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Google Cancels Spring IPO
securitas writes "Google fans and potential investors will be disappointed to learn that they must wait a while longer before they can own a piece of Google. The Times of London's James Doran reports that Google's IPO plans are on hold. CEO Eric Schmidt appears to think that market conditions are not right. When pressed for details about the delayed IPO, Schmidt said, "An IPO is not on my agenda right now." A commentary about the delayed Google IPO follows. Mirror at Australian IT."
Analysts estimate, however, that Google's annual revenue is between $500 million and $1 billion, with profits between $150 million and $300 million.
Wow, where do they get that kind of money? Surely not the ads..
...and their IPO has been a lot of speculation from the start, and wasn't ever "official".
While there have been some hints, it has largely been hype that is responsible for people thinking that Google would have an IPO.
Furthermore, it seems that it would be a smart move for Google to capitalise on this, and have their CEO say that an IPO wasn't even on his agenda. That would make people want it all the more, so it's a smart move that they've done that! Using the hype to their advantage without committing to anything... very shrewd.
libertarianswag.com
I wonder what exactly the "right" conditions might be? The market seems to be picking up, so does someone have insight into what we should be waiting for? Someone out there must have their finger on the pulse of good information . . . .
StyleChief
Strange women lying in ponds distributing swords is no basis for a system of government! -M. Python
Going public is a major change for a company and while it can bring in a great deal of cash to work with, it also creates a new layer of accountability as well as more strict and public operations. It's not always in a company's best interest to go public and I question if it's in Google's best interest.
From everything I've seen of google, financials don't appear to be their weakness (though maybe it is and it's just not visible). So what do they need the cash for? Sure, the directors will make tons of money from doing it, but is it in the best interest of the company? Do they have acquisitions they want/need to make?
Frankly, Google has done quite well as a private company and I have some concerns about what may happen if they go public. As an example, there are some people that claim Google has unfairly ranked them and have sued. Google is, in many ways, a monopoly in the search business. Were they to go public, these kinds of suits might get further in court as Google would likely be under more scrutiny regarding this. I think Google does a good job of modifying page ranks of people trying to trick the system. I'd hate to see them lose that ability.
There are other areas as well where Google being privately held is an advantage. I could certianly be wrong about some of this. I'm not a corporate attorney nor an accountant, but this is my interpretation.
- Microsoft has been making constant noises about their new, upcoming search engine and how great it's going to be, basically doing the full-tilt vaporware thing, almost certainly with the purpose of adding uncertainty to Google's IPO. Microsoft would do something like release, with a huge media blitz, their new search product the day before Google's IPO. Waiting either pushes MS to actually release their product or allows Google, on the not wholly unrealistic possibility that MS drops the subject and then suddenly starts making noises again when Google reschedules their IPO, to accuse MS-Search of being vaporware.
- SCO is being the computer industry loose cannon, until the money from their donation from Microsoft (and, hypothetically, Sun) runs out; they are under no obligation to do anything at all to make more money; and they seem to be desperately, greedily obsessed with doing exactly two things: Hurting linux in any way, public relations or otherwise, and getting press attention. They've been making noises about suing Google; this is probably because making such noises keeps them in the press and because they know Google's about to IPO so they want to push Google to pay SCO some money so they'll go away and stop making uncertainty. However, it's not inconcievable they may well actually sue Google; their case with IBM may be about to unravel, and if so they need to start up a new lawsuit of some sort to keep up the illusion they have some sort of revenue model; and doing so on a nearly-IPOing Google would greatly help MS, which, how shall I put this, SCO at least seems to feel grateful toward, what with the fact their only documented profit ever happened solely because if MS's donation. SCO's a minor consideration, but still delaying IPO at least gives them time to die or deflates their lawsuit threats.
- The economy is changing, and since the president may well change or nearly change in about six months it may be set to change a lot more in a very unpredictable and drastic way. This is a big deal. IPOs are of much less good if the economy changes drastically shortly afterward. (Can you say "Andover"?)
I'm sure you can think of more reasons if you think about it..
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Irritable, left-wing and possibly humorous bumper stickers and t-shirts
...might wonder whether Google is afraid of IPOing because of the level of detail about their business operations and technology that they would have to reveal.
There has been speculation about the Internet search engine's ability to scale, or the lack thereof. Filing for an IPO forces any company to come clean about the potential shortcomings or problems that it faces. Not always nice.
Probably nothing of the kind, but worth keeping at the back of your mind.
I wonder has this anything to do with the rumours recently about SCO targetting Google?
