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Businesses The Almighty Buck

Google Cancels Spring IPO 246

securitas writes "Google fans and potential investors will be disappointed to learn that they must wait a while longer before they can own a piece of Google. The Times of London's James Doran reports that Google's IPO plans are on hold. CEO Eric Schmidt appears to think that market conditions are not right. When pressed for details about the delayed IPO, Schmidt said, "An IPO is not on my agenda right now." A commentary about the delayed Google IPO follows. Mirror at Australian IT."
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Google Cancels Spring IPO

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  • ugh (Score:4, Interesting)

    by Tirel ( 692085 ) on Monday February 02, 2004 @10:31AM (#8158164)
    Analysts estimate, however, that Google's annual revenue is between $500 million and $1 billion, with profits between $150 million and $300 million.

    Wow, where do they get that kind of money? Surely not the ads..
    • Re:ugh (Score:5, Informative)

      by ceejayoz ( 567949 ) <cj@ceejayoz.com> on Monday February 02, 2004 @10:34AM (#8158189) Homepage Journal
      Deals with Yahoo, AOL, and other big sites... sales of their standalone intranet search servers... and I'd imagine they're doing well on the ads, too.
    • Re:ugh (Score:5, Informative)

      by akedia ( 665196 ) * on Monday February 02, 2004 @10:35AM (#8158206)
      Any website you see with a search function that says "Powered by Google" under it, means that site is most likely paying Google a fee to use that, and make sure their site is indexed. Two I know for sure are AOL and MSN for their ISP software, they license their search functions from Google.
      • Re:ugh (Score:3, Interesting)

        Yahoo also uses Google. In fact, I read recently (probably in an article I found on /., though having not slept last night I have no interest in trying to find the link) that Yahoo traffic accounts for something like 20% of Google's queries.

        If anyone wants to find the link, I think it was in the recent article about Macrosquash's efforts to develop a competitive search engine. Of course, it was probably a gross estimate anyway.
        • Re:ugh (Score:5, Informative)

          by wo1verin3 ( 473094 ) on Monday February 02, 2004 @11:03AM (#8158490) Homepage
          Yahoo may however be leaving google..

          http://www.theage.com.au/articles/2004/01/15/10738 77971434.html [theage.com.au]

          Meanwhile, there are reports that Yahoo! and Microsoft are preparing next-generation search technologies to beat Google, the world's most popular search engine. Microsoft, according to one report, is working on a "Google killer" and analysing the Web with its own internet spider, a piece of software critical to building search engines.
          • In their last quarterly conference call, Yahoo CEO announced a move away from Google. The timeline is in the air but the decision is not.
      • Re:ugh (Score:2, Informative)

        by lonb ( 716586 ) *
        Actually, most sites that say 'powered by goole' are not paying for this service -- Google provides it for free. Besides their advanced search [google.com], which can be called via query composition, they expose a robust API [google.com] for free.

        Google makes most of their money from ads [google.com] (keyword searches, etc.); licensing of their technology to third-party search engines like Yahoo! (although Yahoo! is dropping Google [com.com]); and, selling search appliances [google.com], which do lots of non-Internet work as well.

    • Re:ugh (Score:3, Interesting)

      It might be the ads - they're awfully expensive for a decent campaign. I think it's more likely to be sales and service to other companies; using Google's search feature is free to many (like schools and non-profits I think) but some companies pay big bucks for their search technology.

      I think they're a great example of a business run well, not selling out (to MS) and really focusing on being the best damn whatever that they want to do.
      • Re:ugh (Score:4, Insightful)

        by gmack ( 197796 ) <.ten.erifrenni. .ta. .kcamg.> on Monday February 02, 2004 @01:26PM (#8159857) Homepage Journal
        " It might be the ads - they're awfully expensive for a decent campaign"

        They are expensive only if your looking exclusively at the initial cost and don't take results into account. Clickthroughs from google are far more likely to actually make a purchase than from almost every other source I've looked into. The result is that a google adword page view is a lot more valuable than an ad elsewhere.

        The fact that they alert you if they think it's not effective enough only adds to the value.

    • Re:ugh (Score:3, Informative)

      by Zocalo ( 252965 )
      Surely not the ads..

      There is the Google Search Engine Appliance [searchtools.com] thing, which must have a healthy profit margin. I doubt that's going to be all that significant a contribution though - so I guess there is more profit in throse Sponsored Links than might be expected.

