage point and are often fleeting.

While often negligible, some factors can contribute to temporary minor price spreads:

• Perceived Value of Voting Rights: Theoretically, the voting right attached to GOOGL should command a small premium. In times of corporate uncertainty or potential activist investor involvement (though rare for Alphabet given its structure), this premium might marginally widen.
• Liquidity and Trading Volume: Sometimes, one class might have slightly higher trading volume or liquidity, which can marginally influence its price based on supply and demand dynamics in the short term.
• Specific Share Buyback Programs: On occasion, Alphabet has implemented share buyback programs that might target one class over the other, leading to temporary price distortions.
• Employee Stock Grants: A significant portion of employee compensation at Alphabet is often in the form of Class C (GOOG) shares. This steady influx of shares can, at times, affect its market dynamics, though often balanced by buybacks.

For the average individual investor, these minor, temporary price fluctuations are unlikely to be a significant factor in their long-term investment decision.

The choice between GOOGL and GOOG largely depends on your individual investment philosophy and priorities, though for most, the practical difference is minimal.

If your primary objective is to gain economic exposure to Alphabet’s robust business, its diverse portfolio of innovations (from Google Search and Android to YouTube and Google Cloud), and its long-term growth potential, then GOOG (Class C) is often the simpler and equally effective choice. You are investing in the company’s financial performance, and the absence of voting rights doesn’t diminish your share of its profits or future value. Many investors find the slightly lower price point (when it occurs) and the simplified approach of not considering voting rights appealing.

If, for philosophical reasons or a desire to technically participate in corporate governance, you prefer shares with voting rights, then GOOGL (Class A) is your option. While your vote may not significantly alter outcomes due to the founders’ control, some investors appreciate the principle of having that right. It’s akin to having a ticket to the shareholder meeting, even if you’re unlikely to be on the main stage.

For most long-term investors, the liquidity difference between GOOG and GOOGL is negligible as both are highly liquid stocks. However, very active traders or those dealing with extremely large block trades might observe slight differences in bid-ask spreads or daily trading volumes, but these are typically not concerns for individual retail investors. Always check current trading data if this is a concern for your specific trading strategy.

While choosing between GOOG and GOOGL is an important nuance, it’s crucial not to lose sight of the bigger picture: your investment thesis in Alphabet itself.

When investing in Alphabet, you’re investing in a diversified technology conglomerate. Its core strengths lie in its dominant search engine (Google Search), advertising powerhouse (Google Ads, YouTube), burgeoning cloud computing division (Google Cloud), and a vast array of “Other Bets” like Waymo (autonomous driving) and Verily (life sciences). The company’s continued innovation in artificial intelligence, its global reach, and its strong cash flow generation are key factors driving its long-term potential. Understanding these fundamental business segments and their growth trajectories is far more critical than the voting rights debate between GOOG and GOOGL.

No investment is without risk. For Alphabet, potential risks include increasing regulatory scrutiny, intense competition in various tech sectors, and the evolving landscape of digital advertising. Economic downturns could also impact advertising spending, a major revenue source. However, the rewards include exposure to a company with a proven track record of innovation, a strong competitive moat, and diversified revenue streams that position it for continued leadership in the digital age. Diligent research into Alphabet’s financial statements, management, and competitive environment remains paramount, regardless of which share class you choose.

The choice between GOOG and GOOGL ultimately boils down to a personal preference regarding voting rights. For the vast majority of individual investors, the practical impact of these voting rights is minimal due to Alphabet’s entrenched founder control. Both GOOGL (Class A) and GOOG (Class C) shares offer identical economic exposure to the underlying performance of Alphabet Inc., meaning they respond in lockstep to the company’s financial health, revenue growth, and any future stock splits or dividends.

Therefore, your decision should primarily hinge on your comfort level with the idea of having (or not having) a theoretical vote. If you prioritize simplicity and pure economic exposure, GOOG is an excellent choice. If the principle of having voting rights appeals to you, even if the practical impact is small, GOOGL is the way to go. In either case, your investment is in one of the world’s most innovative and influential companies. By understanding these distinctions, you empower yourself to make a confident and informed investment decision tailored to your unique financial goals.

Alphabet introduced the dual-class structure in 2014 through a stock split. The primary reason was to allow the company to issue new shares for various purposes (like acquisitions or employee compensation) without diluting the voting control of its founders, Larry Page and Sergey Brin, who hold super-voting Class B shares.

The main difference is voting rights. GOOGL (Class A shares) come with one vote per share, giving shareholders a say in corporate matters. GOOG (Class C shares) have no voting rights.

Yes, absolutely. Both GOOGL and GOOG shares represent the same economic interest in Alphabet Inc. This means they receive the same treatment in terms of stock splits,dividends, and reflect the same underlying value of the company’s performance.

For most individual retail investors, the practical impact of their vote is minimal. Alphabet’s founders, through their Class B shares, maintain a controlling majority of the voting power. While you technically have a vote with GOOGL, it’s unlikely to sway major corporate decisions.

Generally, the prices of GOOGL and GOOG track each other very closely due to market arbitrage. There can be minor, temporary discrepancies, with GOOGL sometimes trading at a slight premium due to its voting rights, or GOOG at a slight discount. However, these differences are usually negligible for long-term investors.

For most individual investors, the choice is largely a matter of personal preference. If you prioritize pure economic exposure to Alphabet’s growth and don’t care about theoretical voting rights, GOOG is a straightforward choice. If you prefer to have the technical right to vote, even if its impact is minimal, then GOOGL is suitable. Economically, they are equivalent.

Yes, you can hold both Class A (GOOGL) and Class C (GOOG) shares in your portfolio. Many investors do, sometimes as a result of the 2014 stock split or through separate purchases.

Historically, Alphabet has not paid regular cash dividends, preferring to reinvest its earnings back into the business for growth and innovation. However, in June 2024, Alphabet announced its first-ever quarterly cash dividend of $0.20 per share, payable to holders of Class A, B, and C shares. This indicates a potential shift, but their primary strategy remains reinvestment.