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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."
It's a little sad that this guy thinks the entire sector hinges on this one company. IPOs while all well and good invariably change the nature of the beast which in Googles case would be a sad sad thing. Stay private, make your employees and customers happy and be your own man.
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
It had to be done:
Google IPO
Google shouldn't bother with an IPO unless it becomes really apparent they need one. Money ain't everything, and if the employees are happy with the way things are now, why bother?
Certainly, R&D will suffer if an IPO happens and the focus of the company becomes delivering the almighty dollar to investors. However, if they find their good employees leaving for greener pastures (ie, more money), it might be time for that IPO to raise funds to keep them.
-Erwos
Plausible conjecture should not be misrepresented as proof positive.
This just in: new socks could rejuvenated my sock drawer!
... I think their QoS would go waaay downhill :(
I'd buy a google IPO if I had any money, but
Q:What does the richest private company in the world do?
A: Anything it wants.
When a company seeks a wide consumer base, especially from the financial sector itself, it makes sense to go public. However, when a company is heavy on R&D, needs to be nimble, and supplies directly to other corporations, there is no _need_ to go public.
davejenkins.com |
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!
However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments.
There are more grammatical disagreements in that sentence than I've had good days!
Let me ask one of those laymen/borderline stupid questions that are insightful as long as someone answers it. If google does an IPO and becomes a publically traded company, in time that will make them suck, right? Cause then they'll have to listen to investors? Do companies ever go "we dont care what the investors want. We will do what pleases us, not them."
slashdot: where everyone yells sarcastic metaphors to themselves to understand the issue
A Google IPO is inevitable -- but Sergey Brin (the brains behind the company) is not going to be the one that spearheads an IPO, it'll be Eric Schmidt, former Novell CEO and current Google boss.
Also, in the short run, though Brin says laziness always wins out, in the long run, it's greed that always does the winning.
filmcritic.com - Movie reviews on Internet time
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.
-
ping -f 255.255.255.255 # if only
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...
The statement the NYPost made about investors not being too interested in a pure R&D company is right. Investors want to see their money make money, right now. They don't want to wait 5 or 10 years for possible results (congrats to the 10-second sound bite generation). And even though it's making money now, if it misses the market forecast, the stock tanks.
Here's a really telling part:
"The sector really needs Google to go public," a veteran investment banker said.
It's not those people who want Google to get more funding. It's everyone who lost money in when the Internet stocks collapsed. They're hoping that something like Google will go public, draw money into other Internet-related stocks (halo effect), and then take out their money for less of a loss.
My US$0.02. Google seems to be doing fine without needing to get money from Joe Sixpack.
Don't do it! Google is too good to be public, too innovative to be tied down to corporate short-termism and profit-seeking. Google is too clever, too innovative, too simple, and too sensible to survive the public sphere and its short-term-profit-at-any-cost shit-where-you-eat demands.
Google is better with its current benevolent dictatorship than with a democracy of ignorant stockholders.
That said, if they do IPO, I know I'll be among many others asking, where can I get some?
--G
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...
(slightly off topic)
Isn't the stock market, at least the way it is operated these days, more of a scam than an investment?
Perhaps some business major can explain this to me.
As I see it, here's the problem:
1) I buy x shares of stock in SomeCompany, at some price n.
2) I want to sell this stock at some point in the future for some price y > n.
3) In order for the price of the stock to increase, it must be "worth more".
4) Assuming no further stock is issued and that I purchase no additional stock, that means my stock constitutes a fixed percentage "ownership" in the company.
5) Given that my percentage ownership is fixed, in order for the stock to be worth more at some time in the future, the value (read: size) of the company must grow.
Well, that's fine and dandy for a small company, but that seems to assume that any given company will grow without bounds pretty much forever (especially when we start talking about options)
But the "economy" is a bounded system. Those bounds may be high, but they DO exist. So the fundamental premise of "stock price increases with time" seems fundamentally flawed to me. What do you do with a successful company that produces a flat amount of profit each year, and does not seek to grow?
Now DIVIDENDS, THAT I understand. I own some share q of the company, the company produces w amount of profit, so I'm entitled to a dividend w/q - that makes sense.
But this whole speculation thing I just cannot wrap my head around. It looks like a pyramid scheme (with a gentle slope) to me.
Somebody want to explain?
DG
Want to learn about race cars? Read my Book
However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments.
A little excited about the 'ly' and 'd'?
