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The Internet The Almighty Buck

Google Tries To Silence IPO Rumours 289

egoff writes "Google has put off an IPO for now, saying "Thus far, laziness has always won out. There are so many better things to do." The New York Post suggests that Google's focus on R&D doesn't really mesh with the financial accountability of a publicly traded company. However, many analysts believe a successfully Google IPO could rejuvenate Internet-company investments."
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Google Tries To Silence IPO Rumours

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  • by zeoslap ( 190553 ) on Monday March 31, 2003 @12:48PM (#5632018) Homepage
    It's a little sad that this guy thinks the entire sector hinges on this one company. IPOs while all well and good invariably change the nature of the beast which in Googles case would be a sad sad thing. Stay private, make your employees and customers happy and be your own man.
    • by Polo ( 30659 ) on Monday March 31, 2003 @01:19PM (#5632221) Homepage
      Actually, I wonder if the employees would be happier with an IPO.

      I believe Microsoft didn't go public for a long time until internal pressure forced the issue because the employees wanted their stock to be worth something.

      Of course, maybe the pressure to "cash out" might be different if you're working at company that primarily does R&D like Google. It would probably be a unique experience, and more so in today's economy.
      • by Dominic_Mazzoni ( 125164 ) on Monday March 31, 2003 @01:38PM (#5632320) Homepage
        Actually, I wonder if the employees would be happier with an IPO.

        I believe Microsoft didn't go public for a long time until internal pressure forced the issue because the employees wanted their stock to be worth something.


        I doubt that most of their employees want an IPO. The way the economy is today, they should feel very lucky for what they have: good salaries, job security, incredible benefits (games, massages, free snacks, and a grand piano), and the satisfaction of working for a company they believe in.

        When the economy picks up again, there'll probably be more employee pressure. I hope not: I think that the main reason Google hasn't sold out yet is that they don't have to answer to anyone. Once shareholders are in control, there's a much bigger chance that they'll eventually stop doing what's right, and start maximizing profits.
        • Quick quibble: shareholders are already in control (and always are) they're just different shareholders with different goals than would be the case if Google went public.
        • Of course, since the company was funded by Kleiner Perkins and Sequioa (ultra-establishment venture capital firms), the pressure to make the equity liquid comes from more than just the employees. With firms like KPCB involved, the decision on when to go public will be made on purely financial grounds... nothing to do with how soft and fuzzy it makes the employees feel.
        • by swb ( 14022 ) on Monday March 31, 2003 @02:42PM (#5632610)
          incredible benefits (games, massages, free snacks, and a grand piano)

          Those are bullshit benefits that any company could provide for the cost of an exec's car compensation, and only appeal to twentysomethings still rebelling against mom & dad's "no junkfood" rules.

          Incredible benefits would be in-building healthcare clinics, a childcare center, a credit union and maybe a post office or mailing center, a decent cafeteria, along with generous time-off and flex-time (I'm sure they have this kind of arrangement already). These are the kinds of resources adults need but have a hard time getting access to due to operating hours and work hours not always meshing.

      • If they don't have enough cash or cashflow to grow the company, they should IPO to get some. A Google IPO would probably be a very cheap source of capital.

        If they have buckets of cashflow, they can pay a dividend on their private stock to increase its current worth to employees. Employees who just want to flip their private stock in the public market so they can leave the company, are probably not a long term asset for Google.

        If they have neither, then they can do nothing. Often inaction is a valid cho
    • by burgburgburg ( 574866 ) <splisken06.email@com> on Monday March 31, 2003 @01:21PM (#5632234)
      "The New York Post suggests" doesn't really inspire that much confidence.

      Wacky headlines and sports coverage, however, are their forte.

  • I'd like some (Score:5, Interesting)

    by lindsayt ( 210755 ) on Monday March 31, 2003 @12:49PM (#5632024)
    I think a lot of techies would jump at the chance to buy google stock. However, there's a lot to be said for the freedom that being private gives them. I'd hate to see google turn into a big Evil corporation...

    BTW, I think I'm fp.
  • Obligatory (Score:5, Funny)

    by telstar ( 236404 ) on Monday March 31, 2003 @12:50PM (#5632027)
    It had to be done:

    Google IPO [google.com]
  • by Erwos ( 553607 ) on Monday March 31, 2003 @12:50PM (#5632030)
    Google shouldn't bother with an IPO unless it becomes really apparent they need one. Money ain't everything, and if the employees are happy with the way things are now, why bother?

    Certainly, R&D will suffer if an IPO happens and the focus of the company becomes delivering the almighty dollar to investors. However, if they find their good employees leaving for greener pastures (ie, more money), it might be time for that IPO to raise funds to keep them.

