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Google Tries To Silence IPO Rumours
egoff writes "Google has put off an IPO for now, saying "Thus far, laziness has always won out. There are so many better things to do." The New York Post suggests that Google's focus on R&D doesn't really mesh with the financial accountability of a publicly traded company. However, many analysts believe a successfully Google IPO could rejuvenate Internet-company investments."
I think a lot of techies would jump at the chance to buy google stock. However, there's a lot to be said for the freedom that being private gives them. I'd hate to see google turn into a big Evil corporation...
BTW, I think I'm fp.
I did not design this game/I did not name the stakes/I just happen to like apples/And I am not afraid of snakes-AniD
However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments
And an unsuccessful Google IPO could make things worse.
With the war and the volitality of the market right now, I say "Stay Lazy for a While Longer, Google!"
Good quote, too many chars. Seriously, the slashdot 120 char limit sucks!
Google, amazon.com and pets.com, do something VERY well. Google does searching, amazon.com and pets.com sold pet stuff. One out of the two sales sites survived. Google doesn't have much in the way of multiple forms of revenue. They have a search appliance, yahoo-like searech contracts and ad services and possibly other minor services.
If inktomi comes around and does something better than google, google will turn over and die unless it can one-up inktomi.
Amazon survives because it sells physical things, and not services (contracts/licenses). It's also the bigger sales company. If you dont' buy a segway, it won't go out of biz. If you don't by electronics, it has other revenues in other areas of merchandise.
Google NOT IPO'ing has its strengths. No investors to try and please. Being public means you are even more watched than ever, since you now have shareholders. If one scandle comes about, GOGL (google) could tank.
Sometimes, it's easier to be a humble celebrity than a flashy one.
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ping -f 255.255.255.255 # if only
Is there any truth to the persistent rumor that Google is going to switch to FreeBSD at their biggest customer's (Yahoo) insistence?
Remember those days when IBM and Cisco were selling at the IPO, where one little piece of paper like that would return you millions of dollars in your later years if you would have just bought it? WELL I DON'T! I'm only 20 for CwbyNeal's sake! Now-a-days you have penny stocks from companies that crumble like flies! Forgive me, I hear the calls of the bears in the horizon....
Seriously though, companies like Google are such amazing innovations that it's hard not to want just a small piece of it, yet at the same time there is so much corporate internet garbage flooding Wall St. that it makes you think twice.
Business \Busi"ness\, n.;
A scam in which all people involved perceive as beneficial...
It'd be interesting to see if going public brings Google Censorship to a shareholder vote...
Have you seen my stapler?
I, for one, have believed Google will be going IPO for several months, between overzealous aggression against similiar domain names, patenting their search algorhythm, and other odd actions, I just don't know what to think anymore :( ... Good bye the Google we all used to love...
In the latest chapter of Google protecting their trademark, they even asked the dictionary folks at Wordspy to change their definition of the word "google" to prevent it from becoming a generic word. All this has caused mixed reactions and lots of news coverage by microdocs (formerly Google Village), Search Engine Watch, and Internet.com. Their latest target seems to be the Google Web APIs-based automated search service Googlert, who changed their name to "Google Alert" and explain that they were asked "politely" and have been "sympathetic" to Google's concerns. All this recent activity might be in the spirit of shoring up the Google brand and business image before an IPO...
They don't want to go public because they don't have to, period. Their venture funding still has miles to go.
What does Google really sell?
Answers:
1. Intranet search appliances
2. Search hosting solutions
To be a successful publicly traded company, Google would need to sustain year-to-year growth, year after year, etc, etc. They are not selling the kinds of things which support that goal.
Personally I would keep Google privately held. What are they going to do with more capital, anyways?
MORTAR COMBAT!
An analyst's job is to read into statistics. With that, I'd like to mention the following:
Also, analysts get paid to comment on things - mostly things people WANT to hear. Therefore I'm not surprised by the statement.
The only reason I pay attention to analysts is because I know that many other people do. Since most markets are trust-driven (ie. many trust the Yen less than the Dollar, so the Dollar goes up), popular opinion is VERY important. Then again, wrt finance, I seem to also say, "Thus far, laziness has always won out. There are so many better things to do."
This is not my sig.
I know it's stupid and naive, but maybe they learned something from the 90s and are happy with Google being quietly and consistently making them money directly, rather than making a bunch of short term profits in an IPO then tanking and the massive geek userbase flees for the first google clone to come along?
Besides R&D costs and the market's focus on short term results, Google needs to remain private to retain its very employee-focused culture. See this long list of benefits for employees. Very impressive, but not costs that Wall Street analysts would have much patience for.
In a strong market, employees will see more potential upside to their stock, and will be willing to trade a great culture for riches. But today, Googlers are happy with a job, ecstatic with the free meals, and are willing to bank on the currency being valuable (maybe even worth more) later.
The main one is to raise capital, e.g., for expansion. Since the company is profitable, and seems to have most of its infrastructure built, this does not seem to be a pressing need, unless they wanted to implement some major business change.
The other is to gain liquidity for the current stockholders such as the founders, initial investors and stockholding employees. The employees' and founders' liquidity interests can be handled with buyback provisions. If there are other investors, it depends whether they are majority or minority and whether there are any specific exit ageements (and the evidence indicates that there arent).
Moreover, there are many risks to the IPO, starting with a failed/undersubscribed offering, and the loss of autonomy.
So, it seems that the comment that "there are so many better things to do" is exactly to the point.
It is too late for Google to be "free" - they are already beholden to the masters of greed... They are not waiting out of goodwill - they are waiting until the pig is ready to be slaughtered.
:-)
I cannot argue with your observations at face value. They are essentially correct. And yet I feel the need to counter your dark outlook. Isn't it funny that these greedy butchers decided to make their fortunes by giving us a really useful, superior, and inoffensive alternative to the other search engines? Maybe "enlightened greed" isn't as bad as it may seem at first glance
A dingo ate my sig...
Whether to IPO or not isn't a simple matter of finding the easiest way to get cash, it's a fundamental restructuring of the finances and culture of a company. For many, an IPO becomes the means to achieve a level of operation that provides greater economies of scale, and helps the company better position themselves in the market. For Google, this may or not make sense, but it's much more than a simple cash-grab...
Stop by my site where I write about ERP systems & more
Yeah... the main thing is that when your shareholders are various company insiders and a few VC's, it's a lot easier to call them up or meet them for a luncheon meeting or whatnot and convince them to take the longer term view. You can't do that when you have thousands of shareholders (many of whom, being on Wall Street, don't actually know the first thing about running a business).