GOOGLE outlined plans to top up its cash pile by issuing up to $2.1 billion (£1.2 billion) of new shares yesterday.

The American internet search giant said this was in anticipation of a rise in demand for its stock, after the company’s inclusion in the S&P 500 stock index.

The Californian group was promoted to the benchmark index last week, in a move that will force those investment funds that aim to replicate the index’s make-up to buy Google shares.

Google will formally join the index on Monday. Its $116 billion stock market capitalisation will make it one of the 20 largest companies in the S&P 500.

The company said that it would use the fresh funds as working capital and for capital spending. It said it might use the money for acquisitions. Analysts speculated that the money would be used to boost the company’s size in Asia.

At the end of the 2005 financial year the group had $8 billion in cash.

Google’s shares were trading down 1.66 per cent at $388.44 in morning trade yesterday, in reaction to the news.

The company said that it would sell up to 5.3 million Class A shares, increasing the number of these shares in issue to 212.4 million.

The increase in the company’s equity will have little impact on the influence of the group’s founders. Larry Page and Sergey Brin are the largest holders of the group’s Class B shares, which carry ten votes per share. Class A votes carry a single vote each.

Last August the company raised $4 billion by selling 14.2 million new shares at $285 each.

Google said then that the move was designed to boost its working capital and fund possible acquisitions.

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