    • Re:ugh (Score:2, Informative)

      by Anonymous Coward
      Why not the ads? Think about the kind of traffic Google gets, and then realise that there are small text ads on almostevery results page they serve.

      Furthermore, I get the impression that their business model uses google.com as advertising for their licensing model.
    • Re:ugh (Score:5, Insightful)

      by Greyfox ( 87712 ) on Monday February 02, 2004 @10:59AM (#8158442) Homepage Journal
      More to the point, with numbers like that why do they even need an IPO? Why bother whoring yourself out to Wall Street when you can already afford to fill your swimming pool with cash?
    • Re:ugh (Score:3, Informative)

      by alexatrit ( 689331 )

      Don't forget the Google search appliances that are sold/licensed/maintained. I know of numerous Fortune 500 companies that use the appliances for their internal sites.

      In addition, when I was searching for jobs I checked up on Google. There were a few positions in the DC area that required high level security clearances, indicating that the government is using the appliances internally as well. To what extent, we don't know.

      • "To what extent, we don't know."

        Picutre Mulder holding a PocketPC instead of a file. Considering his porn habit, I'd say he'd be an early adopter.
    • Re:ugh (Score:5, Informative)

      by glinden ( 56181 ) * on Monday February 02, 2004 @01:30PM (#8159901) Homepage Journal
      • Surely not the ads.
      Why not the ads? A simple back-of-the-envelope calculation shows it's at least plausible.

      250M searches/day [searchenginewatch.com] * 3 ads/search * 1-2% clickthrough/ad * 365 days/year * $.10/clickthrough = $274M-$548M/year.

      The 250M searches/day may be low since it's from Feb 2003. It also doesn't include Google's Adsense [google.com] program, putting Google ads out on other sites, which probably doubles the amount of page views.

      Google has unusually high clickthrough rates and payments per click because of their AdWords [google.com] targeted advertising. Ads are matched to keywords and then optimized, with the most effective ads showing more and least effective dropping away.

      Certainly enterprise revenue (licensing the Google search engine for use on other sites) is part of their revenue, but I suspect the majority is from advertising.
  • Oh Darn... (Score:5, Funny)

    by DarkHelmet ( 120004 ) * <markNO@SPAMseventhcycle.net> on Monday February 02, 2004 @10:32AM (#8158167) Homepage

    Instead of getting my free advertising stock benefit with google, I think I'll just buy some more Krispy Kreme and get another free box of doughnuts.

  • by wawannem ( 591061 ) on Monday February 02, 2004 @10:33AM (#8158187) Homepage
    I mean, before the .com boom, companies usually only went public because they needed money to grow. Google seems to sustain a very healthy bottom-line and I think they have yet to figure out what they want to grow into.
    • by goatasaur ( 604450 ) on Monday February 02, 2004 @10:37AM (#8158236) Journal
      Until of course they go ahead with the IPO, become so top-heavy and ad-driven in a couple years that they topple over.

      Enjoy it while it lasts.
    • I wouldn't be surprised if the main reason behind an IPO is to reward early employees, they would be able to sell their options publicly.

      On the other hand, with as much cash as they have, it could be wise for Google to buy the options back directly instead of becomming an entirely different beast altogether, a publicly traded company with investor approved "short term share holder value" obessed CEO...
  • Bravo Google (Score:5, Insightful)

    by Cr3d3nd0 ( 517274 ) <.Credendo. .at. .gmail.com.> on Monday February 02, 2004 @10:34AM (#8158190)
    Frankly I'm all for them never releasing an IPO. Sure it brings in extra cash in the short term but in the long term, your buisness focus shifts from your product and customers to the whims of your shareholders. One of the primary reasons people use google that I've seen isn't the qualit of searches, it's the lack of abusive adds, and genereal "customer friendly" enviroment that google provides. So the longer they put off selling stock the longer they don't have shareholders breathing down their necks for better profit margins.
    • Spot on! Yeah this can be modded redundant all you like, but I agree with that guy totally ^^^^^
    • Re:Bravo Google (Score:5, Interesting)

      by sphealey ( 2855 ) on Monday February 02, 2004 @10:57AM (#8158414)
      Frankly I'm all for them never releasing an IPO. Sure it brings in extra cash in the short term but in the long term, your buisness focus shifts from your product and customers to the whims of your shareholders.
      Problem is that without a public offering it is very difficult to reward the worker bees who created the company by working 20-hour days for the first x years. You can only distribute closely-held shares up to a point, as Microsoft found.