    -Erwos
  • You may not make as much cash as you would from a successful IPO. However, you're only accountable to a few owners instead of 10's of thousands of owners.
  • Yay (Score:4, Funny)

    by B3ryllium ( 571199 ) on Monday March 31, 2003 @12:51PM (#5632036) Homepage
    This just in: new socks could rejuvenated my sock drawer!

    I'd buy a google IPO if I had any money, but ... I think their QoS would go waaay downhill :(
  • by davejenkins ( 99111 ) <slashdot@NOspAm.davejenkins.com> on Monday March 31, 2003 @12:52PM (#5632045) Homepage
    Q:What does the richest private company in the world do?
    A: Anything it wants.

    When a company seeks a wide consumer base, especially from the financial sector itself, it makes sense to go public. However, when a company is heavy on R&D, needs to be nimble, and supplies directly to other corporations, there is no _need_ to go public.
    • Tell that to Bill Gates and Company.
      • by davejenkins ( 99111 ) <slashdot@NOspAm.davejenkins.com> on Monday March 31, 2003 @01:20PM (#5632225) Homepage
        Tell that to Bill Gates and Company.

        Well, if you think that M$ is rich because of their stock price, you're grasp of economics is slim.

        M$ got it's riches from lucrative licesnsing deals and then a monopolistic position in the marketplace. Their stock price is actually a security liability to them, and much of their 'wealth' is virtual (in options unable to be excersized): witness Gates' loss of billions in equity when their stock took a fall a couple of years back. One could argue that he would have just as much 'actual' wealth if they never took the company public...

        The employees were lured with huge options-- which does help get good talent when the price is going up. However, that was before the bubble popped-- there is no such illusion now, therefore there is no cache in the options.
    • by squaretorus ( 459130 ) on Monday March 31, 2003 @01:10PM (#5632167) Homepage Journal
      Private companies rule! Stock market pressures have knackered so many decent companies because their focus shifts from TRUE value to PERCEIVED value.

      Its the same in politics and war mongering now - better to be SEEN to be doing good than to actually do any good.

      Stay private google. Please
    • by Ars-Fartsica ( 166957 ) on Monday March 31, 2003 @01:22PM (#5632239)
      It is too late for Google to be "free" - they are already beholden to the masters of greed - the Bay Area venture capital industry. Rest assured that Kleiner and Sequoia will put this baby on the market when its ripe. This is what they do. They do not feed the poor or care about your search results. They care about making a lot of cash. They need a Google IPO to rebuild the gutted venture market. They are not waiting out of goodwill - they are waiting until the pig is ready to be slaughtered.
      • It is too late for Google to be "free" - they are already beholden to the masters of greed... They are not waiting out of goodwill - they are waiting until the pig is ready to be slaughtered.

        I cannot argue with your observations at face value. They are essentially correct. And yet I feel the need to counter your dark outlook. Isn't it funny that these greedy butchers decided to make their fortunes by giving us a really useful, superior, and inoffensive alternative to the other search engines? Maybe "
      • by enjo13 ( 444114 ) on Monday March 31, 2003 @03:47PM (#5633190) Homepage
        The goal of venture capitilists (as you say) is to make money. However, it is not nececesarily to take a company public. Every quality VC firm has a stable of private companies that serve as dependable cash producers. Once a company is public, the worth of the company to shareholders is in the stock value. This represents risk to the VC portfolio, as the stock price is not necceasrily a rational measure of business success. As a private company, the value of the company to the share holder is primarily through the dividends the shares pay.. which is much less risky as it solely depends on the performance of the company.

        A common financial strategy for VC's to employ is to keep a company like Google (assuming that is particularly profitable)private, as a hedge against volatility in the market.
    • Microsoft was one company that waited a very long time before going public. This is one reason why it is the founders who are still in control today.
  • by FortKnox ( 169099 ) on Monday March 31, 2003 @12:52PM (#5632047) Homepage Journal
    However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments

    And an unsuccessful Google IPO could make things worse.
    With the war and the volitality of the market right now, I say "Stay Lazy for a While Longer, Google!"
  • Yikes (Score:5, Funny)

    by flynt ( 248848 ) on Monday March 31, 2003 @12:52PM (#5632048)
    However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments.

    There are more grammatical disagreements in that sentence than I've had good days!
    • Re:Yikes (Score:5, Funny)

      by The AtomicPunk ( 450829 ) on Monday March 31, 2003 @01:07PM (#5632150)
      It was suggested a while back that editors reject articles with poor grammar. Unfortunately, they decided it wasn't feasible because the editors couldn't come up with any reasonable way for them to figure out if a submission had good grammar. :)
      • Re:Yikes (Score:3, Funny)

        by tunah ( 530328 )
        Well, given slashdotters' treatment of linked articles, reading doesn't really seem a reasonable way, does it? ;-)
  • by digitalsushi ( 137809 ) <slashdot@digitalsushi.com> on Monday March 31, 2003 @12:53PM (#5632052) Journal
    Let me ask one of those laymen/borderline stupid questions that are insightful as long as someone answers it. If google does an IPO and becomes a publically traded company, in time that will make them suck, right? Cause then they'll have to listen to investors? Do companies ever go "we dont care what the investors want. We will do what pleases us, not them."
    • Re:So... (Score:5, Insightful)

      by nagora ( 177841 ) on Monday March 31, 2003 @01:01PM (#5632113)
      Do companies ever go "we dont care what the investors want. We will do what pleases us, not them."