In the midst of an IPO, impending court action would cause the price of stock to plummet. I'm guessing Google are holding out until this whole SCO debacle has been laid to rest.
Once Google goes public, expect greedy investors to destroy the things we like about it.
I predict the technical side of Google will be outsourced to India within two years of it's IPO.
Go ahead and waste your mod points silencing this post. It's not a troll, but happens to be what I think.
sPh
Before I knew about Google I was using Altavista. In the beginning they had a simple search interface, similar to how google is setup now. Basically it got the job done. After a while they started to get more widely known and started adding ad's to the front page and basically changing their mode of operation. People switched to google.
I see the same possibility occurring. If google goes down the same trampled path that Altavista went, then a lot of people will be moving on to find another search engine with a clean interface that simply does the job.
Google: Thats what we want. When we go to a search engine we want to search. We don't want links to buy garden tools when we are searching for benchmarks, or links to tech consultants when we are searching for a definition for an error message. Just a search. It's not broken the way it is.
Whee signature.
Could the cooling-off period limit their ability to respond to Microsoft's publicity machine during a potentially critical time?
When Netscape went public, everybody knew it was a hot stock. It was offered at $16 and quickly went to $70 (sorry, these figures are from my head, so propably a bit inaccurate). However Joe Public had no chance to buy the stock at $16. Only the people on the inside (big stockbroking companies, etc.) had a chance to buy at the initial price. By the time, normal private investors got in, the stock had already gone up to $50.
Still cant understand the reasons why Google would float. They already have 90% market share, that doesnt look like it will change.. Not sure the figure but there must be allot of people out there who think of Google when they hear the word "internet".. They dont sell a tangible product so they cant buy more stock of it.. So what is it??? Prestige of being a public company??? If so weve seen this formula is fundamentally flawed.. no-one will forget the dotcom crash or is it a case of survive an IPO increase you share price and THEN youve made it?? its almoast egotistical.
serenity now!
Just a thought.
sPh
There will never be a better time for Google to go public. SCO and MS FUD are minor blips. Google are in their honeymoon period. All those articles about how there's never been another company like Google and isn't it great they have a cook will turn, like they did for Netscape before them. The fake economic recovery will end, interest rates will rise and the hype will cool. People (Not ma and pa, but the fund managers who matter) will realize that Google can never live up to the expectations they've set for themselves.
Don't get me wrong, Google will still go public and still make a ton of money, but there will be the inevitable "didn't match the hype" and "running a 1200 person company is a lot harder than running a 300 person company isn't it?" type articles. What Google does _is_ hard, but just like MS or IBM before them, they forget that they don't have all the smart people and that brains aren't the only things that matter.
It's a very good point. Sometimes companies fall into harder times trying to play to their investors, such as when the Virgin Group went public they were constrained so much they eventually bought back all the stock they sold. Branson (Virgin's Chairman) talks about how they had to consult the board to authorize the signing of UB40 and since board meetings happened infrequently they could have lost the band to another record label. (For more info on Virgin's time as a public company look at Brnason's book Loosing My Virginity.)
Personally I applaud Google for not going public. I hope it turns out to be the correct move in the long run.
I predict a decline for Google and all other centralised search engines with the ascent of P2P anonymous network dedicated to indexing and search services. It's only a matter of time when someone will get an idea. Bye bye, Big Brother.
So, I would not invest a single eurocent not only to Google, nor to any other search portal.
There you are, staring at me again.
What makes Oracle think they can still take over peoplesoft? Clearly PeopleSoft has no desire to be aquired - however Ellison would appear to be insistent on owning them. There are more ways to aquire a company than through a purchase of stock on an exchange. I didn't mean to imply that just buying all of their stock on the market would imply that they would "own" google. There would clearly be a majoity held by the principal of Google itself. However, by owning stock in Google Microisoft could start to guide it's direction and eventually set the company up for an aquisition.
If/when Google float, there will be considerable pressure to recruit an alternative Chairman/CEO, obviously Dr Schmidt will take one position but who for the other?? perhaps this is a factor in their decision to delay the IPO.
serenity now!
Schmidt needs to IPO NOW, this market is already moving into selloff range. Sentiment has changed now that everyone knows the Fed will raise rates in 2004 and the evacuation from stocks has begun.
Whereas if he gives you stock options, and they vest to your advantage, you will be paid by the greater fools who buy the publicly-traded shares. No cash out of the founder's hand. At least until he runs out of privately held shares to give you, which is where Microsoft if headed now...
sPh