      • Re:Bravo Google (Score:3, Insightful)

        by regen ( 124808 )
        Problem is that without a public offering it is very difficult to reward the worker bees who created the company by working 20-hour days for the first x years. You can only distribute closely-held shares up to a point, as Microsoft found.

        Um...Ever heard of this thing call cash? You can give it to people in exchange for them providing you with goods and services.

        Most "worker bees" would prefer cash to stock options.

        • This points up one of the things I've never understood. Conventional wisdom is that it's cheaper to reward employees with stock options than cash, or cash equivalents like private use of a company car, for that matter. There seem to be a lot of counter-examples to this "wisdom", but not a lot of businesses paying attention to those counter examples.
          Is this something MBA's are taught that doesn't fit the real world? Or is there some government regulation that makes paying off your employees in stock opti
          • Re:Bravo Google (Score:3, Interesting)

            by sphealey ( 2855 )

            This points up one of the things I've never understood. Conventional wisdom is that it's cheaper to reward employees with stock options than cash, or cash equivalents like private use of a company car, for that matter.

            Um, if the founder pays you with cash, it comes out of cash flow from operations. Which might be needed for, say, operations.

            Whereas if he gives you stock options, and they vest to your advantage, you will be paid by the greater fools who buy the publicly-traded shares. No cash out of the

        • I agree, most people ( including me ) would take 1/2 * X dollars in cash over 1 * X dollars in stock options any day.

          Options for a certainly valuable company like google might be discounted less, maybe 3/4 of cash, whereas most other companies stock options would be discounted by more being valued at 1/10 or less of cash. If google has been distributing stock options, and now they are delaying IPO, it can't be good for morale. They should offer to buy back the options for cash.

      • Re:Bravo Google (Score:2, Insightful)

        by shakuni ( 644197 )
        Shareholders are the owners of the company.A publicly traded company is less likely to be managed on "whim" of an individual or a small group as the ownership in publicly traded companies is widely distributed. Note that most successful companies have been there for long and are publicly traded. So in the long run publicly traded companies do well.You are just speaking emotionally than basing your views on any objective data. Whims happen in closely held companies that are not publicly traded, not in comp
    • Re:Bravo Google (Score:5, Insightful)

      by 1000101 ( 584896 ) on Monday February 02, 2004 @11:05AM (#8158509)
      "Sure it brings in extra cash in the short term but in the long term, your buisness focus shifts from your product and customers to the whims of your shareholders."

      You make it sound like every company that is traded publicly doesn't produce good products. I am a shareholder of a number of different companies and the only thing I care about is that they keep producing quality products so customers continue to buy them. Companies that fit your description typically don't last.

    • Re:Bravo Google (Score:2, Interesting)

      by imlepid ( 214300 )
      It's a very good point. Sometimes companies fall into harder times trying to play to their investors, such as when the Virgin Group [virgin.com] went public they were constrained so much they eventually bought back all the stock they sold. Branson (Virgin's Chairman) talks about how they had to consult the board to authorize the signing of UB40 and since board meetings happened infrequently they could have lost the band to another record label. (For more info on Virgin's time as a public company look at Brnason's boo
    • Re:Bravo Google (Score:3, Informative)

      by NixLuver ( 693391 )
      I completely agree. Particularly in extremely technical corporations, the average stockholder is adrift in attempting to evaluate a given technically driven decision; thus a valuable technical decision can cause a shitstorm of selloffs, driving stock into the ground and reducing the credit rating of a company, making it impossible for them to get cash-flow loans, ultimately (in the worst case scenario) driving them into bankruptcy because of their inability to pay their accounts payable so that they can col
  • by bc90021 ( 43730 ) * <bc90021&bc90021,net> on Monday February 02, 2004 @10:34AM (#8158194) Homepage
    ...and their IPO has been a lot of speculation from the start, and wasn't ever "official".

    While there have been some hints, it has largely been hype that is responsible for people thinking that Google would have an IPO.

    Furthermore, it seems that it would be a smart move for Google to capitalise on this, and have their CEO say that an IPO wasn't even on his agenda. That would make people want it all the more, so it's a smart move that they've done that! Using the hype to their advantage without committing to anything... very shrewd.
    • What I heard frequently repeated was that the venture capitalists who provided Google's initial investment would be expecting Google to IPO at some point in order to maximize the VCs' return-on-investment, and that Google was to some degree under obligation to eventually do as they wished.