- 26M Americans visited an online dating site during 12/02
- "Personals Comprise the Largest Paid Content Category on the Internet: According to a [12/02] study...the Personals category grew 387 percent to become the largest online paid content category among consumers in the third quarter of 2002, surpassing Business Content." (source: comScore Media Metrix)
- "'I have 43 employees, and we'll bring in $43 million this year. That's $1 million per employee,' [uDate president Martin] Clifford said. 'We have zero cost of sales within our business...The margins are almost super-margins.'" (source: MSNBC.com)
Google+Blogger is an ideal combination for serving this market.Once Google goes public, here's how I think Go_Ogle will happen:
Soon, Google will improve the searchability of "blogspace" by making it easy for bloggers to annotate their blogs with information about themselves and their blogger friends. This information will be encoded in an RDF dialect called FOAF (Friend of a Friend).
It will then dawn on people that the FOAF file is effectively a static online profile, while the associated blog is akin to a living profile (in the 'living document' sense).
With this, Googling people will come to encompass both researching people you have met -- already a common practice -- and researching people you would like to meet.
The upside potential of this, as introduced above, will prove too substantial for publicly held Google to ignore. (In addition, I believe leadership of the market for online matchmaking software is the gateway to early leadership of the market for lifelong learning and career services, which will be worth hundreds of trillions of dollars in the coming decades. Toward understanding the relationship between the two markets, consider: according to a recent American Demographics survey, couples in the U.S. meet primarily at work (36%) or school (27%). More on 'online dating software -> LLCS' here ).
Google will then acquire the best makers of RDF query tools and launch Go_Ogle, the mother of all online dating sites.
Thoughts?
IPO's are simply a way for the company to raise money, in exchange for (partial) public ownership of the company. The fact that insiders usually get rich in the process is incidental, but Silicon Valley has now been operating for years on the idea that this is how you get paid when you're a rank-n-file employee at a startup.
Microsoft's IPO in 1986 is an interesting case - they were dragged to the IPO kicking & screaming. Think about it - Apple started in 1976 and IPO'ed in 1981 (at the time, one of the most successful IPOs in history). Microsoft started in 1975, and still hadn't IPO'ed by 1986. So what made them do it? Their employees had been using their vested options in lieu of cash when buying houses, cars, etc. For a privately held company, that's completely illegal, and as a result, the SEC forced them to go public. Even at that point, Microsoft didn't need to raise capital publically, BillG and company wanted to retain complete control of the company.
'ARRGH! Pirate Designers of the Internet, we be!'
They don't want to go public because they don't have to, period. Their venture funding still has miles to go.
"Google's focus on R&D doesn't really mesh with the financial accountability of a publicly traded company"
"Modern shareholders are chickenshit squatters who care more about their liqudity of their portfolio then they do about the future of the company or its products."
True innovation and really new developments will always come from small business, where commitee thinking is almost non existant and against the grain geniuses are considered an asset and not dangerous dead wood.
As soon as the head of a company gets his eyes on the prize of some arbitrarily huge number of lucrative options, you can pretty much forget about taking risks. Every company I've worked for that's gone IPO has very suddenly switched into maintenance mode, treading water in a market they were breaking records in with a casual sidestroke. Red tape increases and so does the ratio of useful hours to administrative BS. And strong, brave CEOs easily cave under the heel of a room full of industry delphis with the power to fire indiscriminately.
Product failures mean firings of smart people to appease the same. And there's always the chance that some rogue company with a discordant worldview will take you over, complete with more firings for "redundancy" and to afford bullshit multi million dollar "Good Faith" payments. Can you imagine Google owned by Inktomi...or Slashdot owned by Microsoft?
Google doesn't seem to be struggling. They have the position and the clout to manipulate the fund -- repay -- fund cycle necessary to afford new development. So who cares if you want a framed Google OneShare?
This is better for you. It's better for us. It's better for them. (With all due respect to Cap. K)
Hey freaks: now you're ju
This isn't as much "normalization" as it is "don't take so many drugs when you're designing tables."
However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments.
I think the last 4 years have proved that analysts know shit.
Wacky headlines and sports coverage, however, are their forte.
It is too late for Google to be "free" - they are already beholden to the masters of greed - the Bay Area venture capital industry. Rest assured that Kleiner and Sequoia will put this baby on the market when its ripe. This is what they do. They do not feed the poor or care about your search results. They care about making a lot of cash. They need a Google IPO to rebuild the gutted venture market. They are not waiting out of goodwill - they are waiting until the pig is ready to be slaughtered.
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.
Whether Google goes public or not is less a question of whether it makes sense for them to stay private--clearly staying private has many many benefits strategically (treat employees better, don't have to disclose financials, not beholden to quarterly results), and such a private company could produce enough cash for the founders to live very comfortable lives. The real driver of a push to go public will be the venture capitalists that invested in Google. They have to get their investments liquid so that they can return money to their limited partners. These VCs likely have the voting power and/or legal clauses in their investment documents to force Google to go public, whether the management wants to or not.
