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Google IPO - 1st Quarter 03 - forbes.com article
a definite maybe on a Google IPO

 7:43 pm on Dec 31, 2002 (gmt 0)

The search site Google is queued up for a first-quarter IPO off of surprisingly virile numbers--some $300 million in 2002 sales, $100 million in profit.




 9:48 pm on Dec 31, 2002 (gmt 0)
I'm still not convinced this story is for real. Just because the writer went to Stanford doesn't make him an insider. It's east to jump to conclusions based on one writer's commentary.

Here is another writer's commentary that mentions a Google IPO:


 9:57 pm on Dec 31, 2002 (gmt 0)

I don't know why the general feeling is google will change when/if it goes public.


They don't need to change

Not every investor and every board will fail to understand this. Google will make more money if it continues on the path it is on. There is no need to change.

For example:

Google makes more money from text ads than they would from banner ads.
The advertisers get more click throughs from text ads than banner ads.
Users like these better than banners.

So why on earth would they change?!?!?

Certain companies - like martha stewart - don't even need to worry that much about investors makiing changes - they
can't - the original owners maintain a majority stake.

Taking a company public DOES NOT mean the PUBLIC runs your company.


 10:10 pm on Dec 31, 2002 (gmt 0)

Can Google transition to a publicly traded company and still come out the other end as Google?

Look at what has happen to all the other SEs when they went public, the precedence ugly -- AV, Infoseek, Inktomi, Excite, WebCrawler. Will history repeat it self?


 10:19 pm on Dec 31, 2002 (gmt 0)

>>Look at what has happen to all the other SEs when they went public, the precedence ugly -- AV, Infoseek, Inktomi, Excite, WebCrawler. Will history repeat it self?


Like lemmings, they all do it, it is in their DNA.


 10:23 pm on Dec 31, 2002 (gmt 0)

Don't forget Looksmart on that list.

Can't leave out the best example.


 11:09 pm on Dec 31, 2002 (gmt 0)

Well if I get the chance I'll take a chance, and I hope all you naysayers help to keep the price down!


 11:20 pm on Dec 31, 2002 (gmt 0)

Well, this was only inevitable, since the Google VC's Kleiner Perkins and Sequoia have to recoup their investment, after all they have limited partners in their respective funds to answer to so I imagine that the pressure is on to provide an exit strategy due to the lackluster performance of the majority of VC funds over the past 2 years.

Having raised venture capital before I know that the VC's and investors do not merely want to recoup their investment but rather to recoup at least a 10x return or something to the tune of in excess of $350 MM. Google raised $25 MM in their first round of funding (after a small seed round by a Stanford investor) and subsequently raised $10MM from Yahoo!.

Don't underestimate what the power of a publicly held company can do. Once publicly held, Google will be able to grow exponentially, attract even more spectacular talent and technology because they may now offer stock option packages to incoming employees, establish large credit lines and use their stock for acquisition growth so that they may take on giant competitors.

I've always known this would eventually happen, I'm just happy to see our baby growing up. :)


 11:41 pm on Dec 31, 2002 (gmt 0)

At about the same time the Forbes article was published today, Gartner released a short note about how Yahoo (due to the Inktomi acquisition) could be a SERIOUS challenge to Google.


From the note:
The addition of Inktomi will further enable Yahoo to increase its presence within the microcosm of Internet search advertising, where Google exercises an outsized influence. Gartner believes that Yahoo will use the integrated technology to offer richer advertising opportunities more business-oriented than technically driven. (For example, Inktomi's business of allowing sites to set a "spiderable" section of their sites for a fee will likely appeal to Yahoo.)


 11:45 pm on Dec 31, 2002 (gmt 0)
7. Pre-IPO stock options

#7 from the "Reasons to Work at Google" on http://www.google.com/jobs/index.html


 11:48 pm on Dec 31, 2002 (gmt 0)

I have been a "proud" member of this forum for a long time and the whole time I've been a member, most of the stuff I hear from you all is cring about google. Stop it. Google has served of very well for the passed YEARS and will keep doing so for years to come. This is a company who got it from the start, keep it through the turn, and is now coming down the back streach with a 10 lenth lead on a fast track. If you don't trust google to do the right things to stay in the game, at the head of the pack then you give it a go.

Change happens all the time, the key is to roll "with" the punches(not get decked by them). The number one thing that you "don't" have to worry about with google is that they will crash and born becouse of "greed". They know that turning there website into a prostution house for big business will kill them off "sooner", rather then later and those stanford guy's(and girls) are wwwwwwwaaaaaaaaaaaaay to smart for that.

