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Google IPO

Google History

kash cash

on 5 November 2012

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Transcript of Google IPO

Google's Path 1996 1990s Friends Larry Page and Sergey Brin begin work on the “Stanford Digital Library Project” which is meant to “develop the enabling technologies for a single, integrated and "universal" library...” 1997 1999 1998 Google.com is registered as a domain name. Google receives millions in equity funding. Andy Bechtolsheim is the first investor.
He decides to invest $100,000
“...to an entity that doesn‘t exist yet...” 2000-2004 2000 2001 2002 2003 2004 2005-2009 Google launches Adwords
which is Google’s ad service
that charges customers per ad click. Eric Schmidt initially gets hired as
the Charmian of the board and soon becomes the company
Chief Executive Officer. Google releases their first piece of hardware called Google Search of Appliance Google launches a
"...content-targeted advertising service..." Google goes public. 2005 2006 2007 2008 2009 2010-2012 Google releases numerous software programs throughout the year Google acquires YouTube Google announces the Android mobile platform Google announces
the G1 mobile phone
offered through T-Mobile Google Ventures is founded to
provide funding for
new technological companies 2010 2011 2012 Google goes further into the mobile market with the release of the Nexus One Google continues to further expansion into the mobile market along with further expansions to their advertising offerings. Stock prices continue to climb and reach their highest points in their history. Investors: Analyzing Google Answer: Google Products and Services Web Search
Images Search
Google Toolbar
Google Groups
Google AdWords
Google Partners Websites Investors:Will This Really Make Us Rich? It Depends ! Possible Risk Factors To Whom it may concern:
Our Search Results may not be Relevant
Number of Advertisers May Shrink
Our Profit Margins May Drop Over the Years
Microsoft and Yahoo May Take Away Market Share in Search Business
If We Don’t Remain Competitive Our Revenues May Suffer
Our Relations with Our Google Network Sites May Suffer
External & Other Factors May Effect our Companies Performance
Future Growth May Be Less than Anticipated
May Not Be Able to Meet Shareholder Expectations What did the Investors Think in 2004? Price to Earnings Ratio = Current MKT cap/EPS 2004: 128.93
2012: 22.77 Market Cap
2004: $40 Billion
2012: $250 Billion Higher the P/E Ratio; Higher the Expectations of Future Earnings Historical Google Prices 2004 Average Price : $151
2012 Average Price: $624 Were they Right? Question: How Does Google Make Money? 19,605,052 Raise $$$
Acquire more capital
Pay off debts
Exit Strategy
Financial Windfall Why Have an IPO? Expensive
Lack of Decision Power
Public Scrutiny
Risk of Failure Not All Fun and Games Media Attention
Public Recognition
Employee Pride
Business Opportunities Not All About the Money What is an IPO? Google IPO Vs. Facebook IPO Opening Day Numbers Comparing the Two Companies by the Number Pre-IPO Advertising Analysis Date of Stock Market Debut: Aug. 19, 2004
IPO Stock Price: $85
Opening: $100
Closing: $100.34
Market Valuation at Debut: $24.6 billion Google Date of Stock Market Debut: May 18, 2012
IPO Stock Price: $38
Opening: $42.05
Closing: $38.23
Market Valuation at Debut: $104 billion Facebook Google Facebook Multiplier

Raising US$2.7 billion US$5 billion 1.84 times

Revenue US$961,874 US$3,711,000 3.86 times

Net Income US$105,648 US$1,000,000 9.47 times Top Line Numbers Ad revenue

Advertising as % of all revenue

% change in ad revenue from previous year

% change in ad revenue from 2 years earlier

% revenue from US only in previous year

% revenue reliant on external parties Revenue Google Facebook US$913,780 US$3,154,000

95% 85%

+152% +69%

+359% +145%

74% 56%

21% 12% Google Facebook Multiplier
Cost of Revenue US$121,794 US$860,000 7.06 times

Sales and Marketing US$120,328 US$427,000 3.55times

Research and Development US$91,228 US$388,000 4.25 times

Total costs and expenses US$619,410 US$1,955,000 3.16 times Costs Advertising Reach Revenue/Growth Advertising Performance Ad Targeting Options Ad Formats Facebook World's largest social network comprising over 1.01 billion monthly active users

Reaches 51% of all internet users

1 trillion pageviews per month Google The world's largest display advertising network, comprised of google properties :

Reaches 90% of all internet users

180 million ad impressions served up each month Facebook Q1 2012 revenues, $1.06 billion

Q1 2012 vs Q4 2011, -6.5%

Q1 2012 vs Q4 2011, -32% Google Q1 2012 revenues, $2.9 billion

Q1 2012 vs Q4 2011, +1%

Q1 2012 vs Q4 2011, +0.7% Facebook Google Average click through rate for banner ads in the US:
.1% CTR in 2010, .051%
2009, .063%

Average CPC, $0.80 Average CTR, .4%

CPC, $0.75 Facebook
Education, Workplace & Likes Google
Topic & Interest Targeting
Keyword Contextual Targeting
Remarketing Location Targeting
Demographic Targeting Google
Text Ads
Image Ads
Ads in Videos
Ads in Mobile Web/Games Facebook

Sponsored Stories Ratio Analysis Profit margin
Current Year: 31%
Prior Year: 35.4%
Return on Assets (ROA)
Current Year: 18%
Prior Year: 21.1%
Return on Stockholder's Equity (ROE)
Current Year: 22.5%
Prior Year: 44.9%
Earnings Per Share
Current Year: 29.76
Prior Year: 26.31 Analysis of Liquidity Current (or Working Capital) Ratio
Current Year: 5.92
Previous Year: 4.16
Quick (or Acid-Test) Ratio
Current Year: 5.84
Previous Year: 4.08 Analysis of Solvency Debt to Total Assets
Current Year: .20
Previous: .20
Times Interest Earned Ratio
Current Year: 248.09
Previous Year: 2535.40
Current Year: 365.13
Previous Year: 0 Cash Dividends Per Share
Current Year: 0
Prior Year: 0
Dividend Payout Ratio
Current Year: 0
Prior Year: 0
P/E Ratio
Current Year: 21.70363
Prior Year: 22.57583 YES!

Roshan Patel GOING DUTCH Difference Market sets the share price Why Reduces Cost (No Banks)

Opportunity - Avg Investors

Minimize speculation What Success Known brand

Google - credibility w/ investors Traditional Coordinated by Invst. banks

Underwriters - IPO price, market IPO

Post-IPO price effect:
Bigger pop - underpriced pre-IPO Dutch Market determines price
Underwriters - eliminated
Lower cost
Post IPO :
Less Pop - better pre-IPO pricing Thank you Questions ??? Jenny Serrano Sergio Ruiz Vaidheeswarkasyap "El Capitan" Varadha Armand Casanare Dilbag Singh A first draft registration statement filed by a firm prior to proceeding with an initial public offering of securities. The document, filed with the Securities & Exchange Commission, is intended to provide pertinent information to prospective shareholders about the company's business description, management, strategic initiatives, financial statements and ownership structure.
Preliminary Prospectus
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