Washingtonpost.com: Google Stays on Track Despite Best Efforts

Byline: Cynthia L. Webb

It looks like Google will be Miss August after all.

The Securities and Exchange Commission won't delay the search engine company's planned public stock offering even though co-founders Sergey Brin and Larry Page appeared in an interview in Playboy magazine , USA Today reported. Financial experts had worried that the interview -- the latest in a series of quirky moves -- might violate SEC-mandated "quiet period" rules and delay the IPO.

That's all well and good, but Google might make an even bigger splash than the IPO could ever achieve. The Wall Street Journal reported that the company's unorthodox approach to the going-public game is one of the reasons the SEC is considering whether to overhaul its 71-year-old regulations. "During the late 1990s, Internet companies pushed the edges of the quiet-period rules, ramping up heavy marketing and advertising during the time leading up to their IPOs, calling such spending normal business activity," the Journal reported. "Given the hazy rules, companies often clam up and stop communicating any information about the business. ... But the rules, written decades ago, have caused headaches for many companies, in part because they don't take into account new technologies, such as the Internet and e-mail."

While Google's IPO timing appears to be on track, it performed some clever acrobatics to save face in light of the Playboy romp. USA Today noted that Google updated its regulatory filing with the text of the interview (That ought to spice up the average SEC filing), corrected some outdated details of the article and acknowledged that share buybacks are possible. "We would contest vigorously any claim that a violation of the Securities Act occurred," Google said in its amended filing .

"These steps are considered a sufficient remedy because they make the company responsible for the accuracy of the contents of the article. It also makes the information available to all potential investors," USA Today wrote. "If the company didn't take those steps, the SEC could delay the offering. Avoiding that was critical for Google, because further delays could put the deal dangerously close to Labor Day, a slow time for IPOs. Many traders are expected to be on vacation in late August and early September.

Google's promise didn't mollify the San Jose Mercury News. "Although legal experts describe the missteps as relatively benign, they've nonetheless become a pesky distraction reflecting badly on Google, just when management would like new investors to get on board," the paper said. "Some experts said the contents of the Playboy interview are hardly grounds for concern -- if financial hype is the measure. There is almost no talk of revenue or profit. However, there is much talk of Google's ethics and vision, including a futuristic comment by Google co-founder Sergey Brin that ultimately Internet search engines like Google will have 'the entirety of the world's information as just one of our thoughts.'" * USA Today: Google IPO Won't Be Delayed By SEC * The Wall Street Journal: SEC May Update Rules Governing IPO 'Quiet Period' (Subscription required) * San Jose Mercury News: Google Scurries To Clarify New Goof (Registration required)

The Google scoop has been great PR for Playboy, the Journal reported. "This isn't the first Playboy interview to generate controversy in the feature's 42-year history. Most famously, in 1976, then-presidential candidate Jimmy Carter created a stir by telling the magazine, 'I've committed adultery in my heart many times.' Playboy has also featured several technology executives, including Bill Gates and Larry Ellison . But this is the first time [Playboy features editor Stephen] Randall remembers an interview becoming a part of an SEC filing." For the record, the magazine interviewed Apple Computer co-founder Steve Jobs in 1985. * The Wall Street Journal: Interview With Google Founders Is Publicity Boon for Playboy (Subscription required)

Betting On Google

As for the price of its shares, Google's auction process perhaps should be taking place in Las Vegas instead of cyberspace. The New York Times wrote about the types of investors Google's auction is attracting, including Violet Trout of Kentucky who has never bought stock before. "Ms. Trout was just one of the countless brave souls hoping to buy a small piece of Google in an auction expected to conclude some time this week. The competition to win pieces of Google involves suspense and strategy - not unlike the mind games people suffer through when bidding on a house in a hot real estate market. Some bidders are as inexperienced as Ms. Trout; others have long track records of winning and losing millions in the stock market," the paper said. Now for the gambling: "If all the winners bid high because of the hype surrounding Google, they may find themselves paying too much for a piece of an overvalued company whose shares plummet once they begin trading on the open market. A too-low bid, however, risks getting nothing. Many evidently thought of bidding but did not -- in large part because of the misperception that one could participate only if they bid within the range the company set as guidance." Keep in mind that Google is trying to score as much as $135 per share. * The New York Times: In Google's Auction, It's Not Easy To Tell A Bid From A Bet (Registration required)

That sounds like a lot of dough, but investors seem eager to knead. "Attorney Lawrence W. Plitch , meanwhile, said he just wanted to relive the glories of the late 1990s, when technology stocks shot through the roof and showered riches on anyone lucky enough to receive IPO shares and sell them before the market began to crash in early 2000," The Washington Post reported. "It starts with the fact that I love the search engine," Plitch told the paper. "And I'm a little nostalgic for the go-go 1990s. I'm hoping this market starts getting a little irrational exuberance in it. ... This thing has some sizzle, and it's fun to be a part of it."

