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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.
It had to be done:
Google IPO
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!
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
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
- 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!'
Plus, the sector STILL appears to be overvalued. Amazon and Yahoo! are all still priced at over 80 times 2003 estimated earnings. That needs to come down significantly more before I'd be happy to see it start going up again.
Private companies rule! Stock market pressures have knackered so many decent companies because their focus shifts from TRUE value to PERCEIVED value.
Its the same in politics and war mongering now - better to be SEEN to be doing good than to actually do any good.
Stay private google. Please
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
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 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