      Is there some basis to this or was this just another Slashdot urban legend?
  • Good (Score:5, Insightful)

    by wizarddc ( 105860 ) on Monday February 02, 2004 @10:34AM (#8158196) Homepage Journal
    I find this good news. The longer that Google's technology interests are held in private hands, rather than the public interest of their stock price, I think the world is a better place. I'll be crying when I see GUGL -1 3/4 running across the bottom of my TV screen.
  • by andih8u ( 639841 ) on Monday February 02, 2004 @10:34AM (#8158197)
    Look what happened to Yahoo when they went public. An IPO is not a good thing. Letting a bunch of Wall Street financial people have a say in what to do with your tech company is just a bad idea.
    • What happened to Yahoo? It looks and functions the same as it always did, perhaps a little better, and it's got a thousand different services for free, and some for pay.

      I don't see that going public hurt Yahoo at all, as far as customers are concerned.
      • As memory serves me, it really wasn't until after they went public that their frontpage as well as search results pages became littered with ads. They have scaled back a bit on that lately, but the bottom line is that when all your investors care about is your bottom line, bad things happen. Ads start springing up, they come up with the brilliant idea of making you pay to be listed, and they start cutting those dratted R&D dollars. Why improve something to make it last for a long time when you can bu
  • hmmmm (Score:4, Funny)

    by graveyardduckx ( 735761 ) on Monday February 02, 2004 @10:35AM (#8158204)
    well if google hasn't gone public yet, can I invest in booble?
  • by StyleChief ( 656649 ) on Monday February 02, 2004 @10:37AM (#8158240)
    I wonder what exactly the "right" conditions might be? The market seems to be picking up, so does someone have insight into what we should be waiting for? Someone out there must have their finger on the pulse of good information . . . .
    • Easy answer (Score:4, Insightful)

      by r_j_prahad ( 309298 ) <r_j_prahadNO@SPAMhotmail.com> on Monday February 02, 2004 @10:41AM (#8158273)
      I wonder what exactly the "right" conditions might be?

      Not being in SCO's sights, maybe?
      • Re:Easy answer (Score:3, Interesting)

        by sphealey ( 2855 )
        wonder what exactly the "right" conditions might be?
        Not being in SCO's sights, maybe?
        Or it could be the other way around. With no IPO underway, Google would be free to file suit against SCO, Canopy, and their backers. With $20 billion of Canopy, Baystar, and RBC's money in their pocket Google would then have no need to go public.

        Just a thought.


    • If they are indeed intending to go public, they might be waiting for the tech market to peak so they can make the same amount of capital while selling less shares.

      This is good for the company, because not only do the private owners still totally control the company, but they:

      a) can buy back the shares on the open market for less than they sold them if they want them back

      b) can sell more shares later if they need more capital (since they didn't sell as many shares on the IPO to make the initial capital)
  • by 192939495969798999 ( 58312 ) <info&devinmoore,com> on Monday February 02, 2004 @10:38AM (#8158244) Homepage Journal
    I am happy to see Google not go on the market. I fear that Microsoft would simply try to buy all of the shares immediately. While google might be worth a few billion, to Microsoft it's worth a lot more, because they need a good piece of search to integrate with Hotmail and their other services... it's worth whatever they're losing!
    • I imagine Google wouldn't release enough shares to the public for a hostile takeover. Like an earlier poster pointed out, they hardly seem to need the cash, so why take the risk? As long as they release fewer than 51% of the shares, a hostile takeover is impossible.
    • by fhmiv ( 740648 )
      Speaking of Microsoft as a Google competitor, is it possible Google doesn't want to endure the news blackout during the cooling-off period if they did file their prospectus to go public?

      Could the cooling-off period limit their ability to respond to Microsoft's publicity machine during a potentially critical time?

    • by tackaberry ( 694121 ) * on Monday February 02, 2004 @11:03AM (#8158487)

      It's not quite as simple as that. First off, the IPO would only be for a portion of the shares now held in private. So Google insiders would still hold significant control. Second, there are disclosure rules pertaining to buying up shares. The SEC requires shareholders to file statements once they cross thresholds in ownership. Third, Google could implore a number of various defences against any "take-over", including a share rights agreement (aka poisin pill), staggered terms for directors, etc. For one company to buy out another, it either has to be a friendly deal between the parties, or hostile - offers shareholders $$$ to tender their shares to the acquiring entity.

