Every second, Google combs through billions of Web pages to respond to search requests as people check out everything from potential lovers to prospective lasagna recipes.
On Friday, Google started its own search, one that will be far slower -- it will take most of a week -- and far less complicated, probably involving thousands of documents, or a few million at most. Indeed, Google is searching for just one number: the price at which it will sell stock to the public for the first time.
That number, and the subsequent price of the company's shares in the market, could well influence whether Google will continue its meteoric growth or start to stagnate as customers and employees begin to wonder whether its best days are behind it.
On Friday, after nearly three months of intense government scrutiny, a few modest legal setbacks and rising investor skepticism, Google began taking bids on the Internet for 25.7 million of its shares.
Google is hoping to sell about US$3 billion worth of stock using a form of a Dutch auction, a structure that has been used in this country a handful of times and only with companies far smaller and less prominent than Google.
It was unclear on Friday whether the early bidding gave any indication of the price of the offering. Many professional investors who are interested are waiting until next week to enter their bids.
Google has said it expects to close the auction next week, but it has not determined which day. It will review the bids with its bankers -- Morgan Stanley and Credit Suisse First Boston -- each day and will close the auction when it is satisfied that it has enough demand for its shares at a suitable price. The company said last month that it expected the shares to sell for US$108 to US$135 each. That would value the company at US$29 billion to US$36 billion, just shy of the market value of Yahoo.
Since then, shares of technology companies have declined, and many analysts and investors have decided that Google deserves a valuation below that of Yahoo because it is less diversified.
"Last week, investors were saying that US$90 is where they were a buyer of Google," said Seth Goldstein, chief executive of Majestic Partners, a firm that provides research to institutional investors. "And the market has gone down since then."
Auctions are put forward as more democratic than traditional offerings, in which the investors and the price are negotiated privately by the brokerage firm chosen as the lead underwriter. But they are also meant to raise more money for the companies because in theory they set the offering price higher than the traditional methods, leaving the shares less likely to rise sharply in trading after the offering.
But the lack of the expectation of an initial price lift has scared off a number of investors. So has the complexity of the auction and the very limited information about its business and prospects that Google has provided at its meetings with prospective investors. It probably did not help that the auction was beginning on Friday the 13th.
A series of brushes with Securities and Exchange Commission rules also tarnished Google's image. This week, for example, Playboy magazine published an interview with Google's founders. The company had to reissue its prospectus, acknowledging that the interview could be a violation of the SEC's rules for a "quiet period" before an offering and attaching the entire interview to the filing. SEC officials said on Friday that Google's new disclosure was adequate and that the offering could proceed.
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