Google geniuses to cash in with share float

By ANDREW GUMBEL

LOS ANGELES - For a long time, Larry Page and Sergey Brin were dismissed as the johnny-come-latelies of the internet revolution. They wanted to start a search engine at a time when Yahoo! and Altavista had already seized the limelight. They were looking for venture capital when most of the big money for internet start-up companies had already been allocated. They claimed to have stumbled on the Big Idea - the "killer app", in Silicon Valley jargon - at a time when every two-bit dot-commer was running around claiming the same thing.

But nobody now has any argument with Google, their fabulously successful product which has not only blown every other search engine out of the water and survived the dot-com meltdown intact, but has entered the common lexicon and popular culture.

When the news broke on Thursday that Google was, at long last, contemplating a public share offering, it had a gleefully rejuvenating effect on the Silicon Valley geeks and entrepreneurs who have been stuck in the doldrums for the past three years.

It felt, in other words, like 1999 all over again.

Financial consultants in the San Francisco area talked excitedly of taking a whole new generation of internet companies to market. Even the staid, buttoned down Wall Street Journal optimistically predicted that the floating of Google would be the most valuable share offering since the tech bubble burst. With so many reasons to thank Messers Brin and Page, hardly anybody was begrudging the Stanford University computer science graduates the $8 billion they may share by cashing in.

Brin and Page, who started Google out of a Silicon Valley garage five years ago, have a long track record of taking their time. They spent more than two years picking a chief executive officer -- so long, in fact, that one of their key backers, Michael Moritz of Sequoia Capital, threatened to pull out if they didn't hurry up.

"I felt I grew tusks," Mr Moritz said at the time. Yet, at 30, they have already achieved far more than most. They were recently ranked eighth and ninth in Fortune magazine's richest under-40s (valued conservatively at $1.5 billion each).

Brin, who was born in Moscow, and Page, the son of a Michigan University computer studies professor, met in 1995. Backed by family and friends, they started work on what became Google in 1998.

Admittedly, they have had to negotiate some fairly rocky territory, figuring out how to sustain a viable business model when the rest of the dot-com world was falling apart around them, and also how to protect the impartiality -- both real and perceived -- of their search engine even as they introduced advertising and weathered the complaints of multiple competing commercial interests.

As things stand, they have earned the unqualified admiration of their peers. Google (the name derives form Googol, the term for a number starting with one followed by 100 zeros) handles as many as 75 per cent of all search requests conducted on the internet- around 200 million of them per day, according to the company's own figures. Googling people, companies or idle points of information has become second nature to millions of computer users.

When the big-money question gets asked on the US version of the quiz show Who Wants To Be A Millionaire?, tens of thousands of TV viewers can be counted on to type it into their Google search page. There is even a game, Google Whacking, where contestants try to enter two words which will yield one and only one response.

Everything about the company strives to be innovative and a little bit different. Its offices, nicknamed the Googleplex, are filled with enticing toys to give employees a break -- everything from a pool table to a baby grand piano. The company decided to provide free, health-conscious gourmet food at its in-house cafeteria -- cooked by a former chef for the Grateful Dead -- after conducting extensive computerised tests on the resulting savings in employee time and company health insurance costs.

Google employs only the top echelon of engineers and programmers and subjects them to a rigorous interview process. In exchange it offers extraordinary perks including midweek, all-expenses-paid ski trips and generous maternity and paternity packages.

It also encourages new thinking in every way it can. Company engineers are grouped into committees of three and encouraged to compete with each other for the most audacious, most cutting edge new projects. Sometimes the ideas come and go -- such as a brainflash a few months ago that Google could host a nanotechnology lab -- and sometimes they stick. Hence the unusual approach to advertising, which is intimately linked to Google's pioneering method of searching out webpages according to their popularity and inter-relationship with each other, not just according to keywords.

It was this search approach that has accounted for almost all of Page and Brin's success. One early investor, Andy Bechtolsheim of Sun Microsystems, was so impressed that he wrote them a $100,000 ($164,000) cheque on the spot. The search method was then augmented by the extraordinary speed with which Google managed to present its results. "Good algorithms" is how Monica Henzinger, head of Google's research department, once explained it.

Nothing, as yet, is official. The news was broken by the Financial Times, which reported that top Google executives had been meeting investment bankers and considering the possibility of a giant electronic share auction, rather than the more conventional type of public share offering organised by Wall Street investment banks. The float itself, estimated to be worth anywhere from $25 billion to $40 billion, probably wouldn't take place before March.

Subsequent reports have indicated that Google is conducting a thorough interview process to select its financial representatives and has, to date, trimmed its list of would-be investment houses to about half a dozen top contenders. Google itself, which likes to play its business cards very close to its chest, has made no comment.

The excitement, however is palpable, as are the inevitable misgivings. The computer geeks, who have always been suspicious of the money men, wasted no time yesterday in voicing the suspicion that Google was selling out.

"Didn't we learn anything from the '90s?" asked one poster on the Slashdot website. "I mean, there is no reason for Google to go public other than greed. They are making plenty of money on their own right now and I doubt that they are in need of cash for business purposes."

Nobody, however, could accuse the company of rushing into a decision. Rumours of a possible share offering have been circulating for more than a year, fuelled in part by the extreme reluctance by company officers to give interviews to the press. (Initial Public Offerings, under US law, entail a lengthy no-comment period in the immediate run-up to a share flotation.)

One big question raised by the possibility of a public offering is the issue of confidentiality. For now, Google keeps the precise nature of its search technology a closely guarded secret. It is also super-discreet about its financial performance and ownership structure. Financial analysts looking at its base of about 100,000 advertisers estimate it clears some $250 million in annual profits on revenues of about $820 million.

That secrecy would, of course, be lifted if the company goes public.

- INDEPENDENT