--Spooky Action At A Distance
Having worked for both, I agre. Privately held companies are driven by one thing: Generating Profit. Publicly traded companies are driven by something else: Stock Price.
Publicly traded companies change thier focus from development of newer/better/cheaper product or service, to generating press releases showing partnerships with other publicly traded companies that may or may not actually have a worthwhile product/service. Publicly traded companies are just fine with skipping a partnership and announcing layoffs to achieve the same goal.
This seems to be a relatively new function for business, but one that has been true in my experiences. Hats off to Google for fighting the urge to IPO.
Squash
Squash
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.
It's entirely possible that the founders might take on debt and go private. Interest rates are so low right now that's a very real option.
As for "rejuvenating the market", Google just isn't very big. After all, it's almost fully automated.
Any story that quotes a "financial analyst" as an anonymous source is probably bogus. They're not insiders here; they can speak publicly. The ones who like being on Squawk Box are best ignored, of course.
We have years of depression ahead. Years. The market is still way overvalued. P/E ratios are still far too high. See the chart I put on Downside. for July 22, 2002. The bubble still hasn't fully deflated. Stocks have another 40% or so to fall to get back to normal P/E levels.
Look at Japan, where the stock market has been in the tank for a decade now. That's happening to the US. The peak was three years ago, after all.
The vast majority of the Fortune 500 companies were not venture capital financed. Most of them also did not go public at the earliest opportuntity. Quite frankly for a small company, going public is usually more of a distraction than a benefit. The important thing to think about is why would they need the cash from an IPO?
I suspect Google does not need the money from equity financing. If they can fund all their business with cash from their ongoing operations and don't need equity financing for future growth opportunities, why would they want to go public? (other than greed) An IPO would be pretty much a cash grab at this point, not a useful strategy for growing the business.
Google looks like it is a well run company but I don't really think it's clear that its future growth prospects are such that I'd be willing to purchase its stock. No, I think Google would be much better served by keeping their current path and focusing on developing their business. The company clearly has a great product, they have improved it steadily, and have done well by being focused on that. The growth expectations of equity investors could only hurt that focus at this point.
The company I work for went public a couple of years ago. Now it's going down the pan. It's all about projected sales. The sales force are making sales for software that isn't even written yet just so it can get on the balance sheet before the end of April. And some of the "customers" are expecting deliverables as soon as September.
;-)
When it was a private company no-one had to sell anything until it was ready. We went from being R&D led to being sales led. We used to have great products. Now quality is suffering because of the drive to get everything out in time to make those sales figures look good. It can't and won't last. A successful company has been driven into the ground by the money men.
Bob
And no, I can't tell you who I work for
Listen to my latest album here
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.
Then again, many analysts are the same self-serving fucking morons who assisted the Dot-Bomb Economy.
Read the EFF's Fair Use FAQ
Check out Amazon, AOL, and who can forget Dr. Koop.com for examples on why this could be a bad thing.
SecondPageMedia - Wha
"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."
Phrased differently: "The NYP suggests that doing research to make a better product isn't financially sound for a publicly traded company."
Or: "Companies investing in their future are seen as worthless by investors."
Myopic MBAs with their heads in the sand kissing someone's ass are why Bell Labs got gutted. They are why US colleges stamp out more and more lawyers and fewer and fewer engineers. They are why not-CDs exist, why ReplayTV is out of business, and why it's illegal in Michigan to provide internet access to a school lab through a cable modem with 1 IP.
Would you ever hear the following in a boardroom meeting?
"Let's phase out our coal-fired plants and replace them with solar."
"But sir, that would cost $100 billion!"
"Who the fuck cares? We'll spend that in the next 10 years buying coal anyway - might as well buy solar panels instead."
And won't you ever hear that? Back to the chickenshit MBAs. There's an enormous fusion reactor in our backyard that hits us with over 6.5 billion watts of energy per square mile and the MBAs would rather spend endless effort securing regulatory approval for another coal-fired plant or nuclear reactor than spend their money buying up plots of the cheapest land they can find in the middle of sunny Nevada.
I've strayed a bit, so I'll sum up my point here. The same thinking that suggests Google abandon improving their product so they'll make more money is why we still burn things to make steam to run generators, why we have no base on the moon and barely have one in orbit, and why we're willing to spend $200 billion (yup, you heard that right) to bomb the shit out of some poor country unfortunate enough to be situated on top of a sea of hydrocarbon ooze.
*takes breath* *steps off soapbox*
High-speed Road Trip (18.000KPH)