Don't search too hard for Google ethics

Some of the biggest US pension funds are calling for shares in Google, the internet search company, to be priced at a 'substantial discount' to reflect the fact that insiders will retain control of the giant organisation when it raises $2.7 billion (£1.58 billion) in a planned share float.

There are substantial corporate governance concerns with the Google float despite all the baloney from its founders about wanting to enrich the world and do no evil.

That may be their ultimate goal. Shorter term though, they want to flog off a slice of Google to catapult themselves into the world's rich lists while keeping a stranglehold on the business. Shares sold to the public will carry one vote, those retained by the founders and members of staff will carry ten.

Google is planning to auction shares direct to individuals. My understanding of an auction is that you bid what you think something is worth.

Now clearly, institutional shareholders are worried that individual investors are such financially illiterate oiks that their bids will make a nonsense of Google's stock market valuation. They will either go crazy and bid way too high, or will put in laughably low offers for stock.

Either way, ordinary punters are unlikely to build in the corporate governance factor. But if corporate governance is such a serious issue that professional investors think it devalues the share price, they should bid low and be prepared to walk away.

If they do not really have that courage and decide to climb on the Google bandwagon because it looks like a born-again dotcom bonanza, they should stop bellyaching and wait for the profits to roll in.

In reality, though, many pension and investment funds are caught in a bind. They are index trackers, which means that if a company falls into a certain category - ie it is big enough, in a certain sector, ethical etc - they are obliged to buy shares to keep their portfolio in line with the overall market.

So even if they are worried that governance concerns will depress the price in the longer term, they will be forced to bid against the oiks and hope for the best.