Google is expected to price a $4 billion (£2.2bn) secondary stock offering tonight ahead of the shares being offered tomorrow on the Nasdaq stock exchange in New York, in what is expected to be the biggest offering of its kind for a decade.

On August 18, a day before its first anniversary as a public company, the internet search and advertising company surprised Wall Street by announcing plans to more than double its cashpile to $7 billion (£3.9 billion).

The internet search engine said that it would sell a further 14.2 million shares. That news sent Google’s shares down by more than 3 per cent in early trading on the day of the announcement.

However, in the past five trading sessions, Google stock has risen from about $285 a share to more than $310. Google listed on the Nasdaq market at $85 in an initial public offering that raised $1.67 billion.

In a filing with the US Securities and Exchange Commission, Google said that it would spend the cash raised by the latest offering 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.

Indeed, the past week has seen some potential acquisition "targets" taken out of any Google equation, with Skype, the free internet telephony company, bought by eBay for up to $4.1 billion, and Oracle buying Siebel Systems for $5.8 billion.

If Google's strategy is to fund more "organic" growth, then the company's recent move into voice communications through its Google Talk service, which allows users to make basic vioce calls for free over the internet, might offer some indication.

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.

Scott Kessler, internet analyst at Standard & Poor’s, told The Times: "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, Credit Suisse First Boston, Allen & Co, Citigroup Global Markets, JP Morgan Securities, Lehman Brothers, UBS Warburg LLC and Thomas Weisel Partners are among the underwriters of the Google offering. Reuters in New York reported analysts saying that the shares would be priced after the close of business on Wall Street.

Goldman Sachs and WR Hambrecht, which participated in Google’s IPO, are absent from the secondary offering’s banking team.

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