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atleast they got this right..
Excite.com is already up for sale, AltaVista is just a shell of its former self, NBCi and Go.com have been dismissed
Chalk it up as big fat rumor... for now.
For Google, that means not requiring or even allowing [zdnet.com] companies to pay to get into its highly respected index. "We think if we're the only ones out there with a reputation for integrity in our search results, that can only be good for us," says Craig Silverstein, Google's director of technology.
Edited by: luckynh
joined:Jan 24, 2001
joined:Apr 13, 2001
With only six members on the Board of Directors (Larry Page, Sergey Brin, Eric E. Schmidt, Ram Shriram are the other four), you have to conclude that the implicit cumulative leverage of the money men on the Board gives them a virtual majority.
Page and Brin could easily lose the thing, even assuming that they were trying to hang on to their Baby for dear life.
Undoubtedly, the venture capitalists are more cautious now about getting their money back than they were two years ago, when the dot-coms were still flying high and the most important letters in the alphabet were "IPO."
Google has said that they will profitable by the fourth quarter. If it doesn't look like they will, then the time to cut a deal (from the VC standpoint) might be now. They could at least walk away with a smirk on their face. The market is a disaster (no IPO anytime in the foreseeable future), but Google's branding is strong enough to make the investment fully recoverable at this point. How long will the magic of the branding last? These things tend to be even more volatile than the market.
It's also possible that there may be internal conflicts that we don't know about, which would make a sale of the company attractive to one or more on the Board. A chance to take some money and run.
I hope it doesn't happen, but I have to agree that it's a deal that makes sense from various perspectives.
That's not going to happen due to the reason's Everyman mentioned. The IPO option is off the table. That only leaves two options for VC's to recover their money. Sell or pump more money in and stay in it for the long haul and hope that Google can become profitable.
VC's are not long-term people, and from what I've read, Sergey and Larry aren't drawing large CEO type salaries, so I doubt that they will be fighting very hard to hang onto "their baby." Their payoff is in the back-end, and the likelyhood of seeing it has dramatically changed.
If it were me, I would sell in a heart beat.
joined:Apr 13, 2001
You are absolutely right about that.
From The New Yorker magazine, May 29, 2000, p. 98:
"Page and Brin each take eighty thousand dollars a year in salary."
Furthermore, I suspect that the VC folks arranged for the company itself to inherit the rights for any patents filed by Page and Brin. I also don't think that anything like a PageRank patent, assuming such a thing was ever granted, would be worth much in any case. Once granted, all you have to do to sidestep a PageRank patent is to change the algorithm somewhat. It's complex enough so that this would be easy to do.
The bottom line is that even Page and Brin may be ready for a way out. Get your Google T-shirts while you can!
joined:Apr 13, 2001
I agree, but that's a huge IF in front. Sergey Brin said on his broadcast the other day that no IPO was on the table. But that's probably as reliable as the Inktomi denial from another Googler.
Sure, those who use Google enthusiastically and are in the habit of buying stock might get a few shares. But compared to the mutual fund and other big institutional investors, this is a drop in the bucket. I still hear from folks who use the Internet who don't know what Google is, believe it or not.
The news from the dot-bomb front is as bad as it has been for the last six months, and there's more to come. Big investors aren't going to go for Google because they like the cute colored letters.
The only way Google could chance an IPO is to price the shares rather low. Even then they might not accomplish much more than to make themselves ripe for takeover, if those Googlers who end up with large blocks of stock put themselves into play.
The worst scenario is to price the IPO too high, and watch it go lower. That would be a disaster; they'd be a target for takeover immediately.
All the good press in the world gives you about five nanoseconds of Grace on Wall Street. PageRank is swell, but the old income statement and balance sheet are what really counts. It doesn't matter how wonderful your search engine is if you aren't making Wall Street happy.
It's more likely that a prospective buyer such as Inktomi, with a stock price that is way down compared to a year ago, but recently is up from the all-time low, would figure that Google's good name would make their stock rise once they purchase it. Inktomi might even recover much of the sale price that way.
Then the question would be whether or not Inktomi ruins Google in an effort to make it profitable. ("Ten thousand computers? We'll let you keep a hundred! Linux? We've standardized on Windows!")
Yeah, right. sorting trough 1,346,966,000 web pages in 0,12 seconds for 500.000+ queries a day is no problem for Windows.
I remember Brett's Google page for April's fools day. And it leaves me a sour taste.