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Google IPO to be Unique
G keeps 'em guessing to the very end
Brett_Tabke




msg:1235438
 12:07 pm on Apr 27, 2004 (gmt 0)

Sounds like we might actually have a shot at buying some stock in this one:

[sfgate.com...]

Google Inc. of Mountain View will structure its
much-anticipated initial public offering of stock in a way that will give an unusually broad range of investors a chance to compete for some of its IPO shares, according to an investment banker familiar with the company's plans.

 

indigojo




msg:1235439
 12:15 pm on Apr 27, 2004 (gmt 0)

Hopefully the breath of fresh air this industry is in long need of!

borisbaloney




msg:1235440
 12:23 pm on Apr 27, 2004 (gmt 0)

Agreed indigojo. In the very least it should be fun to watch the media hype. Maybe the dynamics around here will change as well. We'll have the groups "google is great", "google is broken", and now "google is mine". :)

mfishy




msg:1235441
 12:27 pm on Apr 27, 2004 (gmt 0)

This will surely be a boost to some of the other Internet ad companies that have been battered over the past few years.

zeus




msg:1235442
 12:36 pm on Apr 27, 2004 (gmt 0)

Its said they have to go on the stock market, then it will never be the same search portal we know, it 100% money business, no more playing or experiments it has be 100% sure to bring money. Its the same with music indusry they have gone so much down because of bad music if a artist have a new sound they push that sound on so many records as possible, untill the customers are full.

Google had to go on the stock market, because they have reached the size they have now and then they have to go public or show there earnings other ways.

zeus

eWhisper




msg:1235443
 1:03 pm on Apr 27, 2004 (gmt 0)

There has been talk that Google may forego this traditional IPO route in favor of a Dutch auction. In this rare system, the investment bank offers shares at a very high price and continuously lowers it, taking bids at various prices along the way.

All bidders end up paying the price at which the last shares are sold.

CNN Article [money.cnn.com]

Not sure how many ways their are of initally selling stock, but this looks promising to everyone involved if its the route they choose.

finer9




msg:1235444
 1:17 pm on Apr 27, 2004 (gmt 0)

The Dutch auction thing is not happening. CNBC reported on the G IPO all day yesterday and confirmed 99% that is not happening.

It looks like we will see something inbetween a normal old school IPO and a new wave dutch auction.

Since we know it IS being handled by the good ol boys (MS and CSFB) there are limits on how innovative it will be in my opinion.

rogerd




msg:1235445
 1:21 pm on Apr 27, 2004 (gmt 0)

I wonder if there is some danger of an auction format bidding the share price so high that investors are likely to be in a loss position for years. You can't really blame Google if investors get what they bid for, but this offering is kind of unusual in terms of awareness and potential demand. (It would be a rare situation indeed when shares from the investment bankers might be a bargain. ;))

258cib




msg:1235446
 1:27 pm on Apr 27, 2004 (gmt 0)

In the Wall Street Journal today on page B1 there is amusing (to the readers of this board, at least) article on how Google keeps its cards close to its chest.

In a nutshell, Google treats everyone with a take it or leave it approach.

Or, as the story concludes:

..."Here, the bank is seen as a tool in the process as opposed to a partner," said someone familiar with the situation. Indeed, Google still hasn't given even basic financial data to most of the banks it has hired.

The article, by Robin Sidel, Mylene Mangalindan and Kevin J. Delaney, notes that "secrecy permeates Google's relations with the outside world." (No kidding!)

I didn't know that Google won't disclose exactly how many employees it has, I did know that it keeps a secret how many servers it uses. The article, of course, covers what this board talks about all the time:
how its decides the order in which they display Web links when a user types in a search request.

According to WSJ, "Google didn't hand over any financial data. Instead, bankers had to rely on assumptions derived from other Internet companies, as well as their own estimates about Google's business, to project a value for the company.

It was only two weeks ago that Google notified the secondarry group of banks of their roles in the IPO.

All the while, says the article, "Bankers have been paranoid about whether Google is really showing them its hand. Some worry that company executives have deliberately supplied them with misinformation to see whether they would leak it."

To the WSJ I'd say: This is typical! You should work with them as a publisher or ad buyer. (WSJ uses Overture, BTW.)

bcolflesh




msg:1235447
 1:30 pm on Apr 27, 2004 (gmt 0)

Some worry that company executives have deliberately supplied them with misinformation to see whether they would leak it

Read:

"Company executives are furious they won't be able to leak private information for profit per the status quo"

gopi




msg:1235448
 1:47 pm on Apr 27, 2004 (gmt 0)

>> the bank is seen as a tool in the process as opposed to a partner

I dont see anything wrong with that attitude - its not that the banks have to market Google heavily to potential investors - IMO the role of banks in the google IPO is just limited to paper work and stuff ...

