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Google still in holding pattern

By David A. Vise
The Washington Post

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The delay does not appear to involve major new issues, and the company continued to maintain its IPO is on track to be priced and begin trading under the ticker symbol "GOOG" this week.

Both SEC and Google officials declined to elaborate on the possible reasons for the delay, which could include an ongoing analysis by Google and its financial advisers about what initial price to set for shares and how to allocate them.

"As of close of business (yesterday), the registration statement had not been declared effective," said SEC spokesman John Heine, who declined further comment.

Under the novel auction system Google is using to distribute shares, the top Internet search engine has said it will notify bidders once the SEC approves the offering. Until then, bidders have the right to withdraw, submit or change their bids.

Google had asked the SEC to give final blessing to its prospectus at 1 p.m. local time yesterday, which would have made it possible for the IPO to be priced immediately and for the stock to begin trading as early as today.

Under the guidelines Google set for its electronic auction, the company reserved the right after receiving SEC approval to close the auction immediately or to leave it open.

Google spokeswoman Cindy McCaffrey declined to comment on whether there are problems with the company's registration.

Google has updated its regulatory filings several times since announcing its plans to go public in April. Typically, companies work closely with the SEC to ensure all paperwork is in order, making final approval a routine process.

"It wouldn't be surprising, given all the things that have gone on with this auction, that they haven't dotted all their 'i's and crossed all their 't's," said Thomas Curran, a former securities-fraud prosecutor. "It could be that they just screwed up somehow."

This month, 13 companies have delayed or withdrawn their initial share sales, and eight companies withdrew or postponed their IPOs last month.
 
Google, which seeks to sell at least 25.7 million shares in the IPO, has suggested a price range of $108 to $135 a share, although investors may bid any price.

Google plans to assess the bids to pick a "clearing" price and then distribute shares to bidders who offered to pay that price or more. No one would pay more than the clearing price. All investors allocated shares will pay the same per-share price in the IPO.

Google has said it also could increase the size of the offering by 3.9 million shares if there is sufficient demand, which would bring the total size of the deal to 29.6 million shares. If the IPO is priced within the range suggested by Google, the company would have a total stock-market value of about $30 billion.

Founded in 1998, Google is the leader in answering queries for computer users about virtually any subject by directing them to relevant Internet sites.

Google competes directly with Yahoo! and faces the prospect of heightened competition from Microsoft. The company makes nearly all of its profit from ads that appear alongside its search results.

While its growth rate has been slowing, Google remains profitable. The company reported $143 million in profit and $1.4 billion in sales in the six months ended June 30, versus $58 million in profit and sales of about $560 million in the same period last year.

Washington Post staff writer Carrie Johnson contributed to this report.

Material from Bloomberg News is included in this report.