      It's illegal; companies have to act in the interests of the shareholders and the shareholders get to vote on what that interest is. If they vote that Google needs to break into the pork-belly market then the management have to do it. If they don't and they can't show that it would have harmed the shareholders to try then they can be prosecuted. Regardless, they are likely to get sacked at the next AGM for defying the shareholders.

      TWW

    • Re:So... (Score:4, Informative)

      by Orne ( 144925 ) on Monday March 31, 2003 @01:24PM (#5632252) Homepage
      Q: Do companies ever go "we dont care what the investors want. We will do what pleases us, not them."

      All the time.

      "Going Public" basically means that you, the owner, are offering a percentage ownership to the public in exchange for the public's money. On the plus side, you get a fresh infusion of money to do research, increase inventories, hire more employees, etc. On the flip side, you are now responsible to the investors to keep the company profitable, and every now and then kick back a slice of your earnings to your investors as dividends.

      Shareholder rights are managed like a pure democracy -- majority rules. This is why you usually see that "Pres So-and-so" owns 51% of the stock in the company... so their vote can always override whatever the public decides, providing that they disagree with the public. This is where stock options have an effect; directors giving themselves gobs of company stock in place of salary.

      Now, it's not a good idea to piss off your investors, because they'll just turn and sell your stock, and you have to pay that capital back. That's why there are quarterly reports (you know, those big books you throw away every 3 months) that tell the public the state of the company, and whether your staff is doing a good job making money (price to earnings ratio). And, like most of the IPOs of the late 90s, your up the creek if that investment capital is your operations budget, and people want their money back, because then *poof* you're bankrupt.
      • Re:So... (Score:2, Informative)

        by Anonymous Coward
        And, like most of the IPOs of the late 90s, your up the creek if that investment capital is your operations budget, and people want their money back, because then *poof* you're bankrupt.

        What the heck is this? No company is ever obliged to redeem their shares for cash. People who want to sell their shares sell them on the public market, to other people, not back to the company itself. That's what the stock market is about.

        People "wanting their money back" from stocks has no effect on a company's bottom
  • Just you wait (Score:5, Insightful)

    by ccnull ( 607939 ) <<null> <at> <filmcritic.com>> on Monday March 31, 2003 @12:53PM (#5632059) Homepage
    A Google IPO is inevitable -- but Sergey Brin (the brains behind the company) is not going to be the one that spearheads an IPO, it'll be Eric Schmidt, former Novell CEO and current Google boss.

    Also, in the short run, though Brin says laziness always wins out, in the long run, it's greed that always does the winning.
    • A Google IPO is inevitable

      Inevitable? I don't think so. There are some pretty big companies out there that are privately held, e.g. DHL. Whether Google IPOs is going to depend on the people involved and what they want. And even if Schmidt really is in favor of the idea, it's still possible that he'll get ousted before any such move occurs.
    • An IPO is basically selling part of your ownership in a company for money. As with any stock, if you think the company will be worth more money in the future, and you don't need the money you'd get from the sale, you are better off not doing it.

      Putting off an IPO can be the greedy thing to do.

    • "A Google IPO is inevitable."

      I am going to have to disagree here. From what I have seen, Google is not a company with huge (IE potentially disastrous) type dreams of putting search engine capability into your refrigerator. As such, they do not need IPO type cash to finance their operations. Google is very focused on being a search company, and while it has branched out into research, catalog indexing, etc... it has all fit into its main strength- searching. When I think of companies going public, I see
  • Google. (Score:5, Interesting)

    by sporty ( 27564 ) on Monday March 31, 2003 @12:54PM (#5632062) Homepage
    Google, amazon.com and pets.com, do something VERY well. Google does searching, amazon.com and pets.com sold pet stuff. One out of the two sales sites survived. Google doesn't have much in the way of multiple forms of revenue. They have a search appliance, yahoo-like searech contracts and ad services and possibly other minor services.

    If inktomi comes around and does something better than google, google will turn over and die unless it can one-up inktomi.

    Amazon survives because it sells physical things, and not services (contracts/licenses). It's also the bigger sales company. If you dont' buy a segway, it won't go out of biz. If you don't by electronics, it has other revenues in other areas of merchandise.

    Google NOT IPO'ing has its strengths. No investors to try and please. Being public means you are even more watched than ever, since you now have shareholders. If one scandle comes about, GOGL (google) could tank.