      The reason for IPO-ing is either 1) to raise capital for growth, expansion, etc. - Google seems to be doing fairly well so far, and money is still cheap enough that they could tap the debt markets or private placements before going public, or 2) (which is likely more the reason), to provide liquidity for the current shareholders - the currently management team is sitting on millions of dollars, but they don't have any easy means to convert their ownership position into cash.

      By having a public float, Google would have to disclose their financial information (as well as other stuff). With all that is happening, increased competition, maybe they take a wait and see approach, especially if they aren't in dire needs for cash.

    • They were only going to release 20% of shares or so anyway. Also, what you suggest is utterly ludicrous anyway.
  • This is good news (Score:5, Insightful)

    by Tassach ( 137772 ) on Monday February 02, 2004 @10:38AM (#8158245)
    Going public is very often the worst mistake a company can make. Knowledgable private investors are very often more forward-thinking and tuned in to long-term performance, whereas stock market investors are very fickle and often don't look any further forward than the next quarterly earnings statement.

    I'm not interested in Google as an investment opportunity; I just want a search engine that doesn't suck. Staying private lets Google concentrate on what they're good at -- making good tools -- and not worry about having Wall Street yahoos questioning every decision they make and penalizing them for long-term strategy over short-term profit.

    • Private and public companies.
      Yes that may be true, and I know that some stats document this.
      But nothing prevents a public company from acting with a long term strategy, or a private company acting with only a short term strategy.

      It really comes down to what the owners want.
      Many shareholders just want a quick buck, so the companies run that way.
      I hope that with the changes in US dividend taxation people might start looking for good cash generating business to invest in, and maybe this will change.
  • by ciaran_o_riordan ( 662132 ) on Monday February 02, 2004 @10:39AM (#8158265) Homepage
    I'm glad they've cancelled. Right now, Google have control over their company, and they seem to be pretty nice guys. After floating the company they can face greater market pressure which could easily spoil it.
  • by Pedrito ( 94783 ) on Monday February 02, 2004 @10:43AM (#8158288)
    Going public is a major change for a company and while it can bring in a great deal of cash to work with, it also creates a new layer of accountability as well as more strict and public operations. It's not always in a company's best interest to go public and I question if it's in Google's best interest.

    From everything I've seen of google, financials don't appear to be their weakness (though maybe it is and it's just not visible). So what do they need the cash for? Sure, the directors will make tons of money from doing it, but is it in the best interest of the company? Do they have acquisitions they want/need to make?

    Frankly, Google has done quite well as a private company and I have some concerns about what may happen if they go public. As an example, there are some people that claim Google has unfairly ranked them and have sued. Google is, in many ways, a monopoly in the search business. Were they to go public, these kinds of suits might get further in court as Google would likely be under more scrutiny regarding this. I think Google does a good job of modifying page ranks of people trying to trick the system. I'd hate to see them lose that ability.

    There are other areas as well where Google being privately held is an advantage. I could certianly be wrong about some of this. I'm not a corporate attorney nor an accountant, but this is my interpretation.
  • by mcc ( 14761 ) <amcclure@purdue.edu> on Monday February 02, 2004 @10:49AM (#8158343) Homepage
    • Microsoft has been making constant noises about their new, upcoming search engine and how great it's going to be, basically doing the full-tilt vaporware thing, almost certainly with the purpose of adding uncertainty to Google's IPO. Microsoft would do something like release, with a huge media blitz, their new search product the day before Google's IPO. Waiting either pushes MS to actually release their product or allows Google, on the not wholly unrealistic possibility that MS drops the subject and then suddenly starts making noises again when Google reschedules their IPO, to accuse MS-Search of being vaporware.
    • SCO is being the computer industry loose cannon, until the money from their donation from Microsoft (and, hypothetically, Sun) runs out; they are under no obligation to do anything at all to make more money; and they seem to be desperately, greedily obsessed with doing exactly two things: Hurting linux in any way, public relations or otherwise, and getting press attention. They've been making noises about suing Google; this is probably because making such noises keeps them in the press and because they know Google's about to IPO so they want to push Google to pay SCO some money so they'll go away and stop making uncertainty. However, it's not inconcievable they may well actually sue Google; their case with IBM may be about to unravel, and if so they need to start up a new lawsuit of some sort to keep up the illusion they have some sort of revenue model; and doing so on a nearly-IPOing Google would greatly help MS, which, how shall I put this, SCO at least seems to feel grateful toward, what with the fact their only documented profit ever happened solely because if MS's donation. SCO's a minor consideration, but still delaying IPO at least gives them time to die or deflates their lawsuit threats.
    • The economy is changing, and since the president may well change or nearly change in about six months it may be set to change a lot more in a very unpredictable and drastic way. This is a big deal. IPOs are of much less good if the economy changes drastically shortly afterward. (Can you say "Andover"?)
    I'm sure you can think of more reasons if you think about it.
  • by Angostura ( 703910 ) on Monday February 02, 2004 @10:54AM (#8158386)
    ...might wonder whether Google is afraid of IPOing because of the level of detail about their business operations and technology that they would have to reveal.

