Reuters: Google to Go Public in $2.7 Bln Offering

The internal Google advocates for the "cutesy" method of going public apparently won out. Rumors published here last week indicated that Google founders were insisting that the public offering be done with a new type of auction method and that the corporate structure divide into two classes of stock so that founders can keep control of the company. Venture capital partners were reported to be unamused at the time, but apparently not persuasively enough to change the minds of Google's key managers and shareholders.

In 2003, the company took in about a billion dollars and made earnings of roughly 10 percent of that. The trend, though, looks very good for Google, as about two thirds of those profits were earned in the last quarter of 2003, with about two fifths of the revenue coming in the same period. This growth rate bodes well for 2004.

It has about half a billion dollars in cash on hand, to which it will add as much as 2.7 billion in proceeds from the initial offering. Founders Sergey Brin and Larry Page will run the firm in a troika with CEO Eric Schmidt.

The value ultimately set by the street will likely have less to do with existing growth rates, revenues and earnings, but rather assessments of whether or not Google can continue its ground breaking series of advertising and media innovations. To that end, the 1,900-employee company is investing very heavily in research and development engineers in at least five different countries.