Google has released new figures for its IPO overnight. Shares will be priced between $US108 ($150) and $US135 ($190), meaning up to $US3.3 billion will be raised and the company will be valued at up to $US36.25 billion ($51bn) - $US10 billion more than General Motors (America's biggest carmaker) - which would rank it fourth biggest in Australia. Check out Google's SEC filing in full here.
Just six years after starting the company, the two founders - Sergey Brin and Larry Page - are selling about $180 million worth of shares each in the float but will retain about $8 billion each at the top end of the valuation. After the offering, Brin, Page and CEO Eric Schmidt will control 38 per cent of Google's shares, but they will have 60 per cent of the votes, because their shares carry 10 times the voting power of those sold to the public. Rupert would be proud of such a gerrymander.
Of the 24.6 million shares to be sold, 10.4 million are held by current shareholders and there are some interesting names amongst the investors looking to cash in. Now one of Google's main competitors, Yahoo was an early investor in the search engine and plans to sell off $105 million of its $1 billion stake, while AOL-Time Warner will sell $141 million of its $1.4 billion stake.
Stanford University, where the obsessively secretive Brin and Page met as students, is also planning to sell about $31 million of its stock holding. David Cheriton, the Stanford University computer professor who was a mentor to Brin and Page, will cash in about 10 percent of his holdings - worth an estimated $58 million.
But the biggest winners will be Silicon Valley venture capitalists Kleiner Perkins and Sequoia Capital, who provided $US25 million in equity funding for the company back in 1999. The firms now plan to sell about 10 percent of their holdings, worth over $350 million each, according to public filings.
That wasn't the only news on google yesterday. The other piece of news -- which went mostly unnoticed -- was that spammers had brought down the search engine for about three hours in the morning. During that period, untold number of Google users got error messages or waited for longer periods to get their results.
The culprit was a barrage of search queries from computers infected with variants of the MyDoom virus, a worm coded by a German high school student. The queries had significantly slowed down Google's response and caused the outage.
But Google's incredible success certainly puts Australia's feeble IT industry to shame. Shareholders of Solution 6 today voted in favour of a proposed merger with fellow software maker MYOB to form Australia's biggest software company. But at just $233 million it doesn't even come close to Australia's 150 companies.
Australia has barely had a successful large scale start-up company in any area over the last 30 years. Computershare (established in 1978) and Billabong (1973) are the most recent start-ups, which make Australia's top 100. Before that Tabcorp was set up as a government run betting agency in 1961. That's pretty pathetic.
The contrast with America is stark where close to a majority of its top 20 companies didn't exist in 1970. Still, at least we've got our booming gaming industry, a profitable banking cartel and an efficient grocery retailing duopoly. Oh, and we're also great at sport thanks largely to our East German approach to churning out taxpayer-funded gold medal winners!
with thanks to Crikey!
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