• by Ross Fadner , August 11, 2004

Two more high-profile Web players--adware provider Claria Corp. and gay-themed Web portal PlanetOut Inc.--Wednesday joined the succession of technology companies that have either scrapped or delayed plans for initial public offerings. In filings with the Securities and Exchange Commission, both companies cited softening market conditions among their reasons, although Claria hinted at other possibilities.

"We feel the appropriate value of the company would not be realized through an IPO at this time," said PlanetOut CEO Lowell Selvin in announcing a delay of the site's IPO. The company did not indicate when it would resume.

Claria canceled its estimated $150 million IPO, but said it may reinstate the plan to go public at a future date. Or it may not, according to a Claria spokesperson. "Due to market conditions, and the fact that a number of opportunities have arisen since we filed our S-1, we are delaying our IPO," the spokesperson wrote in an e-mail.

In recent months, rival adware provider WhenU--which, like Claria, has faced a number of legal challenges--had retained an investment firm to help it "explore strategic options," presumably to raise money for an IPO, merger, or acquisition.

Jupiter Analyst Gary Stein downplayed speculation that Claria's decision had anything to do with its past or current legal battles.

According to a Reuters report, 33 IPOs have been postponed or withdrawn so far this year; seven were postponed or withdrawn last week. Many companies pursuing IPOs are being forced to abandon or reevaluate their filings in response to what has been a very volatile summer for tech stocks. Last week, PlanetOut cut the projected price of its IPO of 4.65 million shares to between $9 and $11 per share, from $12 to $14.

Jupiter's Stein surmised that these companies were probably wary of the "tough week for the market," and the possibility "of being steamrolled by Google's IPO."

Speaking of Google, Claria and PlanetOut's respective decisions will surely leave prospective Google investors wondering what effect these withdrawals might have on the company's IPO, which could begin the bidding process as early as Friday. Several weeks ago, Google controversially set its projected price range between $108 and $135 per share, at a time when tech stocks were steadily rising based on strong financials from companies like search rival Yahoo! Since then, technology stocks have plummeted, mostly due to generally weak second-quarter results.

Google's IPO is now contending with a volatile stock market climate. On top of that, the company was also recently forced to divulge that it illegally issued 23 million shares to past and present employees. Earlier this week, Google also revealed that it settled a longstanding dispute with Yahoo!, in which it had to give its rival 2.7 million Class A shares.

Because the company is in the quiet period prior to its IPO, Google has been forced into defending itself through SEC filings. "Bids may be within, above, or below the estimated price range for our initial public offering on the cover of this prospectus," the company said in a filing on Monday.

Bids could well be below these estimates. According to a New York Times report, a source close to underwriters Morgan Stanley and Credit Suisse First Boston, registration at the Google IPO site has been lower than expected.