Google to IPO

From the Finan­cial Times comes the news that Google is con­sid­er­ing an IPO that could value the com­pany at any­where between 15 and 25 bil­lion US dollars.

This is an inter­est­ing devel­op­ment con­sid­er­ing the fact that Sergey Brin has down­played rumors of such an IPO for months. First inklings of the poten­tial came in August when Brin talked at the Search Engine Strate­gies Con­fer­ence about the poten­tial (full dis­clo­sure: the Search Engine Strate­gies Con­fer­ence is run by Jupiter­Me­dia, which is the com­pany that now runs internet.com and developer.com, two sites I co-founded).

What is inter­est­ing here is the fact that Google saw an IPO as a way to gen­er­ate cash for acqui­si­tions. So if Google goes pub­lic, the ques­tion then becomes who they plan to acquire. At a mar­ket cap of $25 bil­lion, Google would essen­tially match Yahoo! so such acqui­si­tion would prob­a­bly not hap­pen, unless Google would look to a merger of equals between the two com­pa­nies, con­sol­i­dat­ing both com­pa­nies’ posi­tion in the search space before the upcom­ing onslaught by Microsoft. On the sim­pler side, it might want to pick up Looks­mart, Findwhat.com, and Ask Jeeves, con­tin­u­ing to solid­ify its mar­ket share in the search space.

Alter­na­tively, Google could be look­ing into the adver­tis­ing space, lever­ag­ing off its suc­cess in that arena and pick­ing up Dou­bleclick as a way to solid­ify its rela­tion­ship with larger adver­tis­ers, pro­vid­ing them with a one stop shop for all your mar­ket­ing needs. Con­sid­er­ing its recent announce­ment regard­ing the acqui­si­tion of Sprinks from Pri­me­dia, such an evo­lu­tion seems to make sense.

Or it could go the route of acquir­ing more pri­vately held com­pa­nies, as it did with Pyra Labs, mak­ers of Blog­ger, and more recently Kaltix, which spe­cial­izes in context-sensitive search.

Of course, those are just wild pre­dic­tions and I may be off the mark but it is inter­est­ing that Google would con­sider an IPO when it’s been say­ing all along that it would be more of a dis­trac­tion. Con­sid­er­ing that Google is rumored to be prof­itable (since it’s pri­vately held, it’s impos­si­ble to tell beyond rumors), the IPO is not about pump­ing cash into the exist­ing stuff. It’s clearly about expand­ing. The ques­tion that remains is in which direc­tion is that expan­sion going to happen.