    Sometimes, it's easier to be a humble celebrity than a flashy one.
    • Re:Google. (Score:3, Insightful)

      by lindsayt ( 210755 )
      I would argue that pets.com did not do anything VERY well - I was a former customer of theirs, and I can assure you they were bound for trouble, based on my experience. My wife and I got a coupon (ironically from amazon.com, I think) worth $20 of free stuff with free shipping from pets.com, with no requirement to buy anything. So we bought a couple toys for our cats. They arrived the next day in a gigantic box - literally big enough to fit a mid-sized dorm refrigerator in (you know, the little 4.4 cu. ft
  • Why the hell are they assuming that one company's successfull business plan automatically means that every one else in the same industry has a financially sound plan?
  • by MoeMoe ( 659154 ) on Monday March 31, 2003 @12:56PM (#5632074)
    Remember those days when IBM and Cisco were selling at the IPO, where one little piece of paper like that would return you millions of dollars in your later years if you would have just bought it? WELL I DON'T! I'm only 20 for CwbyNeal's sake! Now-a-days you have penny stocks from companies that crumble like flies! Forgive me, I hear the calls of the bears in the horizon....

    Seriously though, companies like Google are such amazing innovations that it's hard not to want just a small piece of it, yet at the same time there is so much corporate internet garbage flooding Wall St. that it makes you think twice.
  • by Wattsman ( 75726 ) on Monday March 31, 2003 @12:56PM (#5632075)
    The statement the NYPost made about investors not being too interested in a pure R&D company is right. Investors want to see their money make money, right now. They don't want to wait 5 or 10 years for possible results (congrats to the 10-second sound bite generation). And even though it's making money now, if it misses the market forecast, the stock tanks.

    Here's a really telling part:
    "The sector really needs Google to go public," a veteran investment banker said.

    It's not those people who want Google to get more funding. It's everyone who lost money in when the Internet stocks collapsed. They're hoping that something like Google will go public, draw money into other Internet-related stocks (halo effect), and then take out their money for less of a loss.

    My US$0.02. Google seems to be doing fine without needing to get money from Joe Sixpack.
  • by The G ( 7787 ) on Monday March 31, 2003 @12:56PM (#5632077)
    Don't do it! Google is too good to be public, too innovative to be tied down to corporate short-termism and profit-seeking. Google is too clever, too innovative, too simple, and too sensible to survive the public sphere and its short-term-profit-at-any-cost shit-where-you-eat demands.

    Google is better with its current benevolent dictatorship than with a democracy of ignorant stockholders.

    That said, if they do IPO, I know I'll be among many others asking, where can I get some?
    --G
    • Ultimately the owners of the company will decide if it goes public. Venture Capital firms are not in it to make the world a better place. They are in it to make a lot of cash. When the time is right you can be assured that the Venture firms will hold back funding and request Google go public. That is their business model kids. This is where they get the money to go back and fund the company that will kill Google, and the company that will kill that one..etc etc etc.
    • Google will not survive an IPO yet you still want to buy stock in it if it does IPO?


      Y'know, it's really beyond me how that whole internet bubble thing occurred.


      Rich

  • IPO v. Censorship (Score:3, Interesting)

    by onthefenceman ( 640213 ) <szoepf.hotmail@com> on Monday March 31, 2003 @12:56PM (#5632080)
    It'd be interesting to see if going public brings Google Censorship [slashdot.org] to a shareholder vote...
  • A big question would be: "What would Google gain by going public?"

    Most companies go public when they need to raise immediate cash. For example, Company XYZ wants to launch a new product, but it will take 20 million to set up the equipment and such to do it. Since they can't just increase sales, they have to find investors. They could do it in private, and solicit people individually, but that's why the stock exchanges were created in the first place -- for the free exchange of investments in one centra
  • Absolutely (Score:5, Interesting)

    by pheph ( 234655 ) on Monday March 31, 2003 @12:57PM (#5632087) Homepage
    I, for one, have believed Google will be going IPO for several months, between overzealous aggression against similiar domain names [gewgle.com], patenting their search algorhythm [slashdot.org], and other [slashdot.org] odd [slashdot.org] actions [slashdot.org], I just don't know what to think anymore :( ... Good bye the Google we all used to love...
  • by Nexum ( 516661 )
    However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments.

    However, many english teachers believe a succesfully readed slashdot articles could rejuvenated the art of grammar.
  • However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments.

