Google Chooses An Underwriter For Upcoming IPO

PenguinSix writes "Bloomberg and a bunch of others are reporting that Google has hired Morgan Stanley and Goldman Sachs Group Inc. to arrange its initial public offering. This follows literally years of rumors and stories about a Google IPO. About a third of Mountain View, California-based Google may be sold in the IPO, giving the company a market value of about $12 billion, the bankers said." Google has become so invaluable to many people (like me) that they could probably raise just as much money with a blackmail scheme.

Comments

Now all they need to do

[Anonymous Coward]

is weed out the search engine spam links, and we'll be set.

Of course, IPOs have destroyed more companies than helped, in terms of the customer experience, so I'm not counting on it.

say good bye

[GoatPigSheep]

Google will cease to be of any use once they have to satisfy a bunch of share-holder's demands.

Guesse it's time to find a new search engine

Re:say good bye

[Coryoth]

Google will cease to be of any use once they have to satisfy a bunch of share-holder's demands.


They are only selling 1/3 of the stock, which means they will be maintianing full control themselves. I think we have much more to worry about from all the people trying to spam googles page ranking system. And even then, they seem to be making some progress with that.

Jedidiah.

Re:say good bye

[Tackhead]

> Google will cease to be of any use once they have to satisfy a bunch of share-holder's demands.

Only a third of the company is being sold. The principals who made Google what it is will retain a controlling interest.

And since they'll have enough money to buy anything they could ever want for the rest of their lives, up to and including sending a probe to Mars, so long as they retain a controlling interest, it's highly unlikely that any price will cause them to fuck up the wonderful thing that is Google.

The management of Google is responsible for seeing to the best interests of Google's shareholders. So long as that team holds 51% of the shares, the interests of Google's geeky management are the interests of the shareholders.

It's called shareholder democracy. You vote what you own. If the thousands of fund managers and people who buy stock in the market (who will, collectively, own 33% of the company) try to change the direction of Google against the wishes of the few dozen founders and managers (who own the remaining 66% of the company), the owners of the company can tell the fund managers to go straight to hell, and there ain't a damn thing the fund managers can do about it.

It's strongly rumored that Microsoft made a buyout offer to Google, and was turned down. The founders of Google aren't in it for the $12B because there's not much that Google does that requires $12B of paid-in capital. They're going IPO to make sure they, and those who helped build the company with them, get a good payday out of it. They built something wonderful, and they're now being rewarded for their efforts, and they're doing so without compromising a damn thing. To all three of those things, I say more power to 'em.

Re:say good bye

[yourmom16]

That's not spam, it's perfectly relevant to the search.

Wonderful.

[vegetablespork]

Now they'll have to "monetize" the search service. Then the pay for ranking results move up and webmasters start blocking the crawler because they charge. And it goes to shit.

Re:Wonderful.

[Coryoth]

Now they'll have to "monetize" the search service. Then the pay for ranking results move up and webmasters start blocking the crawler because they charge. And it goes to shit.

I gather Google does quite well with it's present money making schemes: text ads, and licensing the search technology. They aren't exactly printing money, but they are comfortably in the black from what I hear. As long as it only stays at 1/3 of stock sold and the current people remain in control, I very much doubt Google will have to monetize anything.

Jedidiah

Re:Wonderful.

[jrockway]

Before you know it, they're going to sell ads at the top of the page that come up when you type keywords. Then they're going to add some to the side of the results pages! Then everyone will stop using google because it sucks so much.

Oh wait. They did that, and it works wonderfully. Google is already profitable. They don't need to (and won't) screw themselves with fake results (*) :)

(*) Actually sometimes the results are pretty bad because of annoying people link-spamming things. Like getting Bush's Bio to be the #1 result for miserable failure. Not that I like Bush or anything, but they should have made an I'm feeling lucky search of "George W Bush" go to this site instead. (SAFE FOR WORK, heh)

Please stay private...

[GuyMannDude]

Is there anyone else here who is thinking that having such an invaluable internet tool now subject to the whims of public investors is not such a great thing? I would have rathered that Google stay private forever. That way they can make decisions based on what they think is best, not what will increase their stock price the most next quarter.

GMD

Probably a solid investment

[Wingchild]

While it's been our experience that a lot of tech companies run IPOs for fast cash and then wind up dying shortly afterwards (think of the dot-com bubble bursting), Google is more like investing in your infrastructure; it's an invaluable tool used by a huge segment of the net-aware population, and thus is probably a very safe bet.

For contrast, you can ask yourself how badly those investments in Yahoo! turned out, years after they started themselves as a category-based alternative to the search engines available in the mid-90s.

Who knows..

[phaetonic]

For those who remember how crazy the IPO prices were back in the dot come era, do you think google's IPO will be as crazy as, lets say, RedHat? I can't even recall the last IPO I've heard about.

Re:Blackmail.. maybe worse...

[gantrep]

How is it "insightful" to totally ruin the joke by making it painfully obvious what he was referring to?

Re:This is going to get ugly.

[geogeek6_7]

That guy's site was unpopular, and now he is mad about it. Most of it can be attributed to his whiny attitude and immature approach to life. Google requires your site to gain popularity through channels other than itself.

Dammit Google, I love you

[eclectro]

Dear Google,

I have been seriously evaluating our relationship, and I've concluded you are not offering me what I need to be happy. I feel it is time for me to move on.

Yes, I know it's hard. We did have some good times together. Remember those times when you had "beta" in your name? Then came the time you bought and saved the Dejanews archive. I will always admire you for that. Then there was the time you added News search and Froogle. And all those times that you put those funny little cartoons in your name on holidays and on the birthdays of famous artists? Ahh, those were the days.

