BUSINESS
Google goes to market
26-07-2004
by Craig Liddell
Search engine giant Google has announced the range for its initial public offering (IPO), as the company fights it out in the courts.
It is expected that Google will sell shares at a price between USD108 and USD135 per share, reports say, as the search engine firm edges closer to one of the most eagerly awaited initial public offerings (IPO) in years.
Total cash raised from the IPO will be between USD2.7 billion and USD3.3 billion and once completed, Google will trade on the Nasdaq market under the "GOOG" symbol, the firm said in an SEC filing.
The news comes as the company fights a wrongful termination case and a domain dispute.
Google's founders, Sergey Brin and Larry Page, and venture capital (VC) backers, Sequoia Capital, have picked an on-line auction mechanism to ensure they get the highest possible price in the IPO. Wall Street estimates of the company's value range from USD20 billion (EUR16.45 billion) to USD30 billion, although demand from private investors hoping to make an early profit could push the figure up to USD40 billion.
It is estimated that Google will receive net proceeds of about USD1.66 billion from the sale of the 14.1 million shares -- assuming that shares sell at a price of around USD121.50 a piece -- after underwriting discounts and commissions and estimated offering expenses are taken out.
However, considering the price will be set by auction, some Wall Street analysts are concerned Google's stock may collapse once trading begins.
Others in the technology sector hope the IPO will be a barometer of the growing revival in technology and Internet-related stocks following the dot.com crash of 2000.
Announcement of the IPO range caps a busy week for the California-based search engine company. On Tuesday 20 July, former Google manager, Brian Reid, filed a wrongful termination case in Santa Clara Superior court. Reid alleges that the company sacked him as director of operations in February 2004 because he didn't fit into a culture emphasising "youth and energy." Google has repeatedly denied the allegations.
Meanwhile, Google's right to use the name Froogle for its on-line shopping service is in doubt after an arbitration panel on Friday rejected the company's challenge of a Web site named Froogles.com. Two of the three judges on the panel of the Internet Corporation for Assigned Names and Numbers (ICANN) rejected Google's argument that Froogles.com was "confusingly similar" to Google.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 