    Umm, you mean "could destroy the one internet company whose business model wasn't dependent on overvaluation." Google is successful because they eschewed the cash-cow growth models that other internet firms depended on. Instead they focused on the quality of their product. My sense is that injecting a few hundred million dollars of strings-attached funding into the life-cycle of a software project is
  • In the latest chapter of Google protecting their trademark, they even asked the dictionary folks at Wordspy [wordspy.com] to change [linguistlist.org] their definition [wordspy.com] of the word "google" to prevent it from becoming a generic word. All this has caused mixed reactions [quicktopic.com] and lots of news coverage by microdocs [microdocs-news.info] (formerly Google Village [googlevillage.info]), Search Engine Watch [searchenginewatch.com], and Internet.com [internet.com]. Their latest target seems to be the Google Web APIs [google.com]-based automated search service Googlert [googlert.com], who changed their name to "Google Alert [googlealert.com]" and explain [googlealert.com] that they were asked "pol
    • Indeed. The trademark is clearly the motivation IPO. However, other forces are at work.

      The Race Masters from planet Zoltar wish to manipulate Google and send subliminal messages to billions of unsuspecting food beasts. To do this they must gain control of the Google Master Facilities. Once Google is vulnerable to the Zionist stock market, the RM consortium will step in, replace the Google staff and begin manipulating.

      Don't be surprised if you begin to feel slack jawed and bovine, and perhaps even crav
  • p> However, many analysts believe a successfully Google IPO could (sic)rejuvenated Internet-company investments.

    You mean rejuvenate over-valued internet-company investments. Am I the only one who paid $85 for Palm stock? No way I'm falling for that one again.

  • by DG ( 989 ) on Monday March 31, 2003 @01:02PM (#5632116) Homepage Journal
    (slightly off topic)

    Isn't the stock market, at least the way it is operated these days, more of a scam than an investment?

    Perhaps some business major can explain this to me.

    As I see it, here's the problem:

    1) I buy x shares of stock in SomeCompany, at some price n.

    2) I want to sell this stock at some point in the future for some price y > n.

    3) In order for the price of the stock to increase, it must be "worth more".

    4) Assuming no further stock is issued and that I purchase no additional stock, that means my stock constitutes a fixed percentage "ownership" in the company.

    5) Given that my percentage ownership is fixed, in order for the stock to be worth more at some time in the future, the value (read: size) of the company must grow.

    Well, that's fine and dandy for a small company, but that seems to assume that any given company will grow without bounds pretty much forever (especially when we start talking about options)

    But the "economy" is a bounded system. Those bounds may be high, but they DO exist. So the fundamental premise of "stock price increases with time" seems fundamentally flawed to me. What do you do with a successful company that produces a flat amount of profit each year, and does not seek to grow?

    Now DIVIDENDS, THAT I understand. I own some share q of the company, the company produces w amount of profit, so I'm entitled to a dividend w/q - that makes sense.

    But this whole speculation thing I just cannot wrap my head around. It looks like a pyramid scheme (with a gentle slope) to me.

    Somebody want to explain?

    DG

    • by ReidMaynard ( 161608 ) on Monday March 31, 2003 @01:08PM (#5632156) Homepage
      revised #3

      3) In order for the price of the stock to increase, buyers must be willing to pay more.

      This can be based on anything, as we have seen in the 1990's.

  • Once they start down the IPO road, there's going to be demands the they start making money not by creating something that's useful, but by something that appears to be useful. Stuff that sells, or if it doesn't sell, it at least looks good in CBA meetings with MBAs. Endless personalization, tracking based on user profiles, custom emails, etc.

    All of that sucks up design time and development time that could be spent on better things.

  • by dietlein ( 191439 ) <(dietlein) (at) (gmail.com)> on Monday March 31, 2003 @01:03PM (#5632125)
    However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments.

    A little excited about the 'ly' and 'd'?
  • A successful PayPal IPO didn't rejuvenate it...
  • by fruscica ( 637745 ) on Monday March 31, 2003 @01:04PM (#5632134) Homepage Journal
    Online dating is big business. Consider:
    • 26M Americans visited an online dating site during 12/02

    • "Personals Comprise the Largest Paid Content Category on the Internet: According to a [12/02] study...the Personals category grew 387 percent to become the largest online paid content category among consumers in the third quarter of 2002, surpassing Business Content." (source: comScore Media Metrix)

    • "'I have 43 employees, and we'll bring in $43 million this year. That's $1 million per employee,' [uDate president Martin] Clifford said. 'We have zero cost of sales within our business...The margins are almost super-margins.'" (source: MSNBC.com)
    Google+Blogger is an ideal combination for serving this market.

    Once Google goes public, here's how I think Go_Ogle will happen:

    Soon, Google will improve the searchability of "blogspace" by making it easy for bloggers to annotate their blogs with information about themselves and their blogger friends. This information will be encoded in an RDF dialect called FOAF (Friend of a Friend).

    It will then dawn on people that the FOAF file is effectively a static online profile, while the associated blog is akin to a living profile (in the 'living document' sense).

    With this, Googling people will come to encompass both researching people you have met -- already a common practice -- and researching people you would like to meet.

