Google's IPO

As someone who looked into friends turned foes Yahoo and Google while earning my BBA, I have started tracking Google's IPO which, along with Gmail, will result in all out war with Yahoo. This IPO is interesting, not just because the Internet wars has breathed in a new wind, but because Google is doing it differently.

In the dot-com era, IPOs were run as much for the benefit of the Wall Street underwriters as for the companies. Wall Street firms would set a price at which a company would sell shares to the broad investing public and distribute the shares. In practice, underwriters would dole out many shares to favored executives at client companies, or to hedge funds and mutual funds that threw a lot of trading business to the underwriters. By setting the price for dot-com stocks artificially low and by deciding who could get in on the IPO at the artificially low price, underwriters had a license to make their friends and clients rich in a matter of minutes, when frantic individual investors bid up the shares. (Before Eliot Spitzer came along, these conflicts of interest were known in Manhattan as "synergies.") In exchange for suppressing the offering price and thus depriving their client of needed capital, underwriters in most dot-com IPOs typically helped themselves to a fee totaling 7 percent of the offering.

But Google has largely cut out the underwriters. Its IPO is being structured as a Dutch auction. Any investor can submit a bid for as few as five shares. The underwriters will tally all the bids. They'll start at the top—$150, $200, whatever—and work their way down until all the shares are spoken for. That price then becomes the clearing price, which Google intends to use as the IPO price. There's no penalty for bidding high—if the clearing price is $140 and you bid $200 you'll pay $140. Those who bid under the clearing price get nothing.

- Daniel Gross

The other big factroid surrounding the IPO is how much they are asking. While a "typical initial public offering (IPO) will have a price range of, say, $12 to $14" or "if the offering is red-hot... $22 to $24", instead the price range is $108 to $135.

Based on its current share count, that's a valuation range of $29 billion to $36 billion. That's Yahoo! (Nasdaq: YHOO) country.

Some pundits say that the high stock price may scare away retail investors. Well, whenever there is a mania, no stock price is too high. After all, in the late 1990s, investors had no mental hang-ups when paying more than $200 per share for stocks such as, well, Yahoo!

A company with a $100-plus stock price is unusual in technology. In fact, it has become much more common to see tech stocks at lower prices. Even marquee tech giants, such as Intel (Nasdaq: INTC) or Microsoft (Nasdaq: MSFT), are in the $20 zone.

- Tom Taulli

How much is that worth really?

For $108, the prospective low end cost of a single Google share, you could buy an IBM (nyse: IBM) laptop battery or a motherboard for your computer. For $135, the upper range of the IPO, you could buy an Adirondack chair or a night at a hotel in Saratoga Springs (where, by the way, you could take another $135 to the racetrack and parlay it).

For $29 billion, you could make whole the world's software industry for their losses from pirated software last year (that number coming from a software trade group, so it may be inflated). You could also pay the cost to the 50 states from unfunded mandates imposed by the federal government. You could also buy, at the latest average price, roughly 152,000 new homes, enough to house (at four people per home) everyone in the city of Boston.

Raising the stakes to $36 billion, you could pay Microsoft (nasdaq: MSFT) back for the cost of its special dividend--and have $4 billion in change. Or you could house Baltimore. Or you could pay the entire U.S. foreign aid bill twice (not counting Iraq).

For $2.7 billion, the low end of what Google is looking to generate in its IPO, you could close New Jersey's budget deficit. You could also buy everything exported by Minnesota in the first quarter of this year. Raise the ante to $3.3 billion and you could fund the debt relief for Ethiopia (now covered by the World Bank and the International Monetary Fund).

- Dan Ackman

What I found most surprising from Ackman's article is "that Google would, to investors, be worth more than Ford Motor (nyse: F), Vivendi Universal (nyse: V), or Schering-Plough (nyse: SGP), and perhaps as much as Boeing (nyse: BA)."

According to Bambi Francisco, the first 6 months of this year Google had a operating profit of $326 million, with $1.3 billion of sales (25% profitability). Yahoo had only $281 million with 1.59 billion of sales (17.7% profitability). Her article is more number-gritty and explores the industry as a whole, so if interested, check out that link. The current date for the IPO is August 9th. Besides now offering 100 MB free, I wonder how Yahoo will attack back. A new free blog service perhaps?

Right-wing Israelis join hands in protest over Gaza

By Eric Silver in Jerusalem

26 July 2004

Tens of thousands of right-wing Israelis formed a 55-mile "human chain" from Gaza to Jerusalem yesterday in protest at Ariel Sharon's plan to evacuate 21 Gaza Strip settlements by the end of next year.

Most of those lining the route to the Western Wall in the old city were young religious families, waving Star of David flags and sporting orange caps and T-shirts with the logo of the Gush Katif settlement block.