But those days are gone. Lately, you have been neglecting my needs as more and more results are being skewed by "link farming."

Then your eyes started to wander, and you started to pursue this illicit "shareholder love." You were wooed by this new lover that had a big wad of cash in his pocket.

Dear, no person can serve two masters: for either he will hate the one, and love the other, or else he will hold to the one, and despise the other. There are just too many search engines piled on the heap who whore out search results to the highest bidder. They think that they will never be caught, but eventually they are always found out.

You are just scaring me too much for me to take it anymore. I think it's best for both of us to find some therapy and move on.

Love,

eclectro

$12 billion?

[nuggz]

Uhh what makes google worth $12 billion dollars?
Unless they have hundreds of millions in profit, you're better off buying a bond.
I don't get why it makes sense to buy google.

Blackmail unnecessary

[lurker412]

I don't know about you, but I would certainly pony up 10 bucks a month if Google switched to a subscription model. For me, it is the most useful site on the Web. I sure hope the new corporate overlords don't screw it up.

Re:They're only selling 1/3

[GuyMannDude]

They're only selling a third of the company.

The current owners will have absolute control, and won't have to follow the whims of anyone else.

That only works if the current owners always vote together as one entity. I doubt there is company that has ever put up more than 49% of their stock in an IPO. They always figure that they have 'absolute control'. But things never stay that way indefinitely.

Going public basically takes power out of the hands of employees and private investors, who probably care about the long-term health of a company, and puts it in the hands of the public (including market timers and mutual fund managers) who may not care what the hell happens to the stock price two quarters into the future.

GMD

Re:I think I'll buy some

[Monkelectric]

I really wouldn't buy GOOGLE stock. Aren't their profits reported to be somewhere in the 200 million dollar a year range? A 12 Billion dollar IPO is designed to do one thing: allow those who issue themselves the stock before hand to become wealthy.

This is another netscape boys, and a sign that the powers that be have decided to cash out on google.

Google is slipping

[bigberk]

I hope these problems I've seen recently are just temporary, but Google (or at least, google.ca) is having problems. A friend of mine noticed this too and in fact we were discussing this earlier. These can be show-stoppers, so they'd better iron it out before IPO:

• The search engine stalls and introduces delays longer than any I've experienced in the past
• There is more and more garbage in the index. In particular, sites that appear to have figured out the google algorithm and are using sites with similar content and mutual links to rank higher
• Sometimes, pages I know are there appear to be dropping into blackholes. As in, they disappear and there are no search results -- but a few hours later, there are thousands of results

Re:Stupid move

[zcat_NZ]

Google has already lots their edge.

Despite the much-touted 'pagerank', they've had real problems with people making linkfarms and even more trouble with blogger googlebombing.

Trying to combat this has resulted in glitches where thousands of perfectly good results vanish on some queries. But they won't take the (quite obvious IMHO) step of providing a blog-related filter, which would surely be easier to impliment than their existing adult-content filter.

They haven't updated google images for well over a year.

They used to source google diretory from dmoz, but they haven't synced them for close to a year.

They're still far ahead of most other search engines, but nowhere near as good as they used to be :(

Re:Now all we have to do...

[dnoyeb]

Regular mortals will be in on the IPO. Somebody has to pay for the fall.

Re:They're only selling 1/3

[nelsonal]

If you want to retain ownership, but still raise capital you can always keep super voting stock. Ford, Comcast, Liberty Media, Viacom, and a whole host of other companies maintain very tiny holdings of the public stock, but will remain family owned basically forever.

Re:They're only selling 1/3

[bareminimum]

Until the current owners start selling shares or end up fighting with each other and a few of them use the public's 33% to get control.

In the long run, it will only require 25% of the shares to control a large company like Google. See for yourself how this is done in other big companies.

Don't forget that some of the current owners will want to cash out, and that will make the 33% public shares go even higher.

You guys are SO optimistic it makes me sick.

Google going downhill already

[acomj]

I tried searching for reveiws of some products this holiday season. I have a method of keywords I used to get me past the ads. This used to work great. The google slammers (or whatever they're called now) are getting much much better as a lot of what looked to be reviews were just sites selling. Uggg. Often I would have to go to page 2 and 3 to pick up real review. I ended up using sites recomended by a friend and searched there postings.

I've started looking for/using other engines already. Sometimes when you get too big everyone tries to trick the service into selling.

Like open source preaches options are really important to keep things going.

Why they are going IPO-

[way2trivial]

google was reaching the point where they pretty much had to

http://news.com.com/2100-1030-5119504.html
A private company must report its finances once it has more than 500 common shareholders--or stock-option holders--and $10 million in assets, according to section XII(g) of the Securities and Exchange Act of 1934. That means a private company must file quarterly forms with the Securities and Exchange Commission (SEC) that disclose operating expenses, profits, partnerships, shareholders and many other details--a laborious process that can cost as much as $2 million annually.

Re:1/3rd ownership vs Duties...

[110010001000]

Additionally a lot of pressure will be put on them by their VC's to maximize shareholder returns as soon as possible. I predict once that happens, Google will lose their focus and attempt to get into some business (music, "content" distribution) that they know nothing about.

Re:They might as well...

[evilviper]

What, do you object to the workers owning the means of production?

I think what everyone objects to, is that, once a company is pulicly held, the faceless mass of stock-holders will do damn-well anything to make a penny. So, if clogging Google's pages with billions of ads is shown to be profitable on a chart, then the mass of stockholders will vote to do it.

I dare say, all the best companies are privately held.

Of course, Google is not trading the majority of their stock, so it's entirely likely that the private owners will maintain control, and Google will continue in the same fashion it always has... Of course, that's just the best-case senario.