Como se combate o populismo? "Com eleições", responde Fukuyama

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Google to Sell $4.2 Bln of Shares a Year After IPO (Update3)
Aug. 18 (Bloomberg) -- Google Inc., the world's most-used Internet search engine, plans to sell as many as 14.8 million shares in a $4.2 billion transaction a year after its initial public offering. The company's stock fell 2.9 percent.

The sale, disclosed today in a regulatory filing, follows a surge in Internet advertising that has fueled demand for the stock. The Mountain View, California-based company's shares have more than tripled since its IPO a year ago today, and Google's profit jumped fivefold in its year as a public company.

The offering highlights emerging questions about Google's future after Chief Executive Officer Eric Schmidt told analysts last month that sales this quarter may not grow as fast as previous periods. Acquisitions may be one possibility, especially because No. 2 search engine Yahoo! Inc. has more content to lure users and the advertisers trying to reach them.

``Exactly what they want the cash for will be a big, big question,'' said John Tinker, an analyst at ThinkEquity Partners in New York. ``The question will be, does Google need to own more content? Yahoo has gone that route.''

Google didn't offer a specific plan for the money, other than general purposes and possible acquisitions of ``complementary businesses.'' The company is rolling out new products and expanding overseas to counter heightened competition from Yahoo and Microsoft Corp., and UBS Securities analyst Ben Schachter expects Google to introduce an Internet browser.

Shares of Google dropped $8.20 to $276.90 at 8:09 a.m. New York time in Nasdaq Stock Market composite trading.

``It's something I wasn't anticipating,'' said Jeffrey Matthews, a partner at Ram Partners LP in Greenwich, Connecticut. The firm owns the shares. ``They don't need the money. Apparently they want more. Fourteen million shares will depress the price.''

Surging Demand

The company will sell about 14.2 million Class A shares and underwriters will have an option to sell an additional 600,000 shares, according to the filing with the U.S. Securities and Exchange Commission. Google and investors sold 19.6 million shares at $85 in the Dutch auction IPO.

The company will have 191.1 million shares outstanding after the sale. Google said in the filing it has ``no current agreements or commitments with respect to any material acquisitions.''

Co-founders Sergey Brin, 31, and Larry Page, 32, started the company seven years ago in their Stanford University dorm room. They made the company profitable by selling ads that appear alongside the search results.

Google had 56 percent of global search queries in June, compared with 48 percent a year earlier, according to ComScore Networks, which tracks Web use. Yahoo's share fell to 22 percent from 26 percent and Microsoft's MSN search engine rose to 11 percent from 10 percent.

Biggest Buyers

Revenue doubled in Google's first year as a public company. Google beat analysts' profit estimates in all of its first four quarters as a public company. Of the 34 analysts following Google, 23 rate the shares a ``buy'' and nine say ``hold.''

Twelve of Google's 15 biggest investors, including Fidelity Investments and Bill Miller at Legg Mason Inc., raised their stakes in the Internet search firm during the second quarter, according to filings made with regulators this month.

Fidelity, Google's largest investor, increased its stake by 3.99 million shares to 15.9 million.

``We continue to view its prospects very favorably,'' Miller, whose fund has outperformed the Standard & Poor's 500 Index for a record 14 years, said in an e-mail yesterday. Legg Mason funds own more than 5 million Google shares and increased their holdings in the quarter ended June 30, according to an Aug. 11 filing.

$150 Million Fee

Morgan Stanley and Credit Suisse First Boston are managing the sale. The two investment banks managed the company's IPO. Allen & Co. also is assisting in the share sale.

The three firms may share fees of as much as $150 million for the share sale, based on the average fee of 3.6 percent this year on U.S. secondary share sales, data compiled by Bloomberg show.

Credit Suisse spokeswoman Mary Claire Delaney declined to comment on the fees. Morgan Stanley spokeswoman Melissa Stonberg wasn't immediately available for comment.

In U.S. equity sales this year, both initial public offerings and secondary sales, Morgan Stanley is ranked No. 1 and Credit Suisse is ranked No. 8, according to Bloomberg data.



To contact the reporter on this story:
Ron Day in Princeton at rday1@bloomberg.net
Last Updated: August 18, 2005 08:18 EDT