Google Seeks Second Stock Offering - InformationWeek
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8/18/2005
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Google Seeks Second Stock Offering

On the one-year anniversary of its initial public offering, Google on Thursday proposed to federal regulators a second public offering of more than 14.2 million shares of common stock valued at $4 billion.

On the one-year anniversary of its initial public offering, Google on Thursday proposed to federal regulators a second public offering of more than 14.2 million shares of common stock valued at $4 billion.

In its filing with the Securities and Exchange Commission, the Mountain View, Calif., company was vague in its reason for seeking the additional capital, saying that the net proceeds would be used for general corporate purposes.

"In addition, we may use proceeds of this offering for acquisitions of complementary businesses, technologies or other assets," Google said. "We have no current agreements or commitments with respect to any material acquisitions."

The proposed offering, which came one year after Google's April 19, 2004 IPO, is valued at $4 billion, the Wall Street Journal Online reported. Google had a cash balance of $2.95 billion, as of the end of June.

Google is under increasing competition by its two major rivals for search-related online advertising. Microsoft Corp., Redmond, Wash., is currently testing its own global advertising system for the MSN portal. Yahoo Inc., on the other hand, is expanding rapidly into foreign markets.

The Sunnyvale, Calif., company said last week that it would pay $1 billion for a 40 percent share of Chinese company Alibaba.com and fold Yahoo's Chinese operations into the combined company, which would hold a leading position in that country in search, and in business-to-business and consumer e-commerce. China ranks as the world's fastest growing Internet market.

In addition, IAC/InterActiveCorp in March said it would acquire Ask Jeeves, launching the e-commerce conglomerate into the search market. News Corp. is reportedly negotiating to buy search engine Blinkx, but neither company has confirmed the reports.

Managing underwriters for Google would be investment bankers Morgan Stanley & Co. Inc., Credit Suisse First Boston LLC and Allen & Company LLC. The underwriters would have an option to buy up to 600,000 additional shares from Google solely to cover over-allotments, if any, the Mountain View, Calif., company said.

Near the end of trading Thursday on the Nasdaq Stock Exchange, Google shares were down $5.47, or 1.92 percent, to $279.63.

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