Google has selected two high-profile investment banks to underwrite its initial public offering, fueling rampant speculation that the search-engine leader will file to go public sometime this week.
The company tapped Credit Suisse First Boston and Morgan Stanley as lead underwriters for its offering, which is expected to be the largest and most sought-after technology float in the last four years.
The prestige of those bankers underscores the blue-chip nature of Google’s IPO and adds even more cachet to the company’s top-notch pedigree, which includes backing from some of Silicon Valley’s best-known venture firms, including Kleiner Perkins Caufield & Byers and Sequoia Capital Partners.
Despite the apparent appetite for its stock, Google may be going through the IPO window reluctantly. Because it has grown so much, it already may be covered by U.S. Securities and Exchange Commission rules that say it must report earnings quarterly. However, some executives at the company are said to want to retain strategic control of the firm for as long as possible.
Even so, the timing may not get any better. Microsoft is set to debut its own entrant in the search-engine market later this year, and Yahoo has been working feverishly to match Google’s features. In fact, Yahoo announced today that it has integrated search into its instant-messaging product.
“If you are going to go public, the time to do it is when you’re on top, and right now that’s where Google is,” Forrester Research analyst Charlene Li told the E-Commerce Times. “As good a company as Google is, anything can happen, especially in the search market, and that may not be the case in six months or a year.”
Pressure from venture capitalists and options-holding employees to cash out at the best possible moment also may drive Google to move forward with its IPO, Li noted.
For his part, Yankee Group analyst Rob Lancaster said Google has been laying the groundwork for its IPO for some time, steadily adding services that augment its core search technology without straying too far.
“They seem to be showing that search can become just a basis for a lot of other Internet features and tools,” Lancaster told the E-Commerce Times. “The suggestion is that they can not just be the kings of search, but leverage that into something even bigger.”
Also on Monday, Google revealed it has begun hiring staff for a research lab in Tokyo, extending its reach to a fourth overseas country. The company emphasized the move does not reflect a desire to move U.S.-based jobs overseas, but rather a need to take advantage of engineering talent wherever it can find it.
Google said it also will operate an advertising sales office in Tokyo and will hire more engineers to augment its existing development facilities in California, New York, Switzerland, Ireland and India, where it set up shop late last year.
Overseas labs could help Google accelerate the pace at which it develops new Web technologies, because engineers in the Far East and in the United States essentially will work alternating shifts.
Meanwhile, Google has learned it will face another trademark-infringement suit based on its advertising keyword system.
This time, the company is being sued by French insurance firm AXA over the fact that rival insurance company ads appear when users search for the company’s name. Google has faced similar lawsuits by U.S. companies.