Chapters 9 and 10
Daniel Parker
Chapter 9
Google Goes Public
Google Goes Public
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Google’s fast rise to fame sparked rumors that
the company would soon go public
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Reports in 2003 showed that Google’s revenue
was almost $1 billion, and their profits reaching
over $300 million
Google Goes Public
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By the end of 2003, it was believed that
Google’s initial public offering (IPO) would be
valued at approximately $16 billion
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This was in the range of established companies
such as Amazon.com
Google Goes Public
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For years Google was adamant about never
going public as a company
However, a little know SEC rule required
companies who gave stock options to more than
1,000 employees to report as a public company
The fact that Google did this and had begun
taking money from venture capitalists pretty
much guaranteed that Google had to go public
Google Goes Public
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On April 29, 2004 Google filed its formal public
offering document
Google declared it would sell $2, 718, 281,828
worth of shares
This number was equal to the mathematical
concept of e, which is similar to pi
Google Goes Public
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Google handled going public different from most
companies
Instead of allowing an investment bank to handle the
process, Google used a public auction to set the price
of its stock
Google also had a “dual class” shareholding structure
This meant that the founders and senior executives
would hold a lot more control than common
shareholders
Google Goes Public
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Google experienced a few problems going public
The Sarbanes-Oxley Act: tightened rules on companies
when it came to accounting for revenue
Because Google made their money by the penny, they
had to restructure its advertising reporting system
Google was also reprimanded by the SEC for offering
millions of shares to employees without registering
them
Google Goes Public
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On August 18, 2004, Google officially went
public with shares going at $85
By then end of the day, the stock rose to $100 a
share
By the next day shares were selling at $108.31
By November of that same year, shares had
reached $200 per
Chapter 10
Google Today, Google Tomorrow
Google Today, Google Tomorrow
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After officially going public, Google had to do a
complete overview of their company in order to
prepare for the future
Google hired Shona Brown as vice president of
business operations to ensure they were
performing as a big time company
Google was essentially becoming a new
company
Google Today, Google Tomorrow
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Google is now organized into core groups by
function- core search, advertising products, and
products known as “20 percent” and “10
percent”
These products came from Google’s
“imaginary” product development process,
where engineers are encouraged to take on
additional projects
Examples of this are Gmail and Google News
Google Today, Google Tomorrow
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In 2004, Google dropped its Top 100 list,
choosing instead to have different segments of
the company its own list of projects
Having achieved a revenue growth of over
400,000 percent in five years, Google was named
the fastest growing company ever by the
accounting firm Deloitte Touche
Google Today, Google Tomorrow
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In 2001, Google’s main competitor, Yahoo, was
hurt by the markets and almost went out of
business
Yahoo had to lay off hundreds of workers and
merge its cost base
Because of this, their stock dropped from highs
of $500 to lows of $10
Google Today, Google Tomorrow
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Google and Yahoo differ as far as their search
goes
Example of the term “usher”
Google gives some Google News stories on the
singer, with AdWords on the right, with the
majority of the page showing the top 10 results
Google Today, Google Tomorrow
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Yahoo on the other hand gives organic results along
with an “also try” feature; this allows Yahoo to watch
what users are searching for
There are also two sponsor results at the top of the
page
Yahoo is more aggressive when it comes to
commercializing on their site
Yahoo also has a search shortcut to brings all important
information about a topic to one place
Google Today, Google Tomorrow
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Google tries to solve things by strictly using
technology, without the need for humans
Yahoo approaches problems with the idea that
humans are needed to find solutions