Capital Markets

Amended Prospectus by GOOG

Google has revealed a few more details about next month's initial public offering.
Ed ZwirnJuly 27, 2004

Will August be the month that dot-com IPOs return to the big time?

According to an amended prospectus filed with the Securities and Exchange Commission, search provider Google announced that it hopes to raise as much as $2 billion in next month’s initial public offering.

The Mountain View, California-based company could have an initial market capitalization as high as $36.25 billion. About 24.6 million shares will be sold in the IPO for between $108 and $135, according to the filing.

Google plans to sell 14.1 million shares, while another 10.5 million will be sold by stockholders. It has received approval to list its Class A common stock on the Nasdaq under the symbol “GOOG.”

The company previously announced that it will forgo the usual method of allocating IPO shares among lead managers and instead auction them off over the Internet to any investor willing to bid on at least five shares. The success or failure of this auction will therefore be of particular interest in the underwriting sector.

Google also reported second-quarter earnings of $79.1 million on revenue of $700.2 million, according to the prospectus, compared with first-quarter earnings of $64 million on revenue of $651.6 million. The company’s earnings of $143 million for the first half of 2004 — compared with $57.9 million for the same period last year — exceed its earnings for any single year to date.

In a statement within the prospectus, the company recognized the “formidable competition” it faces from many tech companies, particularly Microsoft and Yahoo. It also recognized the potential copyright problem it may face if the word “Google” becomes a verb synonymous with “Internet search.”

Proceeds of the offering will be used for “general corporate purposes,” according to the filing.