Barron's: Google Ipo by april **UPDATE**

[Miramonti]

In an article in this week's edition of barrons (saturdays paper edition, no link yet), they predict that an ipo for google is inevitable within the next 6 months.

Reason is that they soon have to start reporting their financial's to the SEC regardless.

A 1934 SEC Act states that public companies that have more than 500 employees (which their site says they have over 1000) and also have more than 500 shareholders of any class of stock (includes stock options) must files their financial statements within 120 days [edit]of the end of the fiscal year [/edit] of exceeding this criteria. Google's site also lists "pre-ipo options" as one of the top 10 reasons to work for google, so 500 is "almost certain".

Given this circumstance, which the ceo has recently acknowledged the responsibilities of this Act, Barrons believes its ripe for an ipo since it must unveil itself anyways (i believe thats their logic).

They estimate google's revenues to be from $700mil-$1bill annually, with profits of $100mil. These numbers plugged into their 'formula' estimates an ipo as much as $14 billion!

Time to start funding those ameritrade accounts that you haven't used for a couple years and left only have $.01 in them to keep 'em open. The second wave of the internet bubble is about to begin!

________________________________________________________________

UPDATE 10/23

Google reportedly exploring IPO

Google Chief Financial Officer George Reyes met with investment bankers last week to test the waters for its initial public offering, according to a report published on the Financial Times Web site. The company could be publicly traded by March 2004, the report said.

 

[Broohaha]

how does google make money, precisely?

 

[Miramonti]

Originally posted by: Broohaha
how does google make money, precisely?

Doesn't matter, its an internet stock!

Google Business Solutions

 

[Miramonti]

guaranteed to hit $100 the first day.

 

[GTaudiophile]

How does one exactly buy stock during an IPO?

 

[rufruf44]

Now that Microsoft is aiming to take them out, they decides to go IPO? Looks like the higher ups decides to get some $$$ before its all gone.

 

[Barnaby W. Füi]

I don't like it. I think being private fits google well.

 

[vi edit]

Originally posted by: BingBongWongFooey
I don't like it. I think being private fits google well.

Indeed. Google seems to march to their own drum, and can thumb their noses at big contracts if they don't like what's being presented.

Go public and you have to answer to investors that really look at nothing than the bottom dollar.

 

[Aharami]

they make a lot of money. i read somewhere that google gets 33% of the daily internet traffic which comes out to something like 130 million hits per day

 

[Miramonti]

Originally posted by: GTaudiophile
How does one exactly buy stock during an IPO?

The underwriter will issue alotments to big players (the night before ipo I think) like investment firms and brokerages. From there those firms will share with their customers. Etrade used to offer ipo's to customers who signed up for them in advance, not sure they still do. Its usually difficult for the little guy to get a piece, especially of any size.

It used to be this method as well as whoever was in bed with the underwriter firm, altho thats a bit more low profile these days.

 

[Barnaby W. Füi]

To give you an idea of how massive google is -

As you might know, google has massive server farms - but not with huge rackmount servers, or mainframes, or anything like that. Their server farms are comprised of mountains of ultra cheap PCs. Well I guess that when one of these things dies, they don't repair it or even turn it off. They don't even go out and try to find it or anything. They just let it sit there, because it would actually cost them more money to pay people to go around and troubleshoot these things. The system has sufficient failsafe mechanisms that it doesn't matter, and when they need to upgrade, they buy a few hundred or few thousand more cheapo PCs.

 

[Miramonti]

Originally posted by: rufruf44
Now that Microsoft is aiming to take them out, they decides to go IPO? Looks like the higher ups decides to get some $$$ before its all gone.

That could definitely affect their decision (if they do) imo. Its one thing to get to the top and another to stay there. Microsoft is probably gunning for some high level google engineers as well.

 

[TubStain]

Originally posted by: jjsole

Originally posted by: rufruf44
Now that Microsoft is aiming to take them out, they decides to go IPO? Looks like the higher ups decides to get some $$$ before its all gone.

That could definitely affect their decision (if they do) imo. Its one thing to get to the top and another to stay there. Microsoft is probably gunning for some high level google engineers as well.

jjsole: trade Siri today? I made a nice killing from Friday to today.

 

[Parrotheader]

I work in the search engine marketing field extensively so it's been VERY cool to watch stuff shaping up for the last 8 months.

Google's grown so huge now that one time partners like Yahoo now see them as a threat rather than as an ally. That's the reason Yahoo has gone out and acquired their own search technology to bring in-house (Inktomi and more recently FAST which they got via their acquisition of Overture; both of these are very strong search engines that have relevancy on par with Google, but get overlooked by all the Google love.) And Microsoft has made it clear they don't intend to stand by and let the search market and advertising dollars pass them by. They will be dumping LookSmart as of Feb 2004 and are currently working on their own in-house search engine which will have a huge advantage by undoubtedly being integrated into future OS versions. I know those of you that use nothing but Google think I'm full of it, but the days of Google having a huge relevancy lead over other major search engines will be long gone (and have actually been for over a year now as studies have shown the pure engine results from players like Inktomi and FAST are on the same level now.)

