display | more...

Google's IPO


Originally posted as Google's IPO

Founded September 1998 by Sergey Brin and Larry Page, Google is billed as the world's premier search engine. With an index of over 4 billion web pages, their Pagerank algorithm agreed to be the best around, and a brand that is almost unbeatable in the online world, Google's engine is the first choice of most web-searchers. The business model is the envy of most dotcom businesses with revenues exceeding $1 billion, and likely to continue to increase. The current income is almost $1 per share, and with a current tentative stock price set between $100 and $150, it will have one of the best P/E ratio of any dotcom so far.

The company is doing something particularly interesting with their IPO; they are making it public. Anyone who wants, and has a computer to check it out, can go to ipo.google.com, and register to participate in an auction of shares, where all of the shares will be distributed. The price that Google lists as the selling price for the shares is between $108 and $140, but they will base the final price and allocation on some formula they declined to disclose, (and given the fact that they have teams of statisticians working for them, will probably be pretty well thought out).

The only guarantees are that they will sell all the stock they list, about 24 million class A shares, with a total of 34 million shares outstanding, and 230 million class B shares outstanding, not counting about 12 thousand shares available through stock options. The current stockholders will be selling a total of 10 million shares, at a total value of over $1 billion, and the company will be selling an additional 14 million shares, valued at over $1.5 billion, for as-yet undetermined expenses and acquisitions.

Google currently owns Pyra Labs, which runs blogger, and runs gmail, possibly the hottest account online. They bought Dejanews and transformed it into Google Groups, and runs services from Froogle to image searches to a news indexing service. They currently run hundreds of millions (yes, 10^8) of web searches a day.

Sources:
www.google.com
ipo.google.com