Google files IPO registration

IDG News Service - Google Inc. has filed a registration statement with the U.S. Securities and Exchange Commission for an initial public offering of its common stock, putting the Internet search pioneer on its way to becoming a public company.
The move by Google today had been rumored for months, and the expectations for this IPO are extremely high in the technology sector, which views it as emblematic of a turnaround in the industry.
The proposed maximum aggregate offering price, as stated in the S-1 filing, is $2.72 billion.
Google's executive team had resisted taking the company public. Founded in 1998, Google is reportedly profitable and the most widely used search engine. But competition is heating up, as Microsoft Corp. and Yahoo Inc. invest heavily in improving their own search technologies.
"From what we can tell, Google is running a healthy profit now, so they don't need the IPO cash to survive," Jupiter Research analyst David Schatsky said before Google filed for the IPO.
Two main drivers may be prompting Google to go public, he said. First, the company may be facing mounting pressure to reward investors and employees who have stock options. Second, executives probably understand that they are in an increasingly competitive environment and need more money to develop new services to make Google more attractive to users.
"Consumers' relationships with search engines are as shallow as they come: highly transactional, quick visits, quick answers, and they move on," he said. "If a competitor can match or improve on that experience, consumers today have little reason to stay with Google. The company needs to pursue deeper ties with its users."
One way of doing that is through services such as the recently announced -- and controversial -- Google Web-based e-mail service, called Gmail (see story), and through features that let users personalize their Google search experience.
An e-mail service links users more tightly with Google and gives them a reason to visit the site regularly, while personalization ties users with the Google search features. "That's the single most important strategic direction: technology to lock in users or make them more likely to be loyal even in the face of competing search experiences," Schatsky said. "The key imperative is to increase visitor loyalty and stay ahead of the competitive pack."
Gmail is in early testing phase and available only to a very small number of users. But it has already generated a strident controversy as privacy advocates have rushed to condemn Google's plan to include ads in the body of e-mail messages based

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