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Google Inc announces IPO

Google Inc, whose name is synonymous with Internet searches, on Thursday said it planned to go public by selling US$2.7 billion in stock through a novel online auction in the most-anticipated IPO since the dot-com bust.

The planned initial public offering promised to enrich the founders and early backers of the unconventional six-year-old company, which posted revenue of almost US$1 billion last year. It would also set the stage for a new round of competition for Internet advertising dollars with Microsoft Corp and Yahoo Inc.

In keeping with Google's quirky culture, co-founders Sergey Brin and Larry Page promised in an "owners manual" for prospective investors that its debut as a public company would not change its culture. In doing so, they repeated the company mantra: "Don't Be Evil."

"Google is not a conventional company. We do not intend to become one," they said, noting that investors could be in for a bumpy ride because they had no intention of smoothing results to match Wall Street expectations and would continue to invest in high-risk, high reward projects.

Google did not provide details on the pricing or expected listing date for its shares, but said they would be sold through an online auction designed to even the playing field for smaller investors and "minimize" the "boom-bust cycles" that have characterized other IPOs.

Mountain View, California-based Google said it would seek to list either on the NASDAQ Stock Market Inc market or on the New York Stock Exchange.

Morgan Stanley and Credit Suisse First Boston were named as lead underwriters for the offering, which has been expected to generate fees of up US$100 million for investment bankers.

Google, which turned its first annual profit in 2001 and has been increasingly profitable in each successive year as revenue rose meteorically, said its management structure would continue to be run as a "triumvirate" of founders Larry Page and Sergey Brin and chief executive officer Eric Schmidt.

For the first quarter of this year, Google reported US$390 million in revenue and net income of US$64 million. Net income doubled from the year-earlier quarter, it said.

But the founders cautioned that the company would not issue quarterly profit targets.

"A management team distracted by a series of short-term targets is as pointless as a dieter stepping on a scale every half hour," Page wrote to prospective investors.

Google, which was born out of the founders' graduate work at Stanford University, receives more than 200 million search queries a day in 97 languages, about half from people outside the US, the company says on its Web site.

Google reaps the majority of its revenue from key-word advertising, which the company rolled out in 2002. That market is expected to grow to US$3.2 billion in the US this year, according to Internet research company eMarketer.
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