GOOGLE surprised Wall Street with plans to more than double its cashpile to $7 billion (£3.9 billion), a day before its first anniversary as a public company.

The internet search engine said that it would unleash 14.2 million shares, worth $4.2 billion at yesterday’s price, on to the market. The news sent Google’s shares down by more than 3 per cent in early trading.

In a filing with the US Securities and Exchange Commission, Google said that it would spend the cash on normal business expenses, capital expenditure and perhaps some “complementary” acquisitions.

But Google insiders have told analysts that they do not intend to buy a big company in the near future and will rely on buying up ideas and small software engineering outfits to expand their business.

Google’s capital expenditure rose from $319 million to more than $700 million this year, according to analysts, who also expect it to more than double again in the next year as the company buys resources to accommodate its rapid expansion.

But the company already has $2.9 billion of cash and no debt, which is more than ample to cover its expenses.

Google listed on the Nasdaq market a year ago, raising $1.67 billion with a share price of $85. Since then the stock has soared past $300, settling down to $278.75, down more than 2 per cent, by lunchtime yesterday.

Scott Kessler, internet analyst at Standard & Poor’s said: “What are they going to spend the money on? That is the $4.2 billion question. They have to buy something. With $7 billion on the books I would characterise them as over-capitalised.”

Google founders Larry Page and Sergey Brin are not expected to sell any of their personal holdings, which are worth more than $12 billion each. Morgan Stanley, CSFB and Allen and Co will underwrite the offering.