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Ayers, former chef to The Grateful Dead, a 1960s rock band, encourages staff to take food home or bring their families in. The perk is one of many that staff receive at the world’s most-watched internet company. Staff get around campus on $4,000 Segway scooters, relax by racing remote-controlled blimps around the office and playing roller hockey in the car park. Even the toilets are designed to pamper Googlers, as they like to be known, with controls to set the seat temperature and water pressure.
For some, the biggest perk of all is just around the corner.
Last week, after months of speculation, Google announced it was going public. In the process, it opened its books for the first time, revealing an astonishing cash-generating machine that is set to make multi-billionaires of its founders, Larry Page and Sergey Brin.
Google started in 1998 when Page, now 31, and Brin, 30, were graduate students at Stanford University. Originally called Backrub, the search engine was financed on their credit cards but failed to attract much attention. Today, its name has become synonymous with searching the web, and is used by more than 100m people each month. Google processes more than 3,000 searches every second of the day.
Ironically, for a company that trades in free access to information, until last week few outside the company had any clear idea of how much money Google was making from its business.
Now we know. And the figures, for any company, let alone a six-year-old, are amazing.
Google has been profitable since 2001. Last year it generated net income of $106m on revenue of $962m. Nearly all of that revenue — 96% in the first quarter of this year — comes from ads placed on Google’s website and the sites of its partners. Each time a search is performed on Google, advertisements pop up alongside the results. Those ads are Google’s gold, it’s as simple as that. The company’s profits margins are 59% before tax.
This year Google’s revenues are expected to top $1.5 billion. Bankers and analysts estimated that Google could be valued at between $20 billion to $30 billion. Brin and Page own 30% of the company between them. At $4 billion a piece, each will have a fortune twice as big as Donald Trump’s.
The Google founders have never been afraid to buck the system. This time is no different. Google’s initial public offering (IPO) will be the most spectacular stock offer since the height of the dotcom bubble. Having watched many of their friends and rivals cash in, only to see their companies and paper fortunes go down in flames, Google is doing things differently. Last year the world’s hottest internet company banned investment bankers from its premises. And last week it announced plans to put its shares up for auction, a process that will rob Wall Street of its usual fat fees.
But no matter how it bucks the trend on its way to market, life is about to change at the GooglePlex.
LARRY PAGE set out his stall last week in a letter to would-be shareholders headlined: “An ‘Owners’ Manual’ for Google Shareholders”. With subheadings that included “Don’t be Evil” and “Making the World a Better Place”, Page’s informal and cocksure rant is pure Google. It begins: “Google is not a conventional company. We do not intend to become one. Throughout Google’s evolution as a privately held company, we have managed Google differently.”
The first big difference is that Google intends to sell an estimated $2.7 billion of shares through an auction method never used for such a large float. British investors may be disappointed. The regulatory filing states: “Individual investors located outside the US should not expect to be eligible to participate in this offering.”
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