Search Engine Optimisation, Promotion and Internet Marketing

Google rumoured to be planning IPO auction

23 February 2004

Rumours are circulating that Google may put some of its initial public offering (IPO) stock up for auction.

It is unclear at present when or if the internet search engine IPO will happen, but if it goes ahead it will be the biggest IPO since the late 1990s, in terms of both the amount of money it could raise and its name recognition among investors.

The IPO could raise an estimated $4 billion and the chosen method of Google's offering will be closely watched.

Google is not expected to go down the traditional route of just letting investment banks divvy up their IPO's shares, but is predicted to offer the public a rare chance to purchase stock.

There is some thought that the IPO will go ahead this year, possibly even sometime this spring, but the company has yet to confirm any details.

The IPO market has come under attack in recent years, with critics claiming that investment firms improperly distribute new shares and intentionally underprice IPOs to ensure their clients are guaranteed a solid return when trading begins.

Google has reportedly hired investment banks to run a traditional offering, but has also retained a firm known for its IPO auctions.
However, one of the risks of using an auction is that those who bid very high can corrupt the process, causing inflated and inaccurate pricing.

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