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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 $300 million.
Wow, where do they get that kind of money? Surely not the ads..
Instead of getting my free advertising stock benefit with google, I think I'll just buy some more Krispy Kreme and get another free box of doughnuts.
/^[A-Z0-9._%+-]+@[A-Z0-9.-]+\.[A-Z]{2,4}$/i
I mean, before the .com boom, companies usually only went public because they needed money to grow. Google seems to sustain a very healthy bottom-line and I think they have yet to figure out what they want to grow into.
Frankly I'm all for them never releasing an IPO. Sure it brings in extra cash in the short term but in the long term, your buisness focus shifts from your product and customers to the whims of your shareholders. One of the primary reasons people use google that I've seen isn't the qualit of searches, it's the lack of abusive adds, and genereal "customer friendly" enviroment that google provides. So the longer they put off selling stock the longer they don't have shareholders breathing down their necks for better profit margins.
This is not a sig
...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 find this good news. The longer that Google's technology interests are held in private hands, rather than the public interest of their stock price, I think the world is a better place. I'll be crying when I see GUGL -1 3/4 running across the bottom of my TV screen.
Th
Look what happened to Yahoo when they went public. An IPO is not a good thing. Letting a bunch of Wall Street financial people have a say in what to do with your tech company is just a bad idea.
slashdot, news for crazed liberal socialist zealots
well if google hasn't gone public yet, can I invest in booble?
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
I am happy to see Google not go on the market. I fear that Microsoft would simply try to buy all of the shares immediately. While google might be worth a few billion, to Microsoft it's worth a lot more, because they need a good piece of search to integrate with Hotmail and their other services... it's worth whatever they're losing!
stuff |
I'm not interested in Google as an investment opportunity; I just want a search engine that doesn't suck. Staying private lets Google concentrate on what they're good at -- making good tools -- and not worry about having Wall Street yahoos questioning every decision they make and penalizing them for long-term strategy over short-term profit.
Why is it that the proponents of "one nation under God" are so eager to get rid of "liberty and justice for all"?
I'm glad they've cancelled. Right now, Google have control over their company, and they seem to be pretty nice guys. After floating the company they can face greater market pressure which could easily spoil it.
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I wonder what exactly the "right" conditions might be?
Not being in SCO's sights, maybe?
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.
People are asking why Google wants/needs to go public.
Here's the deal...private Google stock is held by too many people. They are at the threshold of legally be required to make their books public, and for all intentensive purposes acting like a publically held company.
As long as they will be required to act like a public company, there is a large financial incentive for them to take the next step and trade publically.
Whether they need the money or not...it is knocking on their door (both corp. and personally) asking to be taken. This knocking is (or maybe was) too hard for them to resist.
-Pete
Soccer Goal Plans
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.
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!
Likely, Microsoft's interest in aquiring Google is reason for the IPO delay. Microsoft could easily buy Google out on the open market, by staying private they are a little safer from being aquired in a clandestine fashion.
I used to think that was how it was said for the first 20 years of my life too. Then, Marvel Comics educated me. A sad story.
-Clio
Karma: Bad (mostly from not giving a fuck)
Blog: http://clintjcl.wordpress.com
I remember reading an online article about it. Apparently, it's a real pain in the ass. Basically you have to do the same amount of paperwork as a public company, but without the benefit of the extra money.
I'm not drunk, I just have a speech impediment. And a stomach virus. And an inner ear infection.
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.
The minute they get investors involved, they'll start doing all kinds of stupid stuff to increase their bottom line. They'll end up like Yahoo
Proverbs 21:19
Nope. I'm a huge fan of google, but I'm quite happy at this turn of events. Going public puts pressure on a company to push for maximum short-term profit, and I like google just the way it is. If they needed the money to stay alive then that'd be one thing, but they don't.
- First they ignore you, then they laugh at you, then ???, then profit.
http://www.google.com/technology/pigeonrank.html
I can say no more the links speaks for itself.