    There has been speculation about the Internet search engine's ability to scale, or the lack thereof. Filing for an IPO forces any company to come clean about the potential shortcomings or problems that it faces. Not always nice.

    Probably nothing of the kind, but worth keeping at the back of your mind.

    • Yeah, I don't think google can scale very well, I mean it's all very well when they have maybe a half dozen people using them per hour like now, running off a few servers in their backroom, but wait till they want to really get some people in.
  • SCO related? (Score:4, Interesting)

    by Anonymous Coward on Monday February 02, 2004 @10:54AM (#8158392)
    I wonder has this anything to do with the rumours recently about SCO targetting Google?

    In the midst of an IPO, impending court action would cause the price of stock to plummet. I'm guessing Google are holding out until this whole SCO debacle has been laid to rest.
  • Thank goodness. (Score:2, Interesting)

    Once Google goes public, expect greedy investors to destroy the things we like about it.

    I predict the technical side of Google will be outsourced to India within two years of it's IPO.

    Go ahead and waste your mod points silencing this post. It's not a troll, but happens to be what I think.
  • Here's the deal (Score:5, Insightful)

    by peterdaly ( 123554 ) <<moc.mocten.xi> <ta> <yladetep>> on Monday February 02, 2004 @10:59AM (#8158440)
    People are asking why Google wants/needs to go public.

    Here's the deal...private Google stock is held by too many people. They are at the threshold of legally be required to make their books public, and for all intentensive purposes acting like a publically held company.

    As long as they will be required to act like a public company, there is a large financial incentive for them to take the next step and trade publically.

    Whether they need the money or not...it is knocking on their door (both corp. and personally) asking to be taken. This knocking is (or maybe was) too hard for them to resist.

  • by Tarwn ( 458323 ) on Monday February 02, 2004 @11:00AM (#8158452) Homepage
    Before I knew about Google I was using Altavista. In the beginning they had a simple search interface, similar to how google is setup now. Basically it got the job done. After a while they started to get more widely known and started adding ad's to the front page and basically changing their mode of operation. People switched to google.
    I see the same possibility occurring. If google goes down the same trampled path that Altavista went, then a lot of people will be moving on to find another search engine with a clean interface that simply does the job.

    Google: Thats what we want. When we go to a search engine we want to search. We don't want links to buy garden tools when we are searching for benchmarks, or links to tech consultants when we are searching for a definition for an error message. Just a search. It's not broken the way it is.
    • It's not broken the way it is.

      Actually, it sort of is. Many times when you search for something general you get:

      1) Metapages that point to "useful" search engines.
      2) Shops trying to sell you something.

      I think it's high time Google implement the feature that's already in some more experimental search engines: category classification of results. It's especially important when searching for some term which is used in two or more completely different meanings.

    • I have to say that I think Google has their own success, and altavista's comparative failure, to demonstrate that their current formula is more successful. I don't really buy the argument that they'd necessarily fall into the same trap just because they have public shareholders.
    • I hear ya, but it sounds to me like Google has a strong argument for selling the clean interface for a monthly subscription fee and putting up an ad-laden frontpage for free. To maintain dominance in the free search engine market, they don't have to be excellent, just better than the rest of them. As far as a paid subscription to a clean (or customizable) interface, I know I'd find it easy to justify $5 per month for what Google offers.