One last thing, when they come up with some new ways to make money from as webmasters, don't cry about, just pay up are stay home(mosted of you paid to get screwd by yehoo) and they are not anyway near the search engine google is. Just remember 2 thing. 1 google hasn't make all the dumb mistake that "most" of the other internet company's have before them(maybe thats why there still hear?:) and 2. THIS IS THE INTERNET, THINGS CHANGE, fit in someway or get rolled over like a bug by a truck. Just my 17 cents whorth:).



 11:58 pm on Dec 31, 2002 (gmt 0)

If Yahoo holds 5% of Google, I'll bet they don't play the Ink card in any significant way until after the IPO and they scoop up their money.


 12:08 am on Jan 1, 2003 (gmt 0)

It is possible for a public company to still "get it". Redhat still releases all their code under the GPL, which everyone said they would not be able to do. But that is the only company I can think of off hand.

I personally doubt that they are planning to go IPO just yet, but I will give them the benefit of the doubt if they do. If you do decide to invest, then keep your eye on the turnover. The first sign that something is wrong would be some of their idealistic programmers jumping ship.


 4:43 am on Jan 1, 2003 (gmt 0)

7. Pre-IPO stock options

I think IPO has been the plan all along. I'll buy some when they go public, even if it jumps too high initially.

Even if they crash, the stock price isn't going to reflect any problems any time soon. Google stock will be a pretty safe investment afa dotcom stocks go.



 6:17 am on Jan 1, 2003 (gmt 0)

Here is my 2 cents

Although i'd like to see them stay pre-IPO, there is no reason to suggest that they will head south just because of an IPO.

Presumably many of the key players including the founders will have a huge amount of the stock and still retain a lot of control.

Companies head south because of short sighted bad management - not because of IPO's.

Google is already making a good return - the core formula is clear - if they kill the core then they have nothing to hang their revenue making processes on. Why kill a winning formula.

This business is volotile - any fast u-turn type moves in approach can easily lead to having nothing very quickly

Of course non of the above means that Google won't head south. Google will change after an IPO because the top line goals will change - but it will not happen over night.


 6:22 am on Jan 1, 2003 (gmt 0)

7. Pre-IPO stock options

I used the Wayback Machine. This has been on their site for at least 2 years...so this is nothing new.

All we have is one commentary and some two-year old text.
I wouldn't start freeing up funds to buy stock just yet. ;)


 6:49 am on Jan 1, 2003 (gmt 0)

Personally I would like to see an IPO sooner rather than later. This amount of power held by a private company is not good for anyone in the broader picture.

A fact Yahoo and MS must have seen.

Having said that I personally don't think an IPO is on the cards in the next 3 months. Certainly if I was calling the shots at Google I wouldn't want to do an IPO just yet.

I would probably wait until early 1994. I understand the VC's want their money back several times over, but that is a foregone conclusion under any circumstances.

I don't see the VC's having a great deal of leverage right now, they could be replaced easily with people with a longer investment perspective if they get "itchy".

I personally hope Google makes a mistake and IPO's before August 2003, but I somehow doubt it!


 7:47 am on Jan 1, 2003 (gmt 0)

i would question whether the commercialization of results and lowered search market share for the search companies quoted earlier can be attributed to their going IPO solely or even significantly. More likely was that their services were based on conservative old media strategies, and the belief that the only way to make money out of search was to insert paid ads withing their database itself and in some cases, to over-portalise and over diversify.

Google's strategy was initially seen as naive. "How can they make money off their index without monetizing it?" In fact, Google's strategy was more sound, based as it was on a better undertstanding of how the Web works and the search consumer. A pure information-loyal index, which could sell off the side, on the top, by licensing, boxes, and some of the further search-based add ons developed by R&D will take off as revenue generators themselves in furture.

People ARE increasingly willing to pay for information, or be exposed to modest highly related ads on the side, as long as the key product is of the highest quality.

The other search companies did not have the foresight and opted for old media publishing strategies. IMHO, their loss of market share has less to do with moving to a IPO, and more to do with the quality of their service/product. Google really did come from left field.

To me the key survival question post IPO, is whether the public owners know more about new media and the Internet than old media, and trust their board to continue what Google is doing now - making reaosnable money now and continual innovation based on knowledge of the Web itself and the consumer.


 2:41 pm on Jan 1, 2003 (gmt 0)

I'll definitely buy some. That way, you get invited to the stock holders meetings to catch up on all the really juicy dirt ;-) I just hope it doesn't start out at something insane.

It's weird to think of it this way, but a Google ipo could concievably pull the market out of its 2year funk.

