- The Washington Times - Thursday, August 12, 2004

SAN FRANCISCO (AP) — Google Inc. plans to open the auction for its hotly anticipated IPO today and set the final price next week, despite legal questions about a newly published Playboy interview with the founders of the online search engine.

The 28 brokerages handling Google’s unorthodox initial public offering were to begin accepting bids at 9 a.m. EDT today, according to a statement posted by the Mountain View, Calif., company yesterday.

All bidders must have obtained one of the registration numbers that Google has distributed during the past two weeks.

Google and its insiders hope to raise about $3 billion by selling stock at a price ranging from $108 to $135 per share. But the so-called Dutch auction could change that price, particularly if most of the bids fall below the minimum $108 target.

The auction is expected to be wrapped up sometime next week, the company said yesterday.

But securities attorneys said Playboy’s interview with Google co-founders Larry Page and Sergey Brin could change the company’s IPO timetable.

In the seven-page article, they discuss the company’s rapid growth and even brag about how Google’s search engine has helped save people’s lives.

The interview, which appears in a Playboy issue delivered to some subscribers yesterday, threatens to delay Google’s IPO because securities regulations restrict what executives can say while preparing to sell stock for the first time.

Google needs the Securities and Exchange Commission to approve its IPO registration statement before it can complete the stock sale — a process the interview complicates, predicted Michael Zuppone, a former SEC attorney.

“I don’t want to rain on their parade, but I think this interview is going to cause regulatory concern. There could be consequences,” said Mr. Zuppone, now with Paul, Hastings, Janofsky & Walker LLP in New York.

Securities attorney David Walek of Ropes & Gray LLP agreed that the interview would be a serious problem for almost any company preparing an IPO. But he said Google may be an exception because of the widespread publicity swamping the company since its IPO filing in late April.

“There already has been so much written about this company that the SEC may conclude that this doesn’t really change the mix that much,” Mr. Walek said.

SEC spokesman John Nester and Google spokeswoman Cindy McCaffrey declined to comment.

The SEC sometimes imposes a “cooling off” period when a company involved in an IPO releases any information that deviates from its IPO registration statement. The SEC is especially sensitive to promotional remarks while a company is gearing up for an IPO, securities attorneys said.

Regulators cracked down on Salesforce.com in May when the company’s chief executive, Marc Benioff, cooperated with an article published in the New York Times on May 9. After the article appeared, the SEC forced the San Francisco company to delay its high-profile IPO. Salesforce.com completed its IPO six weeks after the article appeared.

Playboy spokeswoman Theresa Hennessey said the magazine conducted the interview on April 22, a week before Google filed its registration statement. None of Google’s top executives have granted interviews since the IPO filing.

Securities attorneys contacted yesterday said they doubted the timing of the interview would matter to the SEC because Mr. Page and Mr. Brin knew then that an IPO filing was imminent.


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