    The upside potential of this, as introduced above, will prove too substantial for publicly held Google to ignore. (In addition, I believe leadership of the market for online matchmaking software is the gateway to early leadership of the market for lifelong learning and career services, which will be worth hundreds of trillions of dollars in the coming decades. Toward understanding the relationship between the two markets, consider: according to a recent American Demographics survey, couples in the U.S. meet primarily at work (36%) or school (27%). More on 'online dating software -> LLCS' here [opportunityservices.com] ).

    Google will then acquire the best makers of RDF query tools and launch Go_Ogle, the mother of all online dating sites.

    Thoughts?

  • Well, in the days of the disasters known as Worldcom and Enron, here is a company (Google) that has money that the bankers and stockbrokers can't whore, pump up the stock price, and get out while the gettin' is good by selling off to an unsuspecting public.

    Google, please please just continue to do good things. And stay private.

    And, no, I am not just being cynical.
  • by swngnmonk ( 210826 ) on Monday March 31, 2003 @01:04PM (#5632136) Homepage
    IPO's are simply a way for the company to raise money, in exchange for (partial) public ownership of the company. The fact that insiders usually get rich in the process is incidental, but Silicon Valley has now been operating for years on the idea that this is how you get paid when you're a rank-n-file employee at a startup.

    Microsoft's IPO in 1986 is an interesting case - they were dragged to the IPO kicking & screaming. Think about it - Apple started in 1976 and IPO'ed in 1981 (at the time, one of the most successful IPOs in history). Microsoft started in 1975, and still hadn't IPO'ed by 1986. So what made them do it? Their employees had been using their vested options in lieu of cash when buying houses, cars, etc. For a privately held company, that's completely illegal, and as a result, the SEC forced them to go public. Even at that point, Microsoft didn't need to raise capital publically, BillG and company wanted to retain complete control of the company.

  • "The sector really needs Google to go public," a veteran investment banker said. "I don't think the market conditions matter."

    So which sector is he talking about? The investment banking sector?

    • So which sector is he talking about? The investment banking sector?

      Yes. The washed up, middle aged, "missed the .com boom" investment banker sector.

      WTF is a "sector" anyhow? Google is a collection of NOCs with a bunch of almost racked PeeCee boxen herded by some R&D geeks. It could be cloned in short order with a minuscule amount of capital. There is no investment value here. How does this constitute a "sector."

      F*cking money pundits. They dream their warped little dreams and spew it to the publ
  • The NYPost is not exactly known for its award winning journalism, if you need business news, I would stick to the Wall Street Journal [wsj.com] or IBD [ibd.com]. If your looking for news on the latest J-Lo gossip, use the NYpost.
  • by Ars-Fartsica ( 166957 ) on Monday March 31, 2003 @01:13PM (#5632184)
    Don't tell this to IBM, Microsoft, Intel, Merck, Pfizer...all of which spend a hundred times what Google does on R&D.

    They don't want to go public because they don't have to, period. Their venture funding still has miles to go.

  • Google IPO could rejuvenated Internet-company investments.

    OMG. Please, lets not piss away a good thing on some vague notion of how IPOing Google and having the stock price balloon for two days is going to turn anything around. The simps that promulgate such things are the very same people the created the .com bubble in the first place.

    Post IPO Google would be subject to a board. These folks, recognizing the "vast marketing potential," will have more pop-ups flying around then you can even imagine. Th
  • "Google's focus on R&D doesn't really mesh with the financial accountability of a publicly traded company"

    "Modern shareholders are chickenshit squatters who care more about their liqudity of their portfolio then they do about the future of the company or its products."

    True innovation and really new developments will always come from small business, where commitee thinking is almost non existant and against the grain geniuses are considered an asset and not dangerous dead wood.

    As soon as the head of a company gets his eyes on the prize of some arbitrarily huge number of lucrative options, you can pretty much forget about taking risks. Every company I've worked for that's gone IPO has very suddenly switched into maintenance mode, treading water in a market they were breaking records in with a casual sidestroke. Red tape increases and so does the ratio of useful hours to administrative BS. And strong, brave CEOs easily cave under the heel of a room full of industry delphis with the power to fire indiscriminately.

    Product failures mean firings of smart people to appease the same. And there's always the chance that some rogue company with a discordant worldview will take you over, complete with more firings for "redundancy" and to afford bullshit multi million dollar "Good Faith" payments. Can you imagine Google owned by Inktomi...or Slashdot owned by Microsoft?

    Google doesn't seem to be struggling. They have the position and the clout to manipulate the fund -- repay -- fund cycle necessary to afford new development. So who cares if you want a framed Google OneShare [oneshare.com]?

