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Much ado about Google

Google's decision to use an auction for its IPO sprang from a desire to get what it regarded as a fair price, avoid post-issue upsets and offer fair investor access. Did it succeed in these goals and might it have done better had it shown more respect to its bankers?

The level of media interest in search engine company Google's initial public offering has been unprecedented. Not even Deutsche Postbank's IPO comes close, even though it was bigger, more complex, and more troubled. The German IPO has been mentioned in 125 articles in the Financial Times over the past year, fewer than half as many mentions as Google's, at 267.

Every event and non-event over the course of the deal has been so exhaustively documented that it is hard to see the forest for the trees. Is Google's IPO really that important? Was it a success or a failure? Will it have any influence on other companies IPO strategies? Despite the acres of newsprint none of these questions has been properly answered.

Google's IPO is important for one main reason. It is the biggest dotcom IPO since Barnesandnoble.com's $450 million deal in 1998 and the tenth biggest IPO so far this year. So it is an important test of appetite for new issues, particularly technology IPOs, and for how much investors, investment banks and issuers have learnt about dotcom deals.

The decision of Google's management and main shareholders to play such an active role in the company's IPO was motivated by an important lesson: that on Wall Street, caveat vendor applies as much as caveat emptor.

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