Certified Black Helicopter Pilot *** Unwitting Dupe of One World Gov'ment
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!
It's just The Times. It was there long before your upstart colonial New York crap. Get it right!
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.
In their last quarterly conference call, Yahoo CEO announced a move away from Google. The timeline is in the air but the decision is not.
It looks as if MS are shortly going to be along to destroy Google. Past experience shows that whenever MS bundle something with their OS (such as WMP, killing Real, or IE, killing Netscape), the competitor is doomed.
If I were running Google, I'd be thinking of getting out of it right about now and starting something else. Sadly, just like Real, Netscape and others, Google will be quickly decimated by MS once they make their own search tools the default. MS understands human nature well - people generally don't want freedom, they just want safety and the path of least resistance.
Oolite: Elite-like game. For Mac, Linux and Windows
This is the first time we can thank SCO for anything!!!
There are still plenty of other ways to lose your shirt in the stock market.
As several posters have pointed out, the statement that "market conditions are not right for an IPO" is just a smokescreen. As they say, the market conditions are the more favorable now than any time in the last 3 years, and with the Federal Reserve ready to start moving interest rates up after the November election, conditions are not like to get any better.
Google is faced with a few problems, and a challenge:
1. It is being dropped by Yahoo! as a its algorithmic search provider. This will have a minor effect on Google's revenue and profit.
2. MSN is developing its own search engines (for paid advertisements and algorithmic search). While Slashdotters will deride Microsoft's efforts in these areas, it will be additional competition that Google cannot ignore.
3. Out of the three biggest portals (Yahoo!, MSN and AOL), Google is supply advertisements to the least healthy one: AOL.
4. Google realizes that algorithmic search is on the way to becoming a commodity. The difference in quality of the results is becoming minor. There is not a lot of money to be made there because people do not pay much to see or be seen in algorithmic results.
5. The money is in the advertising results that are shown with the algorithmic results. (No, Virginia, there is no Santa Claus, and Google does make most of its money through ads.) There are two ways to get people to see those ads: get them to come directly to your own site, or get those advertisements to the sites that people visit. Most normal people (i.e., not people who read Slashdot) go to portals.
So the challenge for Google is to become a portal. Becoming a portal means offering a lot of services beside "search in a box". It means news, chat rooms, music, games, auctions, free email, the list goes on and on. Google recognizes this. That is why it has added other products, such as news and free email. But building a portal from scratch takes a lot of time and money. If Google were planning to make itself into a portal, it would launch its IPO and use the money to build a portal.
Which brings me to my theory. Some portal is negotiating with Google to buy Google. There are only two portals big enough: AOL and MSN. AOL is a declining portal, but it already has a deal with Google, and terms of that deal apparently include a partial ownership stake in Google if Google goes public. Microsoft has piles of cash, has missed chances to buy an algorithmic search engine in the past, and regrets that failure. It sure would be easier for Microsoft to buy Google than build another Google.
In summary, my theory is that Microsoft is trying to buy Google, and Google is seriously considering accepting the offer. Microsoft wins by getting a terrific search engine and ad machine, and Google wins by getting a lot of money for its employees, a permanent partnership with best available portal, and the opportunity to stay focused on search.
If it happens, the "popping" sound that you will hear all over America will be the heads of Slashdotters exploding when their favorite search engine is owned by their favorite villain.
Maybe they just realized how bad an idea it would be for them to go public. The news articles this week about Microsoft targeting them would have destroyed their stock price. And that's without any failure on their part at all. They would be tried and hanged in the court of public opinion overnight. They'd be left scrambling to boost their public image and they'd be forcibly led off track from making the best search engine in the world.
As it is (as a privately held company) they can take such news as information and plan carefully and intelligently. Sure they're concerned, sure the VC folks are telling them they need to watch out. But it's nothing like watching your company's valuation drop 60% overnight and be left with fear of lawsuits and hostile takeover based on rumors.
Going public is way overrated.
Cheers.