258cib




msg:1235449
 2:24 pm on Apr 27, 2004 (gmt 0)

Bambi Francisco at Marketwatch says the Google IPO "may be ushering in a short-term mania followed by another hangover."
[cbs.marketwatch.com...]
D9338%2D4237%2D85B9%2DA776D5261669%7D&siteid=mktw

Noting Ask Jeeves run up (AJ gained 7 percent to $44 on Monday) and that InfoSpace rose 2 percent to $41.22, she says Ask Jeeves derived 69 percent of its sales from Google and "that percentage will be even higher after Ask Jeeves consolidates ISH."

Likewise, InfoSpace's and CNet ad sales. Yahoo which invested in Google when it was just starting, saw shares rise as well.

Correct me if I'm wrong, but unless a Google IPO has a way of accelerating the overall online ad business from the current estimated 20 percent annual growth rate or 35-plus percent growth for keyword advertising, then why should Google's IPO usher in higher multiples for Internet companies as well?

Good question.

Brett_Tabke




msg:1235450
 2:47 pm on Apr 27, 2004 (gmt 0)

Google never has been conventional.

> Hopefully the breath of fresh air this industry
> is in long need of!

Current Status:

- post economic expansion phase appears to have started. (there is always a cooling off period after a hot period like most of the 90's)
- oil prices rising fast. Inflation and unemployment a safe bet to follow within 6-24months. (deja vu econ 1974)
- an election year. Nothing but defiecit bloating gets done in an election year.
- iraq is looking more and more like a quagmire.
- Housing starts flat this spring in the US (those that can afford the downpayment to buy homes have done so in the last 10 years. it is predominantly down cycle).
- food prices rising steadily around world.
- web maturing. (less $$$ to go around - hello fixed line item corporate time)
- stock market flat.

IPO in that atmosphere?

Can't wait to see that prospectus and the books - it must be a total shocker.

mquarles




msg:1235451
 3:40 pm on Apr 27, 2004 (gmt 0)

Gosh Brett,

You must read different news than I do. This is what I read for current status:

- the stock market crash started in March 2000 and took the NASDAQ from the peak of over 5,000 almost down to 1,000 reversed itself in September of 2002, and the NASDAQ is UP over 60% since September of 2002
- the Saudis have promised to, as they have always done, push oil prices down in an election year, so we're probably only going to get better on that one in the next few months
- election year and deficit bloating - well, the deficit bloat is clearly there, but its immediate impact on the economy is almost nil - although it does mean problems a few years down the line (not going to effect a Google IPO sooner rather than later)
- housing starts will definitely slow with higher interest rates, but, considering March was the highest growth month on record, I'm not sure coming down a little from the best ever is a major problem
- food prices? is this going to effect a Google IPO?
- web maturing - is a good thing. This means that investors will seriously consider a company that makes real profits, like Google, rather than the fake companies that supported the tulipmania economy of the late 1990s. Just check out the stock trend for Yahoo or eBay for the last year and a half - Yahoo worth over 5X what it was then and eBay worth over 3X what it was then. These are companies that, like Google, actually make money with a sustainable business model.
- stock market flat? The same stock market that turned a corner a year and-a-half ago? The same NASDAQ that is up over 60% since then?
- unemployment rates are currently lower than the average for the 1990s. Admittedly, tech and some industries are hit hard, but across the board unemployment is better than typical in the U.S. It was timed perfectly with the stock market crash, as unemployment started getting worse in March of 2000. For about the last year, nonfarm payrolls have been increasing, and hours worked have been increasing dramatically since mid-2003, which bodes very well for unemployment in the future.
- pick almost any chart from the Fed's reports [app.ny.frb.org]; almost all show a trend peaking in March 2000, going down until around September 2002, and going up since. The 1990s boom was driven exclusively by an irrational stock market bubble; the subsequent crash by the 2000 stock market crash, and now we're back in relatively normal times on both.

Doesn't seem like a bad time for an IPO. If your gloom and doom forecast for 6-24 months from now is true, then better now than next year.

MQ

[edited by: mquarles at 5:48 pm (utc) on April 27, 2004]

indigojo




msg:1235452
 3:41 pm on Apr 27, 2004 (gmt 0)

Oh well, lets hope that Warren picks up some stock and Bill not too much.

fidibidabah




msg:1235453
 4:15 pm on Apr 27, 2004 (gmt 0)

Hm, can you, as the company, stop a specific person or entity from buying your public shares? ;)

robertito62




msg:1235454
 4:47 pm on Apr 27, 2004 (gmt 0)

> - oil prices rising fast. Inflation and unemployment a safe bet to follow within 6-24months. (deja vu econ 1974)

IPO in that atmosphere?
--
I think Brett is right. I may add rising interest rates.

Decade of 70's was the decade of the metals, if deja vu is what IPOers are considering (oil up, rates up, growth stalled > rate of earnings' growth nuked), then the next few months will be their last chance for a semisuccessful IPO and waiting for 2005 may not be an option.

