- The Washington Times - Tuesday, August 10, 2004

SAN FRANCISCO (AP) — Google Inc. will close the registration process for its IPO auction tomorrow, setting the stage for the online search engine leader’s hotly anticipated stock market debut.

The Mountain View, Calif.-based company posted an online notice yesterday announcing plans to end the registration process at 5 p.m. EDT tomorrow. Google plans to begin an unusual auction to sell 25.7 million shares shortly after closing the registration, the company said yesterday. No further details were provided.

Most market observers expect the auction for the initial public offering to be completed next week, clearing the way for Google’s shares to begin trading on the Nasdaq Stock Market under the ticker symbol “GOOG.”

But Google hasn’t spelled out a precise timetable for the auction. In its IPO prospectus, the company stresses it can close the auction “at any time.” The prospectus also raises the prospect that the auction could last two or three weeks, noting that bidders will be asked to reconfirm their bids if the process lasts for more than 15 business days.

Once Google is prepared to close the auction, the company must ask the Securities and Exchange Commission to give its final approval of the IPO prospectus. After the SEC signs off on the deal, bidders will have a final opportunity to withdraw their bids. The winning bidders in the auction will be notified by e-mail within 24 hours of SEC approval.

To participate in the auction, bidders need a 16-digit registration number to present to one of the 28 brokerages handling Google’s $3.1 billion IPO. The company has been distributing the identification numbers since July 30 when it opened a special site, www.ipo.google.com.

The site so far has drawn sparse traffic — an indication that investor interest in Google’s IPO isn’t as intense as many analysts anticipated. Google’s IPO site isn’t even attracting enough visitors to register in a widely watched tracking system that measures Internet traffic. Comscore Media Metrix’s system requires a minimum of 50,000 daily visitors — a threshold that Google’s IPO site hadn’t surpassed through Monday.

The lukewarm response may stem from confusion about Google’s unorthodox auction process and disillusionment with the high price that the company wants for its stock.

Google has valued its IPO at between $108 and $135 per share, but the company’s so-called Dutch auction is supposed to determine the final price. Bidders can submit offers below, above or within Google’s price range. Google will analyze the range of auction bids to set the final, or “clearing,” price for its IPO.

Some analysts have endorsed Google’s self-appraisal, which values the six-year-old company at $29 billion to $37 billion, based on the 271.2 million shares that will be outstanding after the IPO. The market valuation would make Google worth as much as long-established brands such as Sony and McDonald’s.

The lofty IPO price target reflects Google’s tremendous growth since former computer graduate students Larry Page and Sergey Brin started developing the company’s vaunted search technology in a Stanford University dorm room. Mr. Page and Mr. Brin each hope to pocket more than $100 million by selling some of their Google shares in the IPO and retain stakes that will make both men worth billions of dollars on paper.

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