• by Mark Naples , August 12, 2004

Thursday - the day I'm writing this - is the last day to register for Google's Dutch Auction IPO, right? They aren't extending the opportunity - at least that's the latest. So, by the time you read this, it's too late to get in on the early action.

I didn't register. In fact, I hardly even thought about it. Most of the people I know in this space, and by that I mean those who know search, not just interactive, are not playing along either. CBS MarketWatch's Bambi Francisco has been running a fascinating series on the registration through a special blog she set up. Her column today reported that more than two-thirds of the 5,800 who voted said they wouldn't touch Google. Obviously, that still leaves perhaps 1,600 would-be investors who participated in her survey, among the "hundreds of thousands" reportedly registered by the lead underwriters, Morgan Stanley and Credit Suisse First Boston. But, if nothing else, this ratio illustrates how much of the shine has left everyone's longtime favorite Web darling.

Anyone among the "hundreds of thousands" of you who read this space weekly know how much I've lauded Google for their marketing ingenuity, especially as pertains to their brilliant PR efforts around the launch of Gmail. Gmail seemed to give notice to a serious play by Google into Microsoft's space, with nothing less than the desktop in play. April 1 sure seems like a long time ago now though, doesn't it?

I'm all for Google doing things their own way with their Dutch auction and their decision to stick to the schedule, as long as the basic tenets of "going public" are adhered to. That is - providing shareholder value becomes job one. I understand that a certain amount of arrogance usually accompanies Google's kind of strategic thinking. But, this deal is configured to enable the company to enjoy an enormous influx of cash, with the provision of next to zero voting authority - the equivalent of someone betting on a company's success with serious cash, then having no say. This isn't going public as much as it's merely an investor's gambit.

Google didn't help themselves in the run up to their IPO with the disclosure that they had illegally granted more than 23 million shares to employees past and present that were erroneously registered on their SEC filings. Their settlement with Yahoo! had to be embarrassing too, since they had to essentially give their chief rival 2.7 million shares after weeks of claiming that Yahoo!'s legal challenge had "no merit."

How cool would it be to file something without merit and have your competitor settle for, oh, about $290 million to as much as $365 million, depending on the opening price? That's not "without" merit. It's actually a ton of merit.

These two news items may just reflect some sloppiness that is not systemic. Or, they may just point to the aforementioned arrogance. Maybe $300 million or so in stock isn't so meritorious when you expect to make $2 billion in cash in a few days.

Google has enjoyed being regarded as the company that could do no wrong and was driven by a relentless desire to innovate. Its innovations for consumers - especially symbolized by its simple interface and the delivery of the most relevant search results - were augmented nicely by the offerings within Gmail, especially the storage that Hotmail had to counter. Consumers were winning, so consumers loved Google.

At the same time, Google has long been seen as the champion of its customers because of its simple interface for paid listings and its sensible, albeit dynamic, algorithms for natural search. Google was at the forefront of the SEM explosion that has buoyed all of interactive. I was hardly alone in marveling about this company in this space. For months, I couldn't find a bad thing written about them.

However, on the eve of their long-awaited IPO, there's something else that seems too closely tied to this company. As David Menlow, the president of the IPO Financial Network, told The New York Times this week, "Google has been determined not to leave any extra money on the table. That's good for the company, and good for its principals. But there's also the investing public to be considered. It's a problem that they've arranged the deal so that no one else is going to make money at their expense."

Admit it - you knew what the other G-word was when you saw the headline, didn't you?