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Google details IPO offering

Two people walk past the Google Inc. headquarters in Mountain View, Calif., on Monday. (Associated Press / The Spokesman-Review)
Associated Press
Two people walk past the Google Inc. headquarters in Mountain View, Calif., on Monday. (Associated Press / The Spokesman-Review)

SAN JOSE, Calif. — Google Inc. said Monday it would sell 24.6 million shares in its initial public offering at an estimated price range of $108 to $135 per share, giving a long-awaited indication of what the leading Internet search company believes it is worth.

That would value the shares being offered in the IPO, which is expected to happen in August, at $2.66 billion to $3.32 billion. However, the amount the company itself expects to raise is $1.66 billion, because some of the shares are being sold by existing stockholders.

Overall, Google, which is offering only 9 percent of its stock in the IPO, would have a market capitalization of $29 billion to $36 billion, counting shares held by insiders.

The average market cap in the S&P 500 is $21.25 billion. At $36 billion, Google would be worth more than such corporate stalwarts as McDonald’s Corp. and Sony Corp. and almost as much as drugstore giant Walgreen Co. Google rival Yahoo Inc. has a market cap of nearly $38 billion.

Shares in Google, based in Mountain View, will be distributed in an auction intended to give the public a better chance to buy stock before shares begin trading. In the past, IPO shares have been restricted to elite groups picked by investment bankers handling the deal.

Once trading of the shares begins on the Nasdaq Stock Market, Google expects to have the ticker symbol “GOOG.”

Google’s filing Monday with the Securities and Exchange Commission gave an updated picture of its growth, fueled almost entirely by advertising linked to online searches.

For the three months ended June 30, Google earned $79.1 million, or 30 cents per share, compared with $32.2 million, or 12 cents per share, in the same period last year. Sales more than doubled, to $700 million in the latest period from $311 million last year.

In the first six months of 2004, the company earned $143 million, 54 cents per share, on revenue of $1.35 billion. In the comparable period last year, its profit was $58.0 million, 23 cents per share, on revenue of $560 million.