| Searching for Capital |
27 October 2003
|
Google IPO Slated for Next Year
Just as xerox has become a verb meaning to photocopy, google has become the action word meaning to search the internet. It is derived from the search engine Google.com. While there are countless such engines, Google.com has become the most popular. It is also likely to go public in the $16 billion range. The reasons for the firm's success lie in very old-economy ideas.
For example, the company does something that people want done. Searching the internet to find whatever information exists takes almost no time at all, and that brings people to the website. Because of the popularity of the site, advertisers have cybernetic foot traffic, making it worth paying Google for access to those people. Google sells advertiser-sponsored search listings, perhaps its biggest source of revenue.
Google, and a handful of other internet successes, never bought the nonsense that there is something new about the internet. It is merely a medium of communication. It has certain features in common with the phone, some with broadcasting, but ultimately, it is just a way of spreading data. Any business model that can make money by spreading information will have a chance in cyberspace. Any model that doesn't take into account what the internet does is probably doomed.
Google may be worth $16 billion, and the IPO may spark a revival in the tech sector's fortunes. Then again, maybe not. The fact that Wall Street can even consider an IPO of this size in the case of Google says one thing very clearly, though, "The bottom line matters."
Home