Google moved forward with its initial public stock offering on Thurs-day, even as an interview its founders gave to Playboy magazine raised more questions about whether the offering can be completed this month.
Google, the most popular Internet search engine, is hoping to sell US$3 billion worth of stock in an unusual electronic auction. It stopped registering potential bidders on Thursday afternoon and said it would start accepting bids, through the brokerage firms that are underwriting the offering, at 9am yesterday. The company said it expected to end the auction sometime next week.
One potential pitfall is next month's issue of Playboy, which has an eight-page interview with Larry Page and Sergey Brin, the com-pany's two founders. While the interview does not contain any significant new information about the company, it nonetheless could run afoul of Securities and Exchange Commission (SEC) rules that enforce a "quiet period" on companies selling stock. Securities law bans a company from making "written offers" of its shares in any form other than the official prospectus. And the SEC has ruled that some news articles constitute written offers.
In May, the commission forced Salesforce.com, a company that sells marketing software, to delay its public offering for several weeks after its chief executive, Marc Benioff, discussed its business in an article published in The New York Times.
A commission spokeswoman declined to comment on the Playboy article or the Google offering. A spokeswoman for Google also declined to comment.
The interview was conducted in Google's cafeteria on April 22, seven days before the company filed to go public.
"Any good securities lawyer would advise a company that was about to file a registration statement not to talk to the press," said Stuart Bressman, a lawyer with Brown Raysman Millstein Felder & Steiner in New York.
While companies can continue to make information available about their products and services, he said, "any kind of communication that is out of the ordinary is not OK."
Brian Lane, a former head of the SEC's division of corporate finance, said the commission staff was sure to take a close look at the article. But Lane, now a lawyer for Gibson, Dunn & Crutcher in Washington, said that it might not choose to take any action.
"They will look to see if the company did this with the expectation that it would facilitate their public offering," he said. "If so, there could be ramifications," including a delay in the offering or potentially even a fine.
The interview was conducted by David Sheff, a contributing editor who has conducted many interviews for Playboy of celebrities ranging from John Lennon to Steven Jobs.
In the interview, Page says he is not interested in selling Google to a larger company.
"We think we are an important company, and we're dedicated to doing this over the long term," Page said. "We like being independent."
Sheff pressed the two young founders, who each will become billionaires several times over in the offering, about their oft-stated creed "Don't be evil." They answered his questions, adding their trademark flippancy.
"We have other rules, too," Brin said. Page jumped in, adding, "We allow dogs, for example."
The closest the interview came to financial topics was part of a discussion of Gmail, Google's e-mail service that has angered privacy advocates because it displays advertising related to the content of messages that users are reading.
"During Gmail tests, people bought lots of things using the ads," Page said.
People affiliated with the offering said that the underwriters were moving forward on the assumption that the article would not delay the offering. It may, however, lead to some changes to the company's prospectus, which has already been amended six times. One person involved in the offering said that there would likely be at least one more amendment.
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