    This is better for you. It's better for us. It's better for them. (With all due respect to Cap. K)
    • Having worked for both, I agre. Privately held companies are driven by one thing: Generating Profit. Publicly traded companies are driven by something else: Stock Price.
      Publicly traded companies change thier focus from development of newer/better/cheaper product or service, to generating press releases showing partnerships with other publicly traded companies that may or may not actually have a worthwhile product/service. Publicly traded companies are just fine with skipping a partnership and announcing lay
  • by legLess ( 127550 ) on Monday March 31, 2003 @01:15PM (#5632195) Journal
    However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments.
    Here's the full text:
    However, many [former] analysts [polled at the local homeless shelter] believe a successfully Google IPO could rejuvenated Internet-company investments. "It'll be a brand-new economy!" they said. "Based on unshakeable principles of eternal growth, eyeballs, mindshare and synergy. Oh, God, please give us one more chance!"
  • "However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments."

    Yes, but many analysts also believe that a solid understansing of the English language and grammatical profeciency are even more important...

  • LOL! (Score:5, Funny)

    by Boss, Pointy Haired ( 537010 ) on Monday March 31, 2003 @01:21PM (#5632231)
    However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments.

    I think the last 4 years have proved that analysts know shit.
  • by MORTAR_COMBAT! ( 589963 ) on Monday March 31, 2003 @01:22PM (#5632241)
    What does Google really sell?

    Answers:
    1. Intranet search appliances
    2. Search hosting solutions

    To be a successful publicly traded company, Google would need to sustain year-to-year growth, year after year, etc, etc. They are not selling the kinds of things which support that goal.

    Personally I would keep Google privately held. What are they going to do with more capital, anyways?
    • Thats a good point. I think Google is great, but other than being a "search" company and having "news" they don't do anything like say... Yahoo who has all kinds of things like free email, groups, chat, web hosting, etc... all things that can keep a larger group of people coming and paying you more.

      Although if Google started offering services like Yahoo, but would stay true to the "google way" I think I'd be down to try a Google Chat Client or a Google Group.
  • "...However, many analysts believe a successfully Google IPO could rejuvenated Internet-company investments."
    or, it would kill off the best search engine around thus far.
  • by Qwest94 ( 512718 ) on Monday March 31, 2003 @01:27PM (#5632275)
    Whether Google goes public or not is less a question of whether it makes sense for them to stay private--clearly staying private has many many benefits strategically (treat employees better, don't have to disclose financials, not beholden to quarterly results), and such a private company could produce enough cash for the founders to live very comfortable lives. The real driver of a push to go public will be the venture capitalists that invested in Google. They have to get their investments liquid so that they can return money to their limited partners. These VCs likely have the voting power and/or legal clauses in their investment documents to force Google to go public, whether the management wants to or not.
  • other than a cash out . . . what reason does google really have for an IPO? what do they care about reviving the IPO market?

    to answer the first, NO LEGITIMATE REASON. speaking as an entrepreneur, one of the greatest rewards of owning a (i like to think for myself as well) successful business is the control over one's own life that accompanies the independence of private ownership. when you go public, you must answer to the market as a whole and your major investors one a time to justify your business

  • Google is one of the best things about using the Web right now; reasonably accurate search results, simple design that keeps loading time/bandwidth down, NO POPUPS, and useful free addons such as the Google API and all of the trinkets it exposes.

    If the company goes public (or should I say "goes .com"?), except all of these to change. Maybe not overnight, but they will change.

    And all so some investors who aren't tired of the pump-n-dump can try to make a few bucks.

    Jay (=
    (who longs for the good old days wh
  • by Agar ( 105254 ) on Monday March 31, 2003 @01:42PM (#5632345)
    Besides R&D costs and the market's focus on short term results, Google needs to remain private to retain its very employee-focused culture. See this long list of benefits [google.com] for employees. Very impressive, but not costs that Wall Street analysts would have much patience for.

    In a strong market, employees will see more potential upside to their stock, and will be willing to trade a great culture for riches. But today, Googlers are happy with a job, ecstatic with the free meals, and are willing to bank on the currency being valuable (maybe even worth more) later.

  • Going private (Score:3, Informative)

    by Animats ( 122034 ) on Monday March 31, 2003 @01:57PM (#5632395) Homepage
    Much of this depends on the details of the agreement between Google and their venture capitalists. But the founders may well have good terms, because they started small and grew while profitable. They didn't have to go for a second round when in trouble.

    It's entirely possible that the founders might take on debt and go private. Interest rates are so low right now that's a very real option.

    As for "rejuvenating the market", Google just isn't very big. After all, it's almost fully automated.

    Any story that quotes a "financial analyst" as an anonymous source is probably bogus. They're not insiders here; they can speak publicly. The ones who like being on Squawk Box are best ignored, of course.

    We have years of depression ahead. Years. The market is still way overvalued. P/E ratios are still far too high. See the chart I put on Downside. [downside.com] for July 22, 2002. The bubble still hasn't fully deflated. Stocks have another 40% or so to fall to get back to normal P/E levels.