It does look like world growth has peaked and that markets are ready for another turn (down).

mfishy




msg:1235455
 5:11 pm on Apr 27, 2004 (gmt 0)

Woah, Brett, you must invest in s different stock market than the rest of us. 2003 wan an incredible year for the stock market and, IMO, we are well over the recession hump.

Robert Charlton




msg:1235456
 6:15 pm on Apr 27, 2004 (gmt 0)

...have suggested in the past that Google would allocate some of its shares to small investors through an auction model...

gBay

dwilson




msg:1235457
 6:39 pm on Apr 27, 2004 (gmt 0)

Good points, mquarrels.

re: Brett's point on a quagmire in Iraq ... the possibility is there, but it's by no means certain. If the Marines really are fighting only the extremists, even imported extremists, they'll win pretty soon. There are only so many extremists.

[edited by: dwilson at 7:05 pm (utc) on April 27, 2004]

258cib




msg:1235458
 6:44 pm on Apr 27, 2004 (gmt 0)

gBay

ROTFL

It has been pointed out that the front page of the WSJ, unlike the article, summed Google overall up tightly:

Google has created an ultrasecretive process for its IPO, consistent with the secrecy that permeates the company's relations with the outside world.

It has been fun to watch the old line publishing types come in here and ask, "What the....!?" as they find that they control nothing with the Adsense ads: With G it has been take it or leave it.

Players such as Quigo (whatever happened there?), Kanoodle, Industry Brains, Vibrant Media, Overture, and now Tacoda think Google's (and Overture's to some degree) attitude gives them a niche to carve out with the big boys on the web. I hope they are right, but I'm doubtful.

I do like Tacoda's new approach, however. It has the best potential for branding on the web that I have seen.

Here's an article on what they are calling an AudienceMatch Network:
[clickz.com...]

mquarles




msg:1235459
 7:02 pm on Apr 27, 2004 (gmt 0)

quagmire in Iraq

How exactly is Iraq relevant to a Google IPO, or were you just trying to inject politics? I'm pretty sure there are not many potential investors in GOGL/GOOG/GGLE in Iraq.

MQ

[edited by: mquarles at 7:02 pm (utc) on April 27, 2004]

dwilson




msg:1235460
 7:02 pm on Apr 27, 2004 (gmt 0)

Interesting read, 258cib.

Sounds to me like as big a privacy concern as GMail ... combining what various companies have learned about a particular user.

dwilson




msg:1235461
 7:04 pm on Apr 27, 2004 (gmt 0)

How exactly is Iraq relevant to a Google IPO, or were you just trying to inject politics?

Sorry, that part was in response to Brett's post -- the one with which you took issue on nearly every point. Should have made that more clear.

258cib




msg:1235462
 7:15 pm on Apr 27, 2004 (gmt 0)

Sounds to me like as big a privacy concern as GMail ... combining what various companies have learned about a particular user.

No doubt about it.

Here's more from Media Post:

On Monday, the behavioral targeting advertising network was officially born.

...both aQuantive Inc. and Tacoda Systems launched advertising networks yesterday to compete in the rapidly growing--yet very much under construction--behavioral targeting medium. ... aQuantive said its new unit DRIVEpm will collect audience segment information from its network of publishers, and serve ads based on the behavioral data it collects. And Tacoda continues to develop a pay-for-performance network of content sites that will run text ads leveraging its AudienceMatch technology....
[mediapost.com...]


Hunter




msg:1235463
 7:19 pm on Apr 27, 2004 (gmt 0)

Not to rain on the parade but I suspect that they could easily provide an "unusually broad range of investors a chance to compete for some of its IPO shares" without giving many people much of a shot at all :)

woop01




msg:1235464
 8:36 pm on Apr 27, 2004 (gmt 0)

Regarding Brett's post that you guys have taken some exception to...

He's from Austin. If you know Austin, you see that influence in his post.

iblaine




msg:1235465
 9:30 pm on Apr 27, 2004 (gmt 0)

Google Inc. of Mountain View will structure its much-anticipated initial public offering of stock in a way that will give an unusually broad range of investors a chance to compete for some of its IPO shares, according to an investment banker familiar with the company's plans.

For anyone wanting to buy shares the day google goes public, making this stock more available could be a bad thing.

ScottM




msg:1235466
 9:50 pm on Apr 27, 2004 (gmt 0)

Dumb question, but could Google offer shares via Adwords/Adsense?

For example:

They offer 10,000 shares via Adsense ads. Each ad allows you to buy, say, 10 shares at a $1.00/share? Sorta an "Easter egg hunt" for those shares?

Just trying to think out of the box here.

SlyOldDog




msg:1235467
 10:03 pm on Apr 27, 2004 (gmt 0)

Google has an audience of nearly every influential and rich person on the planet.

So what exactly does Google need the banks for? Can somebody explain please?

To file the papers at the SEC? I'm sure their law department could do that.

This 45 message thread spans 2 pages: 45 ( [1] 2 > >
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