Feeds

SEC rules drag reluctant Google to market

'And these little piggies forgot about their disclosure requirements'

  • alert
  • submit to reddit

Top 5 reasons to deploy VMware with Tegile

In an irony that won't escape long-time Google watchers, an overlooked regulation will oblige the company to disclose more information than it wanted to. Google has long fought shy of an IPO offering, as remaining private allows the company to "avoid public scrutiny", in the words of co-founder Sergey Brin. Comparably sized companies have happily stayed private and out of the limelight, such as one of the world's largest, the SAS Institute, which turns over a $1 billion revenue a year.

However, section 12(g) of the 1934 Securities and Exchange Act, brought about to temper the excesses of 1920s speculation mania by introducing greater transparency, obliges even private companies of a certain size - 500 shareholders and $10 million in revenue - to make more comprehensive disclosures.

"The filing with the Securities and Exchange Commission, would reveal so much about the secretive firm that many experts believe Google might take the next logical step and file for an initial stock offering," the San Jose Mercury suggested this week, and wire services reaffirm that this requirement has tipped Google inexorably towards IPO.

Although press comment has focused on the similarities between the Google IPO mania and the excitement that followed Netscape's flotation in 1995 - indeed, there are many here who hope it results in the same speculative bubble - the parallels aren't exact. When Jim Clark took Netscape public, he was making a gamble. Netscape was a few months old, had little discernable income, little of what marketers call "brand equity", and certainly no secret sauce. By floating the company, Clark was propelling it into the big league. It was a sleight of hand, that could only last until the money ran out, or Microsoft woke up. Google doesn't have a secret sauce either (as Daniel Brandt notes in his acidic, but accurate, summary here). On the other hand it is a world-known name, and more importantly, a profitable business as an advertising broker.

Brin is correct: Google simply doesn't need to float. His official explanation is that a public Google would be distracted by the quarterly reporting requirements, and so we must take him at his word. But Google sounds pretty distracted already: it neglected to do due diligence on its new Gmail service (a small British company owns the trademark in 80 countries and there are already two Gmails out there) and Bill Joy turned down a company in such chaos that "no one can figure out who's in charge or even what Google's licensing policy is," Forbes reported last year.

However the manner of its path to IPO will set the mood music for the company's foreseeable future. Even if it does its job well, it isn't likely to escape the attention of regulators. In fact, the better it does, the more attention it will attract. This week saw the first introduction of a bill to require Google to provide an opt-out for users of its Gmail service. Hard-headed regulators simply don't go gaga at the sight of men and machines as starry-eyed techno-utopians. Marc Andressen said some pretty reckless things a decade ago, but he never dreamed of planting his company's chip in your head. ®

Related stories

Bill Joy spurned job at out of control Google
Google values its own privacy. How does it value yours?
State senator drafts Google opt-out Bill
Google founder dreams of Google implant in your brain
Feds slap cuffs on Google stock scammer
Google launches email, takes the Bill Gates defense
Why Microsoft could be Google's best bet
Google heals the sick
Google buys search engine PageRank RIP?

Beginner's guide to SSL certificates

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.