I think the transition on Yahoo when they dump Google for Inktomi will be rather seamless as most people won't even notice the difference. The two REAL shakeups will come when (and if) Google goes public and when Microsoft unveils what they have. I wouldn't be at ALL surprised to see some 11th hour acquisition of Google by another major player. Yahoo seems like a long shot given their acquisitions of Google competitors (although a great idealistic/stylistic fit IMO; I'd love to see those two merge to face off against Microsoft.) Microsoft has the money to buy anyone they want, but it seems pretty obvious they plan on building something themselves. The overlooked wildcard in all of this is AOL. Next to Yahoo, they are Google's largest search distribution partner and supposedly were quietly given a financial stake in Google as part of their deal. Given their rather substantial resources I wouldn't be at all surprised to see them acquire Google before they reach an IPO.

 

[dman]

Hmmm... just because they have to make their finances public doesn't mean they have to put their stock out there.

OTOH, I'm sure the CEO will want to cash in eventually... and it's doubtful they'll be the leader forever. So, it would make sense to cash out while they are on top.

 

[Miramonti]

Originally posted by: TubStain
jjsole: trade Siri today? I made a nice killing from Friday to today.

excellent, nice position. I haven't traded it myself but if I do and profit from it I guess I owe you a commission now.

 

[Nitemare]

The salvation of the IT industy and IPO's is at hand...

 

[Miramonti]

Originally posted by: Parrotheader
I work in the search engine marketing field extensively so it's been VERY cool to watch stuff shaping up for the last 8 months. Google's grown so huge now that one time partners like Yahoo now see them as a threat rather than as an ally. That's the reason Yahoo has gone out and acquired their own search technology to bring in-house (Inktomi and more recently FAST which they got via their acquisition of Overture; both of these are very strong search engines that have relevancy on par with Google, but get overlooked by all the Google love.) And Microsoft has made it clear they don't intend to stand by and let the search market and advertising dollars pass them by. They will be dumping LookSmart as of Feb 2004 and are currently working on their own in-house search engine which will have a huge advantage by undoubtedly being integrated into future OS versions. I know those of you that use nothing but Google think I'm full of it, but the days of Google having a huge relevancy lead over other major search engines will be long gone (and have actually been for over a year now as studies have shown the pure engine results from players like Inktomi and FAST are on the same level now.) I think the transition on Yahoo when they dump Google for Inktomi will be rather seamless as most people won't even notice the difference. The two REAL shakeups will come when (and if) Google goes public and when Microsoft unveils what they have. I wouldn't be at ALL surprised to see some 11th hour acquisition of Google by another major player. Yahoo seems like a long shot given their acquisitions of Google competitors (although a great idealistic/stylistic fit IMO; I'd love to see those two merge to face off against Microsoft.) Microsoft has the money to buy anyone they want, but it seems pretty obvious they plan on building something themselves. The overlooked wildcard in all of this is AOL. Next to Yahoo, they are Google's largest search distribution partner and supposedly were quietly given a financial stake in Google as part of their deal. Given their rather substantial resources I wouldn't be at all surprised to see them acquire Google before they reach an IPO.

I agree. Google has lots of challenges ahead. Myself I'm tired of using it to look up products and getting so many referral/shopping sites at the top of the list. Its going to be hard for them to stay on top.

A buyout/merger would be interesting. Very expensive and hard to see them interested in integrating their culture with anyone else, but probably inevitable in the future when the gap shrinks between its competitors.

 

[Miramonti]

Originally posted by: dman
Hmmm... just because they have to make their finances public doesn't mean they have to put their stock out there.

This was one of the problems with the article - not a lot of elaboration in the thought process here. I have a ton of respect for the paper tho but would have liked to learn more about pros/cons.

 

[Ausm]

<--- never will invest in a .com stock


Ausm

 

[Parrotheader]

Originally posted by: jjsole

Originally posted by: dman
Hmmm... just because they have to make their finances public doesn't mean they have to put their stock out there.

This was one of the problems with the article - not a lot of elaboration in the thought process here. I have a ton of respect for the paper tho but would have liked to learn more about pros/cons.

I'm not sure of the financial/legal reasons to force them to go public either.

But from a strategic standpoint, if they're wanting to cash in they definitely need to do so sooner rather than later with all the changes about to take place at their competition. The rumor that Google will be going public has been floating around for two years now, but factors outside of Google might be what finally forces the issue.

 

[Miramonti]

^update

The beginning of the end?

 

[Ferocious]

Originally posted by: jjsole
^update

The beginning of the end?

jjsole respondedly correctly.

In a typical situation....you need a good connection and a minimum of $50k to become a player....often much more.

But you'll need to have a damn good connection and probably a lot more money than that to get a piece of the Google IPO action. The average person has no chance. With Google it will be a game for the very well connected and the well-to-do.

 

[alkemyst]

we are a small company and pay $500 per month to google for adwords.