Google appears closer to pursuing an IPO


SAN FRANCISCO - Google, the Web-search company that has developed a huge popular following around the world, is expected to take a tentative first step next week toward a public stock offering, a person close to the company said yesterday. But it is likely to stop short of filing a formal registration to sell shares, he said.

In recent days, speculation on Wall Street and in Silicon Valley has reached a fever pitch over Google's long-awaited offering, which has become the most highly anticipated event in the technology world here since the dot-com boom collapsed in early 2001.

But Google, which prides itself on its quirky and secretive corporate culture, appears prepared to drag out any public offering as long as possible. Google is being driven to disclose basic financial details of its operations next week by an obscure provision of securities law.

Google executives have consistently refused to comment publicly on plans for a public offering, and they maintained that stance yesterday. But interest in the company has grown so intense in recent days that some of them have found themselves badgered in front of the company's headquarters by television crews eager for comment on an offering that could easily raise $2 billion or more and give Google a market value of $20 billion to $25 billion.

Such an offering would make billionaires of young computer science experts Sergey Brin and Larry Page, who founded the company five years ago while still graduate students at Stanford University.

In contrast to most of the Silicon Valley companies of the 1990s dot-com era, Google is thought to be highly profitable and to be growing rapidly.

Google is generating almost $1 billion in revenues annually, according to executives who have been given information about the company's finances, and it might have profits of more than $300 million.

The speculation over Google's plan is increasing because the company has distributed stock options widely to its employees, making it subject to a regulation that is part of a 1934 securities law requiring public disclosure by private companies once they reach more than 500 shareholders.

At an employee meeting last month, the company's executives said Google had embarked on the path toward a public offering, but they gave no information about possible timing.

Those close to the company say Google's top executives are under pressure to move ahead soon because of fears that employee morale might be damaged if they don't get an opportunity to turn their shares and options into wealth.

From inside and outside the company, there have been repeated rumblings that the founders and outside investors are debating the value of an immediate public offering.

Google's founders are leery, Silicon Valley insiders say, of giving up control of their company and of the operational and cultural changes that a public offering might bring about.

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