As I drove away, a few tried to block the main Jaffa Road, but the police gently moved them on. It was a good-natured picnic of a demonstration.

The organisers, who had called for a "forceful, but non-violent struggle" claimed a turnout of 100,000 to 150,000, including foreign Jewish and Christian supporters.

They chartered 800 buses to distribute them along the route. "The expulsion of Jews from Gush Katif would cut a link in Israeli society's spinal cord," read a leaflet.

Hava Lester Elboim, 32, a British immigrant, said: "We believe the government is making a big mistake. The Prime Minister is not acting in the national interest. He wants to go down in history as the man who took Israel out of Gaza. But we have a tiny land. We don't have anywhere else." Reminded that they shared it with three and a half million Arabs, she said: "The Arabs have 22 states. Look at all the space there is in Saudi Arabia. I'm not saying they should all go there. If they want to live here as good citizens, they're welcome to stay."

Aharon Levin, 23, a student, added: "The people of Israel want to hold on to every part of the land of Israel. It's one land, and it's not for sale."

Some of Mr Sharon's Likud party ministers and MPs joined the human chain, as did leading pro-settler rabbis, but the secular majority stayed away.

A poll published in the mass-circulation Ma'ariv newspaper on Friday found 65 per cent of Israelis ­ and 61 per cent of Likud voters ­ in favour of Mr Sharon's evacuation plan. The Likud support had risen 5 per cent in as many weeks.

Israeli soldiers shot dead six Palestinians yesterday, including two commanders of a militant group from President Yasser Arafat's Fatah movement, in a gun battle in the West Bank town of Tulkarm. Later an Israeli F-16 warplane fired two missiles at a militant stronghold in Gaza City.

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Source

So how is Gmail?

One reason I decided to get this blog now instead of waiting is because I am the lucky few to get Gmail. The extra space is the biggest plus, but what about the other things? Here is my humble opinion.

As an online service, there is an occasional slight lag when it is loading up (you can't view the HTML code), but very fast and efficient once your in. I have a 56K modem.

When sending test mails back and forth, Yahoo immediately told me when I got new mail. Didn't happen with Gmail. Since it seems to connect to an external database, there is like a maximum 2 minute lag, which is how often it checks for new mail. This can spell bad news if you got a delivery failure notice.

The actual letters themselves are now called 'conservations'. You know how e-mails tend to get longer and longer as the older letters are put on the bottom and newer responses are at the top? Gmail automatically sort this out and put it in separate boxes. I consider this a good thing, but the older ones are at the top!

Instead of folders, there is labels. They can be used as folders, but one letter... excuse me... conservation can have multiple labels. Since a label is more of a search tool than an organization tool, your conservation stays in the inbox. If you want a tidy box, you can archive letters. This removes it from the inbox, but it is still there. By clicking on "All Mail", you can see all the archive mail... and those in the inbox and mail you sent. Yes, Google was thinking more about searching, not organizing. So use those labels! If nothing else, one called 'other', if you want an empty inbox but not wanting to see every single conservation you got! You can also put a star on those conservations you consider important. It acts just like a label.

Bugs? Besides missing features, I only caught one. On I.E., the browser thinks it is loading something on the page when the page is already up! Haven't caught Netscape doing this. Note: The fact that my I.E. is plagued by spyware might be the reason.

As for those missing features, I think this is the main reason it isn't public yet. It is usable, but there is a lot that could be done. For one, how it works with addresses is horrible. It automatically adds a new contact for every new person who contacts you instead of asking if you want to. You also can't open the window and add address to an e-mail that way. (It does have auto complete though) Google is working on this. There is a way though to import an address book from existing ones, like the one I had with Yahoo. Also there is no HTML option and, a bigger pet peeve for me, how long length wise your plaintext letters can be. This is also being worked on. Other things: POP3, automatic msg forwarding, and ability to save as a draft.

I haven't tried attachments yet. I do know it doesn't allow exe files, even zipped.

The First Post

What I *wanted* to do is hold off on this till I got a new job, but I gave up and decided to go ahead and do it.  I am doing this for several reasons.

• Instead of being one of those blow-by-blow accounts of ones life, >*bleah*<, I am going to list major events here.  That way if I seem to disappear, my e-pals and family can just check this and see if there is a reason why.
  
• Job ranting.  Once I get it.  Ugh
  
• To include things I can't do anymore on my website, Freewebs.  They said they have a 100 file limit... but it is a 100 UPLOAD limit!!!  BAH!  So I may have the occasional essay type of a post rant about some news thingie, or to simply blab about something that has been on my noggin.
  

This blog, at least for the moment, is private.  Mainly due to the first reason.  I only want e-pals and family to know about this.  After some time I might do some other things.  We'll see.