Google is urged to go public

The highly successful search engine is considering a flotation that could value it at £170m
Written by Graeme Wearden, Contributor

Popular search engine Google has revealed that it could be close to floating on the stock exchange.

Despite the massive drop in the valuations of dot-com and high-tech companies since the 'Internet bubble' burst last March, at least three investment banks believe that Google is worth hundreds of millions of pounds.

In an interview with the Sunday Business newspaper, founder Sergey Brin said that it was more likely than not that Google would go public -- but emphasised that the company was not desperate for additional funding.

Google was created by Brin and Larry Page, both of Stanford University. Such is Google's popularity that it is now the most used search engine in America, and handles around 100 million search requests per day. Its success is attributed partly to its uncluttered and advert-free interface, but mostly to its innovative technology.

Google rates a Web page according to the number of other Web pages that link to it, rather than just how many times a search term appears with in a page. As Google has decided not to spend money on costly advertising blitzes, its success is due to satisfied users recommending the search engine to friends.

Rather than carrying lots of advertising, Google makes money by licensing its technology to other companies. Last June Yahoo! signed a deal to use Google's search technology, while in the UK Vodafone uses Google for search requests on its WAP portal. Such deals are thought to be worth up to £700,000 each.

According to Sunday Business, Morgan Stanley, Goldman Sachs and Deutsche Bank have each produced proposals to take Google public, valuing it at around £170m. While the current difficult economic conditions mean that some financial institutions are desperate to make such deals, and to bank the resulting fees -- analysts agree that Google is going to be one of the new economy's big success stories. One expert recently estimated that its annual revenues would reach £35m by 2002.

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