Google LCC is a transnational corporation that provides various services and products related to Internet technologies. It offers software, online advertisements, and search. The company was established in the United States in 1998. The Google initial public offering (IPO) occurred in 2004. However, the path to the IPO was not easy. The main goal of this paper is to discuss aspects that had a major impact on the results of Google IPO.
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Google was established in the late 1990s characterized by the rise in IPOs. In the 2000s, the number of IOPs decreased by more than 70 percent in comparison to the 1990s. However, many IT companies that decided to go public were not developed enough, and they were shut down within 2 or 3 years. Also, some specialists state that the IPO market was not ready for all these companies. Therefore, Google should not have gone public during that period as it harmed investors. Many specialists insist on the fact that the IPO market was not stable back then because investors did not want to put their funds into high-risk ventures.
Potential stockholders perceived Google as a very extraordinary company. Also, possible investors were concerned about some miscalculations that occurred from time to time. Also, Google executives were accused of various SEC violations. They insisted on the fact that Google was not a traditional company, and it could not abide by conventional principles. They wanted to divide all stocks into two parts one of which would be under the total control of the company. Moreover, Google executives did not explain to shareholders what they were going to do with their capital. Therefore, for many investors, it was a justified decision to avoid this company as they did not want to pass on their funds without knowing how exactly this money would be used. However, Google had several options. Some of them were hiring more professional seniors and establishing training programs for personnel. These options were the most promising as investments in these areas could improve the overall performance of the company. Also, stocks could be used as compensation to reward the company’s employees.
Google was faced with several serious problems before its IPO. However, some of them were caused by their policies. For example, when the conflict with Yahoo! took place, Google gave it more than $300 million worth of the shares. Another problem occurred when Playboy published an interview with Google founders. The interview violated one of the SEC’s principles. This rule forbad the company’s members to provide information that could affect IPO results before the initial stock sale. This incident repelled many potential investors. Another significant issue hurt the Google IPO. 31 companies were going to underwrite the offering. However, some of them dropped out, which caused rumors that the stock offering was overpriced. It significantly hindered the success of the IPO.
However, some of Google’s strategies were very effective. The company attracted many customers with wireless search capability ensured using mobile technologies. Google cooperated with different companies whose clients had access to a large database via their wireless devices. The main goal of the company was to make all information in the world accessible. Another important strategy Google applied was advertising. The company established its advertising system. This move caused much interest among companies that needed to post their commercials on the Google website. This strategy has not changed since the company went public. The company provides services that allow users to find ads that they need. Advertisements are shown only to users who are interested in them. I do not think this strategy should be changed as it attracts more and more customers every day.
Except for China, Google is the major searcher in the world. This company controls more than half of the shares on the search market in the United States. Moreover, this number is growing. Therefore, the main recommendation to Google investors is to hold shares. Buying new shares is still not very safe because this company often undertakes high-risk steps. The philosophy of Google executives is very unique. They do not follow conventional rules and principles, and such a perception caused financial loss several times.
Google uses different marketing strategies to market its IPO. One of the main principles of the company is identifying its audiences. To do that, Google specialists focus on aspects like distinct characteristics of target investors, an IPO impact on current and potential customers, and communication with shareholders and strategic partners. Google constantly monitors the demands of its audiences. Communication is a process that requires assessment and preparation. The company works with major financial and business media through which it passes on important messages that can attract new investors and retain current ones. Therefore, communication serves as a basic strategy to promote the Google IPO.
The Google IPO was very different from other offerings that well-developed IT companies made. It was supported by numerous small investors who put their money into this risky venture. However, share prices increased drastically for a short period, making such investments highly profitable. The Google IPO is a unique case in the history of the development of technology companies in the United States.