I've tried to get ahold of someone at Forbes to see if he was just blue sky dreaming, or knows something. I can't help but think, that if they knew something, it would be front page news at Forbes. The net is primed for a feel good story.


 2:54 pm on Jan 1, 2003 (gmt 0)

I suspect the stock will pop at the opening as a real deal net stock has been hard to find. There may be a peak and fall off just like to old days of internet IPO's. I hope that there are no secret deals for IPO shares requiring the brokerages promised IPO shares to purchase more shares at the opening. I understand that this type of manipulation caused the IPO's to pop way beyond reality.

In any event, I think a strong IPO would be good for the economy and put a little faith back into the market.

It would probably be best to set aside a little each month and dollar cost average this stock to eliminate some of the speculative risks involved.


 5:12 pm on Jan 1, 2003 (gmt 0)

Forbes reconfirms that they have info that a google ipo is in the pipeline for q1.


 5:31 pm on Jan 1, 2003 (gmt 0)

I'll definitely buy some. That way, you get invited to the stock holders meetings to catch up on all the really juicy dirt ;-)

Brett youve obviously never been to a shareholders meeting. There's a little ritual about accepting the auditors statement. The CEO gets up and says (if the company made money) "We had a very good year" or (if the company lost money) "Despite a challenging evnironment, we had a better year than we could have hoped for." If there are any dissident shareholders, they say something before getting reminded that the rule is they don't get to say anything real. And there's a little more ritual. If your lucky, then there's a snack.


 5:34 pm on Jan 1, 2003 (gmt 0)

>If your lucky, then there's a snack.

That is a reason to buy - imho


 5:36 pm on Jan 1, 2003 (gmt 0)

Like pubconference, the action is at the bar afterwards.


 5:55 pm on Jan 1, 2003 (gmt 0)

I suppose there will be Webmasters buying stock, and then complaining that the company of which a part they "own" has give them a PR0 or a penalty :)

Having shares gives people some real unexpected confidence.

I will stick to investing in their advertising for the moment.


(btw, I am confident this will be 1 of the worlds most highly subscribed issues, with some of the highest EVER prices on opening (if they IPO), looks like LastMinute.com all over again, Joe Public gonna get taken for a ride, Big Time)


 6:11 pm on Jan 1, 2003 (gmt 0)

But then you also get mailed quarterly reports and such and get a cool looking Google stock certificate suitable for framing plus access to shareholders conference calls and things like that... I will definately buy stock and HOLD it.

Happy New Year Everybody!


 6:16 pm on Jan 1, 2003 (gmt 0)

But then you also get mailed quarterly reports and such and get a cool looking Google stock certificate suitable for framing plus access to shareholders conference calls and things like that... I will definately buy stock and HOLD it.

Stick around here long enough, and you actually KNOW what Google are going to do even BEFORE they think about it.



 6:27 pm on Jan 1, 2003 (gmt 0)

Just do not hope that an IPO will make Googleguy even more careful in his postings...

Just hope the initial P/E ratio will be OK and that I will have enough cash set aside...


 7:55 pm on Jan 1, 2003 (gmt 0)

Google has no where near the revenues Karlgaard suggests let alone that sort of profit.

I think Karlgaard had the 1st of January and the 1st of April mixed up.

There is one major danger for Google if they were to IPO....they would need to actually show the markets their accounts.

Fine being a good search engine..its another thing being a corporate citizen answerable to shareholders.


 1:06 am on Jan 2, 2003 (gmt 0)

Great, another company sells out to the Greed Market and loses its soul..

You realize Google, that once you do this generating profit will eventually become the ONLY objective, not just the main objective. It is inevitable under our system. Look at Disney.


 1:45 am on Jan 2, 2003 (gmt 0)

After meeting a lot of the fine folks at Google I would hardly classify them as the greedy type. They have shown us to be a fair and impartial search engine with a lot of good will.

I truly believe their intentions lie in creating a bigger and better experience for the world and for that you need fuel and the fuel is cash which can be readily obtained by tapping the public markets.


 1:51 am on Jan 2, 2003 (gmt 0)

Google has the money river all lined up and ready to turn on the tap. Paid inclusion, higher ppc prices, commercial search services, custom data feed services, portal services - they can take 25-35% of yahoo's daily users in a matter of months.

It just depends if Google turns on some of these revenue streams before or after an IPO. If they do it before to jack up the initial offering price, it might be a bad buy. However, long term, only amazon shows so much promise.

These guys haven't been setting around the plex waxing philosophic about a shopping engine for 3 years. They've got stuff setup and ready to roll that we've not heard of yet. There are more ways for Google to make money this year, than any other major site.

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