    Look at Japan, where the stock market has been in the tank for a decade now. That's happening to the US. The peak was three years ago, after all.

  • Why would anybody want to IPO their company?

    Consider the purpose of an IPO - in exchange for selling off part of the company, you get a temporary influx of capital.

    Unless you NEED capital, why do this?

    If you need capital, you can incur debt to get it. When you pay off the debt, you OWN your company.

    The only reason I see to IPO is for the company founders to make a quick buck off the IPO. Once they have done this, there is little incentive for them to stick around.

    Consider it like this: I just bought a
  • by sjbe ( 173966 ) on Monday March 31, 2003 @02:02PM (#5632418)
    The vast majority of the Fortune 500 companies were not venture capital financed. Most of them also did not go public at the earliest opportuntity. Quite frankly for a small company, going public is usually more of a distraction than a benefit. The important thing to think about is why would they need the cash from an IPO?

    I suspect Google does not need the money from equity financing. If they can fund all their business with cash from their ongoing operations and don't need equity financing for future growth opportunities, why would they want to go public? (other than greed) An IPO would be pretty much a cash grab at this point, not a useful strategy for growing the business.

    Google looks like it is a well run company but I don't really think it's clear that its future growth prospects are such that I'd be willing to purchase its stock. No, I think Google would be much better served by keeping their current path and focusing on developing their business. The company clearly has a great product, they have improved it steadily, and have done well by being focused on that. The growth expectations of equity investors could only hurt that focus at this point.
  • When exactly did the stock market turn into a bunch of fat white guys telling companies how to operate?

    I can remember a day when you invested in a company and let them do what they needed to stay afloat. Financial accountability? A company didn't USED to have to be financially accountable to shareholders, they could just take their money other places if they didn't like how things were going.

    IANAMA (I am not a market analyst) so someone tell me when exactly shareholders took over corporate america...I'd
  • by CowboyBob500 ( 580695 ) on Monday March 31, 2003 @02:46PM (#5632645) Homepage
    The company I work for went public a couple of years ago. Now it's going down the pan. It's all about projected sales. The sales force are making sales for software that isn't even written yet just so it can get on the balance sheet before the end of April. And some of the "customers" are expecting deliverables as soon as September.

    When it was a private company no-one had to sell anything until it was ready. We went from being R&D led to being sales led. We used to have great products. Now quality is suffering because of the drive to get everything out in time to make those sales figures look good. It can't and won't last. A successful company has been driven into the ground by the money men.

    Bob

    And no, I can't tell you who I work for ;-)
  • Anal...ysts (Score:4, Insightful)

    by Infonaut ( 96956 ) <infonaut@gmail.com> on Monday March 31, 2003 @05:04PM (#5633787) Homepage Journal
    "... many analysts believe a successfully Google IPO could rejuvenate Internet-company investments."

    Then again, many analysts are the same self-serving fucking morons who assisted the Dot-Bomb Economy.

  • by ottffssent ( 18387 ) on Monday March 31, 2003 @05:53PM (#5634182)
    "The New York Post suggests that Google's focus on R&D doesn't really mesh with the financial accountability of a publicly traded company."

    Phrased differently: "The NYP suggests that doing research to make a better product isn't financially sound for a publicly traded company."

    Or: "Companies investing in their future are seen as worthless by investors."

    Myopic MBAs with their heads in the sand kissing someone's ass are why Bell Labs got gutted. They are why US colleges stamp out more and more lawyers and fewer and fewer engineers. They are why not-CDs exist, why ReplayTV is out of business, and why it's illegal in Michigan to provide internet access to a school lab through a cable modem with 1 IP.

    Would you ever hear the following in a boardroom meeting?
    "Let's phase out our coal-fired plants and replace them with solar."
    "But sir, that would cost $100 billion!"
    "Who the fuck cares? We'll spend that in the next 10 years buying coal anyway - might as well buy solar panels instead."

    And won't you ever hear that? Back to the chickenshit MBAs. There's an enormous fusion reactor in our backyard that hits us with over 6.5 billion watts of energy per square mile and the MBAs would rather spend endless effort securing regulatory approval for another coal-fired plant or nuclear reactor than spend their money buying up plots of the cheapest land they can find in the middle of sunny Nevada.

    I've strayed a bit, so I'll sum up my point here. The same thinking that suggests Google abandon improving their product so they'll make more money is why we still burn things to make steam to run generators, why we have no base on the moon and barely have one in orbit, and why we're willing to spend $200 billion (yup, you heard that right) to bomb the shit out of some poor country unfortunate enough to be situated on top of a sea of hydrocarbon ooze.

    *takes breath* *steps off soapbox*

The price one pays for pursuing any profession, or calling, is an intimate knowledge of its ugly side. -- James Baldwin

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