The Penguin Ping.
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Posted on 04/27/2004 3:36:03 PM PDT by Truth666
After a long dry spell, the venture capital industry is hoping an upcoming initial public offering by Web search giant Google will help start a new flow of cash to young companies. But despite a pick-up in venture financing in the first quarter, the money now being raised bringing new companies public is just a light rain compared to the downpour of cash that flooded the market at peak of the tech boom in 2000.
Figures released Monday show that venture-backed companies took in $5 billion in investments in the first quarter, a healthy gain from the $4 billion collected in the first quarter of 2003. But investment is still down sharply from the $27 billion raised in the first quarter of 2000 at the height of the market bubble, according to a quarterly survey by Venture One/Ernst & Young.
Google, which got $25 million in venture funding from Kleiner Perkins Caufield & Byers and Sequoia Capital in 1999, is widely expected to announce plans for its IPO this week. One reason for the timing is a Securities & Exchange Commission regulation that requires companies with more than 500 shareholders and $10 million in assets to make a financial filing within 120 days of the year they reach that threshold.
Having awarded stock options to most of its 1,000-plus employees, Google is believed to have triggered the rule last year, giving the company until Thursday to provide details on its finances for the first time.
Google theoretically could just file an annual report for 2003 without pursuing an IPO, but most observers seem to think that strategy would make little sense. That’s because Google would encounter all the compliance headaches of a public company, incurring millions in annual expenses, without reaping any of the financial benefits.
Ironically, archrival Yahoo! is also in line for a huge windfall from Google’s IPO. Yahoo invested $10 million in Google in mid-2000, when the two companies were still friendly, acquiring a stake that figures to be worth hundreds of millions of dollars after an IPO.
Until a filing is made, investors can only speculate about the details of the offering. The company is believed to have revenues approaching $1 billion a year. The stock offering could raise as much as $2 billion for a 10 percent slice of Google, valuing the entire company at more than $20 billion. That would make its IPO one of the biggest ever by a technology company and deliver huge returns to its original investors. The lack of hard data has only boosted interest in the offering.
"I think the secretive nature of the company has actually accelerated or exaggerated that interest, that mystery about it." said Martin Pyykkonen, a senior research analyst at Janco Partners.
(Excerpt) Read more at msnbc.msn.com ...
Someone would just invent something like google. Eventually, someone will invent something better than google.
The story says that google might be "worth" as much as 25 billion after the IPO. That's just insane.
Wanna be Penguified? Just holla!
Got root?
Google's only claim is a clean interface with little marketing hype on their homepage. However, they have won over 80% + of www users. There is a better way to search the www - the current method is a little archaic. Someone will figure out a method to pinpoint searches and retrieve information in an organized fashion.
There will always be a better way, but Google is a good bet to find it before anyone else does. There's a reason they have won over 80% of web users, and it isn't a pretty interface. They have some serious rocket scientists in the back room who know as much as anyone on Earth about natural-language searching. New Ph.D.'s in the text-mining area consider Google the prestige employer in that field. It will probably stay that way for some years, until their stock options get old and tired like Yahoo's and Microsoft's are. Google is still minting millionaires, which is always a big draw.
Without Google and Mapquest, I would be lost...
And, as you all know, you can't have archaic and eat it too.
<rimshot mode=on>
Michael
Totally insane. Search engines come and go. This one is nothing special.
Compare this with facebook 8 years later.
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