I think you are right - google does not have to do an IPO, but they almost certainly will. They have taken lots of steps in that direction - hiring people you don't hire unless you plan to do an IPO.
Plenty of employees and investors would want to make their equity in the company more liquid and being a listed company allows them to do that.
It is fine to have a house and make rental money off it, but investors (I mean the ones already there) - want to be able to sell a house when they want to buy a different one or need the cash - or think the house is overvalued.
I think they've been dishing out pre-IPO stock options as part of their package; so they're more or less obliged to at some point (I suppose there's nothing stopping them making an offer to their employees to buy back the options for a handsome sum, but that could get ugly).
I suspect the hype is something that troubles Google also, never mind you and me. The tech. media are going to absolutely bananas over this; creating an environment of expectation and volatility that no company would wish to go public into.
It's not exactly a "given" that google could do a successful IPO, when a company goes public it is not based on what they have, but where they are going.
We know that google has a terrific business but the question that the analyst/investor community is perenially asking is this:
How much growth is in this thing?
When you already have 80% market share, growth potential is a bit slim.
|When you already have 80% market share, growth potential is a bit slim. |
Is not how much bigger your slice of the pie can get to be..... is how much bigger the pie itself can grow.
Companies go public because it gives them far more access to funding. Plus venture capitalists who provided initial funding want to see a nice big return on their investment and will push these companies to go public. That way they can sell their shares gotten dirt cheap at nice elevated prices. It will probably also turn many employees into instant millionaires.
The most common reason a company delays an IPO is because of market conditions. It's not wise to go public when the market is crappy. During the last bull, IPOs were pumped out left and right most of which were not anywhere near stable companies. During bear markets, the number drops significantly and many can die a fast death. Delaying an IPO is actually a good sign that they are healthy enough to wait until the market conditions turn around again.
BlueSky, I see your viewpoint I think. But what I am saying is that the need to go "public" and have dollars invested in you, "(the company with the innovative idea)" is becoming passť in my opinion. I am sure there are some fine capitalist who would not mind agreeing with me.
I know what I am suggesting is not mainstream. In three hundred years companies bought by the public made up in the mind of some. Will be remembered by none.
tgiww (thank god it is webmasterword)
Companies go public to realize profits for the investors. In Google's case when Kleiner Perkins Caufield and Byers, Sequoia Capital, Andy Bechtolsheim and the other original investors decide it is a good time to cash in - they will. End of story.
To raise the $ they will need to continue to compete with the heavy weights, they will go public. Like it or not, it's going to happen.
|Is not how much bigger your slice of the pie can get to be..... is how much bigger the pie itself can grow. |
Recently, the company stuck their big googly fingers in the overall online advertising market. Judging from the Google Boxes I see all over the place, in a short time, they have managed to snag a sizeable chunk of the online ad business.
|When you already have 80% market share, growth potential is a bit slim |
This maybe true in the PPC market but they are sitting ontop of potential goldmines like Adsense ,Froogle and recently Local Search ... So real growth oppurtunities are there , question is how far they will suceed in those areas