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Google Auction to Commence Friday

Jeffrey R. Hirschkorn, Senior IPO Analyst, Aug. 12, 2004

The much anticipated IPO from �Net search engine Google (proposed: GOOG) is taking the next step towards finality. On Friday, the Dutch auction, which sources tell Current Offerings is being run off of the OpenIPO system pioneered by W.R. Hambrecht + Co., will commence. The investment-banking team, which is anchored by Credit Suisse First Boston and Morgan Stanley, anticipates pricing of its IPO in the upcoming week.

However, another tough situation has developed with respect to a highly unusual interview granted by the Google co-founders to Playboy Magazine. According to various reports, regulators are investigating whether or not the interview violated quiet period restrictions. Such restrictions prohibit company executives from speaking with the media while undergoing the IPO process. This ends following the quiet period release. This interview, sources say, could pose another delay in the long anticipated debut of Google.

Earlier in the week, the company announced that it was increasing shares to be sold in the IPO. In total, the company plans on selling 25.6 million shares at a highly unusual goal of $108-$135 per share. If successful, the deal looks to raise upwards of $3.3 billion. The shares offered in the IPO are Class A, of which the company is parting with nearly 14 million. Selling holders will sell 11.5 million shares.

The increase in IPO shares is a direct result in the firm�s recent patent litigation settlement with Yahoo!. In the deal, Google pledged 2.7 million shares of the company, valued at $291-$365 million. In turn, Yahoo! will sell 1.1 million shares of its holding in the IPO. Currently, Yahoo! owns 6.6 million shares in the IPO.

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