Google geared for IPO

By Matt Whipp

Posted on 24 Oct 2003 at 11:38

The FT has reported that Google executives met with investment bankers last week to discuss how to take the company public as early as March next year.

Sources told the newspaper the meeting, led by Google CFO George Reyes, also picked the bankers' brains on the possibility of offering shares via electronic auction, which would give private investors the same rank as investment banks and fund managers in the bidding.

It would also prune back underwriter fees paid to the investment banks who have in the past been accused of setting the prices low for favoured clients, allowing them to quickly sell them on again at a profit as the value rockets in the buying frenzy of the first issue.

Conversely, investment bankers warned that using the online auction system would push the share value artificially high as there will not be enough to satisfy demand, resulting in the shares spread so broadly and thin that there would be no market.

The FT's sources estimated the company's value at IPO to be between $15bn and $25bn. However, as Google does not disclose its financial figures it is a very difficult figure to pin down. Currently, Google profits are estimated to run in the region of $150m, with $500mn in revenues, a year.

Full story at FT.com.