      Not that I want that to happen - I love Google as a free service. As

  • by edxwelch ( 600979 ) on Monday February 02, 2004 @11:07AM (#8158537)
    When Netscape went public, everybody knew it was a hot stock. It was offered at $16 and quickly went to $70 (sorry, these figures are from my head, so propably a bit inaccurate). However Joe Public had no chance to buy the stock at $16. Only the people on the inside (big stockbroking companies, etc.) had a chance to buy at the initial price. By the time, normal private investors got in, the stock had already gone up to $50.
  • Why? (Score:2, Interesting)

    by NoGuffCheck ( 746638 )
    Still cant understand the reasons why Google would float. They already have 90% market share, that doesnt look like it will change.. Not sure the figure but there must be allot of people out there who think of Google when they hear the word "internet".. They dont sell a tangible product so they cant buy more stock of it.. So what is it??? Prestige of being a public company??? If so weve seen this formula is fundamentally flawed.. no-one will forget the dotcom crash or is it a case of survive an IPO increase
  • Good move (Score:3, Insightful)

    by Zebra_X ( 13249 ) on Monday February 02, 2004 @11:13AM (#8158590)
    Likely, Microsoft's interest in aquiring Google is reason for the IPO delay. Microsoft could easily buy Google out on the open market, by staying private they are a little safer from being aquired in a clandestine fashion.
    • Re:Good move (Score:2, Insightful)

      What makes you think they would float even 50% of the company? Can't "buy Google on the open market" if you can't acquire a majority.
      • Re:Good move (Score:3, Interesting)

        by Zebra_X ( 13249 )
        What makes Oracle think they can still take over peoplesoft? Clearly PeopleSoft has no desire to be aquired - however Ellison would appear to be insistent on owning them. There are more ways to aquire a company than through a purchase of stock on an exchange. I didn't mean to imply that just buying all of their stock on the market would imply that they would "own" google. There would clearly be a majoity held by the principal of Google itself. However, by owning stock in Google Microisoft could start to gui
  • by Anonymous Coward
    There will never be a better time for Google to go public. SCO and MS FUD are minor blips. Google are in their honeymoon period. All those articles about how there's never been another company like Google and isn't it great they have a cook will turn, like they did for Netscape before them. The fake economic recovery will end, interest rates will rise and the hype will cool. People (Not ma and pa, but the fund managers who matter) will realize that Google can never live up to the expectations they've set fo
    • Schmidt will take it public at some point, that is not in question. Think it is? Ask the VCs who finance the firm. They are in this to get paid kids, not to get you better search results. They get paid on IPO day.

      Market conditions are possibly the best they will be through to 2007. The stimulus echo bubble created last year is beginning to fade and the market is already moving back to a sell mentality. It is likely that if Schmidt goes public in 2005 or 2006, he will face a serious bear market in no mood fo

  • The minute they get investors involved, they'll start doing all kinds of stupid stuff to increase their bottom line. They'll end up like Yahoo
  • by sacrilicious ( 316896 ) on Monday February 02, 2004 @11:53AM (#8159001) Homepage
    Google fans... will be disappointed

    Nope. I'm a huge fan of google, but I'm quite happy at this turn of events. Going public puts pressure on a company to push for maximum short-term profit, and I like google just the way it is. If they needed the money to stay alive then that'd be one thing, but they don't.

  • by pjones ( 10800 ) on Monday February 02, 2004 @11:58AM (#8159050) Homepage
    http://www.google.com/technology/pigeonrank.html [google.com]
    I can say no more the links speaks for itself.
  • Chairman and CEO (Score:2, Interesting)

    by NoGuffCheck ( 746638 )
    If/when Google float, there will be considerable pressure to recruit an alternative Chairman/CEO, obviously Dr Schmidt will take one position but who for the other?? perhaps this is a factor in their decision to delay the IPO.
  • It's just The Times. It was there long before your upstart colonial New York crap. Get it right!
  • by Ars-Fartsica ( 166957 ) on Monday February 02, 2004 @12:31PM (#8159399)
    The tech bubble of 2003 is ending. Schmidt should learn the lesson of other firms like the Motley Fool and worry less about "viability" of their IPO and more about general market conditions. Motley Fool execs were famous for saying conditions weren't right when the NASDAQ was in the 4000 range. Are they better now guys???

    Schmidt needs to IPO NOW, this market is already moving into selloff range. Sentiment has changed now that everyone knows the Fed will raise rates in 2004 and the evacuation from stocks has begun.

