Google files IPO plans; price to be set with auction

SAN FRANCISCO (AP) -- Internet search engine leader Google Inc. is ready to accept the stock market's money, but not Wall Street's traditions.
Without specifying a price per share, Google filed its hotly anticipated IPO plans Thursday, promising to raise big bucks without selling out its small-company values. The company aims to raise $2.7 billion with an initial public offering that has created the biggest high-tech buzz since the dot-com bubble burst four years ago.
The IPO is expected to give Google a market value of at least $20 billion, creating scores of new Silicon Valley millionaires -- including many of the company's 1,900 employees.
But Google warned investors that it won't take its marching orders from the markets.
"Google is not a conventional company. We do not intend to become one," co-founders Larry Page and Sergey Brin wrote in an open letter included in the IPO filing.
Will be auctioned
As expected, Google said the price of its IPO will be determined through an auction designed to give the general public a better chance to buy its stock before the shares begin trading, most likely in late summer or early autumn. IPO shares traditionally have been restricted to an elite group picked by the investment bankers handling the deal.
Although Google's stock won't be sold for several more months, the filing represents a significant milestone in the 51/2-year-old company's evolution from a fun-loving startup to a corporate adolescent that will be held more accountable for how it manages its money.
Depending almost entirely on advertising linked to online searches, Google earned $105.6 million, or 41 cents per share, on revenue of $962 million last year. Google got off to an even better start this year, with a first-quarter profit of $64 million, or 24 cents per share -- more than doubling its earnings of $25.8 million, or 10 cents per share, at the same time last year.
New pressures
By going public, Google will be under greater pressure to produce steady earnings growth -- an expectation some executives say leads to shortsighted management decisions.
As a public company, "you become sharper in some respects, but it also can cause you to make some decisions just so you can show growth from quarter to quarter," said Steve Berkowtiz, chief executive of Ask Jeeves Inc., a Google rival and business partner.
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