TheStreet.com writes about the handicapping surrounding Google's ongoing auction. "The main question facing investors, assuming that the deal comes off as planned, is what price Google's IPO will fetch. The company sprung a surprise on its far-flung audience earlier this summer by saying it expected its shares to be worth between $108 and $135 apiece. In offering up that price range Google valued itself at some $36 billion, an eye-popping number no matter how strongly the company has performed. Of course, Google's long-awaited appearance comes just as stocks in general, and Internet stocks in particular, have fallen on hard times. After a solid first-half run-up, online giants like Yahoo! and eBay have come under pressure in recent weeks as investors reconsider the present value of a bet on these companies' golden future. Meanwhile, the broader market has been hit hard in August by the high price of energy and uncertainty on other fronts." But the New York Post bet that Google will score high in the markets. "Amid all the grumbling about its initial stock offering, there's a good chance that Google will get its asking price -- but just barely. Google, which began accepting bids for shares on Friday, expects to sell 25.7 million shares at an estimated price of $108 to $135. Despite the eye-popping price and the terrible IPO market, several analysts predict the company will meet its target," the paper said. * The Washington Post: Because Of, Or Despite, News, Bids Placed In IPO (Registration required) * The Street.com: Google Countdown Begins In Earnest * New York Post: Google Likely To Hit IPO Price Mark

Business Week Online's Timothy J. Mullaney is among those bidding for Google shares as part of a science project-like effort for the publication. While Mullaney says he loves Google's technology, he is not a fan of the company's co-founders. After an interview at Business Week a few years ago, he concluded "the founders may not have the maturity to run a major technology company. Brin's arrogance, in particular, was enough for me to wonder if it would create trouble for Google. He interrupted Page constantly. I've told people for years that I left that lunch thinking the two of them would kill each other. So much for that prediction. Brin doesn't seem to have learned much humility since. Here's the quote one money manager says Brin gave at a meeting with institutional investors a few weeks back. Asked about Google's strategy for growth, he said, 'If I tell you, you'll just ask again.'" * Business Week Online: My Google Grubstake

EBay: ISO Craigslist

The popular San Francisco-based online bulletin board Craigslist , a treasure trove of job postings, personal ads and other online information, can now call eBay a close friend. The online auction site bought a 25 percent stake in Craigslist . EBay spokesman Hani Durzy told the San Francisco Chronicle that the deal gives eBay "insight into the classified trading model" and said: "There are a lot of things about Craigslist that intrigue us. They have built a passionate, community-driven business."

The Wall Street Journal reported that the arrangement "follows a long courtship of Craigslist by some of the top Silicon Valley venture capitalists and Internet companies, including Yahoo Inc. and Google Inc., according to people familiar with the matter. EBay said its investment was part of a broader interest in the online classified-advertising market, a potential growth area for the company. ... While Craigslist is profitable, it has taken an unorthodox approach to doing business, charging only for those services its users deem "appropriate" -- a policy eBay has agreed not to meddle with, according to Mr. [Craig] Newmark , Craigslist's chairman." * San Francisco Chronicle: EBay Buys 25% Stake In Craigslist

* The Wall Street Journal: EBay Dips Into Web Classifieds By Purchasing 25% of Craigslist (Subscription required)

Newmark gave the Chronicle his 2 cents on the Internet's revival: "My take on the whole dot-com bubble was that a lot of people who wanted to make a lot of money got too excited and hyped up the commercial aspects of the Internet prematurely. I think the vision of the Internet as a democratizing medium -- as everyone's printing press -- is real. We got distracted from that by the mass hallucinations of the bubble." As for a Craigslist IPO, wait until hell freezes over. "It's just not on our radar at all. Even hearing the idea makes my brain hurt," he told the paper. * San Francisco Chronicle: On The Record: Craig Newmark

Some diehard Craigslist fans are not impressed by the eBay deal. From the San Jose Mercury News: "'This is a gigantic mistake,' Gary Allen wrote in a user forum that craigslist set up to discuss the deal. 'It's impressive that even to this day an average citizen can write to Craig and get a personal reply. Unfortunately, that same personal and human touch is sorely missed at eBay. This is a mistake. eBay bad and robotic, Craig's List human and good.'" * San Jose Mercury News: EBay Buys 25% Stake In Craigslist (Registration required)

Cyberspace: Terrorist Playground?

Terrorists are using the Internet to organize and to deploy attacks, a growing trend that doesn't necessarily take tech-savvy skills. That's one assessment from a chilling, front-page account of Al Qaeda 's online forays, published by the Los Angeles Times yesterday. One example of low-tech online organizing? Al Qaeda and other groups send messages and information by distributing logins and passwords to the same e-mail account on Hotmail , Yahoo or other services. A message is deposited in the draft folder for people to read and then deleted -- leaving no trail of a message sent through the ISPs servers, the paper explained. More from the article: "Since Osama bin Laden and his followers were driven from their bases in Afghanistan, the Al Qaeda terrorist network has demonstrated an increasing ability to exploit the Internet as it reconfigures itself as a semi-leaderless global extremist movement far more elusive than the original incarnation. Websites run by Al Qaeda and its backers have become virtual classrooms for terrorists, offering instructions for activities such as kidnapping and using cellphones to set off bombs, like the ones used in Madrid. Independent Al Qaeda cells and the network's loose hierarchy use easily available encoding programs and simple techniques to exchange virtually undetectable messages between Internet cafes in Karachi and libraries in London." * Los Angeles Times: Cyberspace Gives Al Qaeda Refuge (Registration required)

Charting a Storm

Technology has helped weather buffs and worried Florida residents alike track the path of Hurricane Charley and the storm's aftermath. News.com on Friday provided a round-up of storm-related sites, including the Federal Emergency Management Agency site and the National Oceanic & Atmospheric Administration's National Hurricane Center . * CNET's News.com: Hurricane Charley Blows Through Web

Blogs have spouted online dedicated to weather. The Washington Post yesterday profiled Internet weather buff and blogger Jason Samenow . With Hurricane Charley, the "nation's weather bloggers -- Samenow was one of the first -- are losing sleep, checking charts, feasting on National Weather Service updates. Hunker down, the weathermen say. Unless, of course, you run a weather blog, in which case the thrill is just beginning," the paper said. WeatherBug has links to hurricane and weather blogs, including this one , which posts pictures and a play-by-play of watching the storm's action. Check out washingtonpost.com's hurricane coverage for a gallery of pictures from the storm. * The Washington Post: Forecast: Plenty of Activity On the Weather Blog Front

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