RealTime IT News

Google Auction Imminent

Bidding should begin soon for shares in Google's IPO. The search provider with the billion-dollar search advertising service said bidder registration will close on Thursday -- and bidding will begin shortly.

The bidder registration process, wherein would-be IPO investors must provide their contact information in return for a unique ID number, will close at 5 p.m. eastern time Thursday.

A notice on the company's IPO Web site said, "The auction for shares of Google's Class A common stock will commence soon thereafter."

The announcement is part of an unusual process called a Dutch auction, in which investors name their price for shares. The company then figures out the clearing price, that is, the highest price at which all the shares can be sold. Only those who bid at or above the clearing price get shares.

But Google also, in compliance with SEC regulations, set a suggested price range for the 25.7 million shares of $108 to $135, a price many think is too high.

The IPO was originally expected to be worth about $2.7 billion; it could raise as much as $3.3 billion -- after bankers' fees. According to its unaudited financial statements, the Mountain View, Calif., company took in $1.35 billion in the first six months of this year and netted $143 million, or a diluted 54 cents per share.

On July 30, ipo.google.com opened for business, allowing people to register and obtain an ID number. Bidders must have an account at one of the participating banks, which include two online brokerages, E-Trade and Ameritrade.

Google's prospectus advised that bidding registration would take about a week, although no deadline was set. Many analysts believe that the period was extended due to low response.

The company continues to clean house in anticipation of the offering. On Monday, it settled a simmering patent infringement suit brought by archrival Overture Services, the division of Yahoo that pioneered the pay-per-click, bid-for-placement advertising model used by Google's AdWords and AdSense services.

Google gave Yahoo, one of its largest investors, 2.7 million shares of Class A common stock, which could be worth more than $280 million. The stock gained Google a license to the patents for their full term; it also ended a dispute about warrants for stock owed to Yahoo for an advertising agreement.