After much speculation Google, the popular Internet search engine operation, has filed for a US$2.7 billion initial public offering in what looks set to become the largest dot-com stock offering ever.
Google has not decided whether it will seek listing on the New York Stock Exchange or the Nasdaq Stock Market.
In filing for its IPO, Google has put to rest a financial question that had been the subject of great scrutiny: It has been profitable for the past three years. Last year, it rang up a profit of $105.5 million on revenue of $961.8 million, according to IPO papers filed with the Securities and Exchange Commission. Cash generated from operating activities totalled $395.4 million.
In 2002, Google earned $9.6 million on revenue of $347.8 million. In 2001, it turned a profit of $16.9 million on revenue of $86.4 million. The search engine had losses in 2000 and 1999 of $14.9 million and $6 million, respectively. For the first quarter of this year, Google delivered a profit of $64 million on revenue of $390 million.
Google is the most heavily used site in the world for Web searches, logging more than 200 million searches a day. It licenses its technology to scores of companies, including America Online and Yahoo. It also operates a news-aggregation service as well as a shopping search function called Froogle.
Google boasts a long line of well-known institutional investors, such as marquee venture capital firms Kleiner Perkins and Sequoia Capital, plus Sun Microsystems co-founder Andy Bechtolsheim, entrepreneur Ram Shriram and others. The first two put in $25 million each back in 1999.
Google said it plans to spend $250 million this year to expand its infrastructure. On an annual basis, its spending has risen 92 percent since 2000. The company has 1,907 employees.
According to some the IPO may not be the success thay US experts are predicting. See what the Economist has to say at: