Topic: Is Google Greedy?

[Gambler]

Google: IPO Could Be Worth $3.3 Billion

LOS ANGELES (Reuters) - Google Inc., the world's No. 1 Web search provider, said on Monday its highly anticipated initial public offer could be worth as much as $3.3 billion as it prices its stock in a range that could value the company at more than $36 billion.

Investors were startled by a price range of up to $135 per share. That would give Google a valuation, on the basis of its price to 2003 earnings ratio of 329, more than twice that of its closest competitor, Yahoo Inc. (NasdaqNM:YHOO - News). The S&P 500 had a 2003 price-to-earnings ratio, in comparison, of more than 20.

"Has there ever been one higher? I hate to say this ... but the thing is becoming somewhat like a circus," said Mark Herskovitz, manager of Dreyfus Premier Technology Growth Fund, who gasped when told the potential IPO price.

According to Thomson Financial, at $3.3 billion, Google would rank as the eighth-largest IPO by a U.S. company. The IPO is expected to take place next month. The search engine's name has been transformed into a verb for looking up information.

Its size and strength have pushed Microsoft Corp. (NasdaqNM:MSFT - News) into efforts to develop its own search technology.

But Google's very size could set it up for a fall.

"In a deal like that where it's priced for perfection, anything that occurs that isn't right on the number, you get hammered," said Jim Huguet, chief executive officer of Great Companies LLC. The Florida company manages $230 million in technology shares.

Of the thousands of public companies in the United States, barely more than a dozen have prices above $100 per share and trade at least 10,000 shares a day. As of mid-afternoon Monday, none of the Nasdaq-100 stocks (NasdaqSC:^NDX - News) or the components of the Morgan Stanley High Tech Index (AMEX:^MSH - News) traded over $90 a share.

GOOGLE LOVES YOU BUT NOT ENOUGH

While Google, which will trade on the Nasdaq under the symbol "GOOG," is offering Class A shares, its founders and other executives will hold large blocks of Class B shares, which hold 10 votes each. That stood in contrast to the company's idealism -- its motto is "Do no evil."

"So it's like 'we love you but not enough to give you the same vote as we've got,"' Dreyfus's Herskovitz said.

Google founders Sergey Brin and Larry Page will each own about 16 percent of Google's voting power after the offering. Brin plans to sell 962,226 shares, and Page is expected to sell 964,830 shares in the IPO.

Brin, Page, Chief Executive Eric Schmidt, and board members John Doerr and Michael Moritz will have between them just over 55 percent of the company's voting power.

Among selling stockholders, Time Warner Inc.'s (NYSE:TWX - News) America Online unit and Yahoo both plan to sell 10 percent of their stakes in the IPO, including 743,745 shares by AOL and 549,888 by Yahoo, according to the prospectus.

About 24.6 million shares would be sold in the IPO for between $108 and $135 apiece, according to an amended prospectus filed with the Securities and Exchange Commission.

Mountain View, California-based Google plans to sell 14.1 million shares, while another 10.5 million would be sold by shareholders.

The company plans to use net proceeds, estimated to be $1.66 billion, for general corporate purposes. It will not receive any proceeds from shares sold by selling stockholders.

Separately, the SEC notified Google's general counsel that its staff will recommend a civil injunction against him for purported violations of securities law. Google said its general counsel, David Drummond, received the notice last week and that it relates to his tenure as a senior executive at another company.

Google also posted second-quarter results in the amended prospectus, with earnings up to $79.1 million from $64 million in the first quarter. Revenue jumped 7.5 percent to $700.2 million from $651.6 million. Operating income increased to $171 million from $155.3 million in the first quarter.

A group of 28 underwriters, led by Morgan Stanley and Credit Suisse First Boston, will have the option to buy another 3.7 million Class A shares in the IPO. RBC Capital Markets Corp. and SunTrust Robinson Humphrey were no longer listed as underwriters of the offering.

What gets me is the two classes of shares essentially keeping Joe Public out of any power in the company.

[Sirgod]

Just imagine how high the StockMarket will rise Next month.

The economy looks good to me.

Stephen

[Iceman]

I hope to god they don't flop, it would be terrible.

[Sirgod]

I agree, We all wouldn't know what to do without Google.

Stephen

[Brush Wolf]

Google: IPO Could Be Worth $3.3 Billion

What gets me is the two classes of shares essentially keeping Joe Public out of any power in the company.

I would think this is to make the takeover of the company as hard as possible and I would think that the rules for selling those class B shares are going to be rather strict. I think that if you check it out that you will find that Joe Average as little or no clout in many publicly traded stocks. Tyson and Wal Mart for example are set up in such a way that certain key people (family and friends) will always have the majority block when anything is voted on.

[RogueJedi_XC]

They've said from the very beginning that they did not want to give up control of the company to the public; they want the benifits of a privately help partnership (i.e. tighter control, more focus on long term goals, more profits in a few hands, etc) and the benefits of a publicly held company (i.e more money).
I don't blame them. Look what the short-sighted profiteering in Corporate America hath wrought -- Enron, AT&T Worldnet, et. al.

This is no surprise. Personally, I wish I had $5,000. I would not hesitate to make a long-term investment...

[Just plain old Punisher]

Does joe public have the first idea on running a internet search engine?

[Gambler]

Well, they finally made it public and a few of the big dogs are now billionaires.

I think my initial observation about the greed of those people may be accurate.

Google governance ranked low by adviser ISS - FT

NEW YORK, Aug 23 (Reuters) - Google Inc. (NasdaqNM:GOOG - News) ranks lower in corporate governance than any company in the Standard & Poor's 500 stock index (CBOE:^SPX - News), according to influential proxy adviser Institutional Shareholder Services, the Financial Times said on Monday.

ISS, which advises shareholders on how to vote, found 21 weaknesses in the governance practices of Mountain View, California-based Google, which is expected to join the S&P 500, the newspaper said.

These flaws, it said, include a dual-class capital structure that gives effective control to insiders, too few outside directors, a lack of stock ownership guidelines for executives and independent directors, a compensation plan that lets the company reprice stock options if the stock price falls, and loans to company insiders.

The proxy adviser assigned Google, the world's leading Web search engine, a corporate governance quotient of 0.2 out of a possible 100, the newspaper said.

"I'd say those numbers sound pretty darn evil," Patrick McGurn, ISS's senior vice president, told the newspaper.

A Google slogan is "Don't Be Evil".

Google and ISS did not immediately return calls seeking comment.

Google made a long-awaited initial public offering last Wednesday. Its shares closed Friday on the Nasdaq at $108.31, or 27 percent above their $85 offering price. The company's market capitalization now exceeds $29 billion.

The U.S. Securities and Exchange Commission has started an informal inquiry into Google's offer to buy back 23.2 million shares it may have issued illegally.

Separately, Google has said the SEC may pursue civil remedies against the company's general counsel for securities law violations related to his prior job.

In addition, the SEC has requested additional information on a Playboy magazine interview with Google founders Sergey Brin and Larry Page. The company has said it does not believe the interview, which took place before it filed to conduct its IPO, violated U.S. securities rules.

ISS is based in Rockville, Maryland.

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It seems to me that for being pretty bright boys, they've had some serious bobbles lately.