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Here is another writer's commentary that mentions a Google IPO:
THEY ARE ALREADY MAKING A PROFIT
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.
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.
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. :)
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.)
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:).
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.
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.
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!
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.
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.
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.
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.
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)
Happy New Year Everybody!
Stick around here long enough, and you actually KNOW what Google are going to do even BEFORE they think about it.
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.
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.