Google Sets IPO Price Range, Reports Q2 Earnings

NEW YORK Google and its stockholders plan to sell nearly 24.6 million shares in the company’s initial public offering for $108-135 per share, according to an amended prospectus filed with the Securities and Exchange Commission this morning.

At that rate, the auction-style IPO, led by Morgan Stanley and Credit Suisse First Boston, could be worth $2.7-3.3 billion. Google plans to offer 14.1 million shares, while its stockholders are expected to sell another 10.5 million.

The shares will be sold on the Nasdaq under the symbol “GOOG” and could be delivered to purchasers as early as next month.

The Mountain View, Calif.-based search company said it intends to use the net proceeds from the offering, estimated to be $1.66 billion, for general corporate purposes, including working capital and possible acquisitions of complementary businesses, technologies or other assets.

For the second quarter, Google reported net income of $79.1 million on revenue of $700.2 million, up from earnings of $64 million on revenue of $651.6 million in the first quarter. While Google’s quarterly revenue increase totaled 7.5 percent, it was significantly lower than the 27.2 percent jump recorded from fourth-quarter 2003 to first-quarter 2004.

The company attributed the slower growth in part to a decrease in the number of page views and search queries—and, ultimately, paid clicks—on Web sites belonging to the Google Network. It also said that advertising revenue on its own sites was down due to seasonality.

Ad revenue represented 98 percent of Google’s overall revenue in the first half. Businesses use Google’s AdWords program to promote their products and services through keyword ad buys, while the company’s publisher and search-site partners use AdSense to deliver relevant ads. Google said it did not sign any significant AdSense-for-search arrangements in the quarter—another contributor to the slowdown in quarterly revenue growth.