  • by Alioth ( 221270 ) <no@spam> on Monday February 02, 2004 @12:34PM (#8159431) Journal
    It looks as if MS are shortly going to be along to destroy Google. Past experience shows that whenever MS bundle something with their OS (such as WMP, killing Real, or IE, killing Netscape), the competitor is doomed.

    If I were running Google, I'd be thinking of getting out of it right about now and starting something else. Sadly, just like Real, Netscape and others, Google will be quickly decimated by MS once they make their own search tools the default. MS understands human nature well - people generally don't want freedom, they just want safety and the path of least resistance.
  • This is the first time we can thank SCO for anything!!!
  • by sdcharle ( 631718 ) on Monday February 02, 2004 @12:51PM (#8159579) Journal
    There are still plenty of other ways to lose your shirt in the stock market.
  • Sounds like a prescription for keeping potential investors salivating:
    1. start rumors of an IPO
    2. deny the rumors while alluding to the fact that your company's position is so cash-rich that you don't need to go public (thereby keeping investors very, very interested)
    3. go public later in the year with an inflated P/E ratio, just like the good ol' days back in the '90s.
    4. make boat-loads of $$
  • by dirc ( 254647 ) on Monday February 02, 2004 @02:50PM (#8160816) Homepage
    As several posters have pointed out, the statement that "market conditions are not right for an IPO" is just a smokescreen. As they say, the market conditions are the more favorable now than any time in the last 3 years, and with the Federal Reserve ready to start moving interest rates up after the November election, conditions are not like to get any better.

    Google is faced with a few problems, and a challenge:

    1. It is being dropped by Yahoo! as a its algorithmic search provider. This will have a minor effect on Google's revenue and profit.

    2. MSN is developing its own search engines (for paid advertisements and algorithmic search). While Slashdotters will deride Microsoft's efforts in these areas, it will be additional competition that Google cannot ignore.

    3. Out of the three biggest portals (Yahoo!, MSN and AOL), Google is supply advertisements to the least healthy one: AOL.

    4. Google realizes that algorithmic search is on the way to becoming a commodity. The difference in quality of the results is becoming minor. There is not a lot of money to be made there because people do not pay much to see or be seen in algorithmic results.

    5. The money is in the advertising results that are shown with the algorithmic results. (No, Virginia, there is no Santa Claus, and Google does make most of its money through ads.) There are two ways to get people to see those ads: get them to come directly to your own site, or get those advertisements to the sites that people visit. Most normal people (i.e., not people who read Slashdot) go to portals.

    So the challenge for Google is to become a portal. Becoming a portal means offering a lot of services beside "search in a box". It means news, chat rooms, music, games, auctions, free email, the list goes on and on. Google recognizes this. That is why it has added other products, such as news and free email. But building a portal from scratch takes a lot of time and money. If Google were planning to make itself into a portal, it would launch its IPO and use the money to build a portal.

    Which brings me to my theory. Some portal is negotiating with Google to buy Google. There are only two portals big enough: AOL and MSN. AOL is a declining portal, but it already has a deal with Google, and terms of that deal apparently include a partial ownership stake in Google if Google goes public. Microsoft has piles of cash, has missed chances to buy an algorithmic search engine in the past, and regrets that failure. It sure would be easier for Microsoft to buy Google than build another Google.

    In summary, my theory is that Microsoft is trying to buy Google, and Google is seriously considering accepting the offer. Microsoft wins by getting a terrific search engine and ad machine, and Google wins by getting a lot of money for its employees, a permanent partnership with best available portal, and the opportunity to stay focused on search.

    If it happens, the "popping" sound that you will hear all over America will be the heads of Slashdotters exploding when their favorite search engine is owned by their favorite villain.
  • Thank God. (Score:3, Informative)

    by localman ( 111171 ) on Monday February 02, 2004 @03:07PM (#8161119) Homepage
    Maybe they just realized how bad an idea it would be for them to go public. The news articles this week about Microsoft targeting them would have destroyed their stock price. And that's without any failure on their part at all. They would be tried and hanged in the court of public opinion overnight. They'd be left scrambling to boost their public image and they'd be forcibly led off track from making the best search engine in the world.

    As it is (as a privately held company) they can take such news as information and plan carefully and intelligently. Sure they're concerned, sure the VC folks are telling them they need to watch out. But it's nothing like watching your company's valuation drop 60% overnight and be left with fear of lawsuits and hostile takeover based on rumors.

    Going public is way overrated.


1 Angstrom: measure of computer anxiety = 1000 nail-bytes