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Google Yields More Than Fistful of Dollars
Also from the Globe: "Those investors brave enough to take part in the IPO auction have been rewarded as well. Google's price rose steadily in the first day of trading on the Nasdaq to $100 a share. Given the comparatively low price at the IPO, future high-flying companies may be reluctant to replicate this auction. But it did provide a fair price without favoritism. The Google offering showed off the stock market at its imperfect best."
• The Boston Globe: Good For Google
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Jerry Knight, The Washington Post's Wall Street columnist, wrote that Google is not the only company to go Dutch. "Google will be remembered as the IPO that broke Wall Street's investment banking monopoly. But if Dutch auction offerings are to change the way that new businesses raise capital, it will be because of lots of little companies like New River Pharmaceuticals," Knight wrote. He explained that like Google, New River, another auction-style IPOer, learned it's not easy "to mount a revolution against Wall Street royalty and the oligarchy of investment firms that skim the cream off most IPOs. Neither Google nor New River Pharmaceuticals raised as much money as they wanted in their IPOs and neither was able to completely wrest control of the IPO process from the Wall Street bankers and institutional investors who pull the strings in the new-issues market. But they did pull off their offerings at a time when tech stocks were tanking and other companies were canceling plans to go public. And in doing so they demonstrated that the IPO process can be changed in ways that ultimately benefit small investors and companies that need to raise capital."
• The Washington Post: Google Not The First To Go Dutch (Registration required)
Google's IPO may inspire other companies to embrace the auction-style IPO, the New York Post reported. "There will be fee cutting, and I think that there will be other Dutch auctions," former Securities and Exchange Commission Chairman Arthur Levitt told the paper. "Google was a successful transaction, even with all of its problems."
• New York Post: Google May Spark IPOs To Go Dutch
No Exit
The giants of the search engine world, namely Google and Yahoo are narrowing your vision of the world even as their databases grow, Matthew Hindman and Kenneth Neil Cukier, fellows at the National Center for Digital Government at Harvard's Kennedy School, wrote in a New York Times op-ed. "Imagine if one company controlled the card catalog of every library in the world. The influence it would have over what people see, read and discuss would be enormous. Now consider online search engines. Few people realize that 95 percent of all Web searches in the United States are handled by two companies, Google and Yahoo, either directly or through other sites that use their technology. In the case of Google, whose shares started to trade publicly last week, the company holds the world's largest index of Web content, at more than four billion pages, and handles more than 200 million searches a day. The influence of search companies in determining what users worldwide can see and do online is breathtaking. As disquieting as this power may be, it masks a deeper problem. While search engines are indispensable for finding information online, the technology on which they are based serves to narrow the field of sites that people see. In this respect, Google's technology reinforces a worrisome feature of the Web: the trend toward consolidation that affects everything from politics to news to commerce."
• The New York Times: More Is Not Necessarily Better (Registration required)
In other not-so-rosy Google news, the company is getting some major darts for its corporate governance track record. Google has "the worst corporate governance of any company in the S&P 500 index, according to an influential proxy adviser. Institutional Shareholder Services, which advises investment institutions on how to exercise their votes, identified 21 weaknesses in Google's governance practices. The flaws include having too few outside directors and a capital structure that gives effective control to insiders," the Financial Times reported. Ouch. No friends-and-family shares doled out to ISS, apparently.
• Financial Times: Google Search Finds Concern With Structure
Haven't We Played This Game Before?
The New York Times is the latest publication to figure out that the video game industry resembles Tinseltown more each day. In a piece yesterday, the Times noted that video gaming companies are taking cues from Hollywood. "The results have been movie-based games, Hollywood-quality special effects, professionally composed soundtracks, celebrity voices – and even Hollywood-style economic problems, including ballooning budgets and a greater reliance on monster hits," the paper said.
• The New York Times: Video Game Makers Go Hollywood. Uh-Oh (Registration required)
Meanwhile, the New York Times's Sunday magazine has a lengthy piece about the marriage of video game technology and military training, including the Army's "Full Spectrum Warrior" game. An excerpt: "The Army is already preparing plans to ship out copies of Full Spectrum Warrior to soldiers, and its creators envision the game being played by troops in Iraq, where Xboxes are popular among Americans looking to unwind. Many of the military's young soldiers, members of the PlayStation generation, spend much of their downtime each week playing games. As the military sees it, they might as well be playing games that hone their skills."
• The New York Times magazine: The Making of an X-Box Warrior (Registration required)
The Battle for Midway
In other gaming news, Viacom is considering sharpening its gaming chops. "Viacom Inc.'s board has formed an independent committee to evaluate possible acquisitions or other deals with videogame companies, including Midway Games Inc., a company controlled by Viacom Chairman Sumner Redstone," the Wall Street Journal reported. More from the article: "In an interview earlier this year, Mr. Redstone said he started buying heavily in Midway after realizing that videogame sales have surpassed movie box-office revenue. Mr. Redstone has also acknowledged that Viacom was interested in the sector but he has noted that many of the videogame companies are too expensive to buy."
• The Wall Street Journal: Viacom Views Midway Games As a Possible Acquisition Target (Subscription required)
And a gaming end note: Microsoft is doling out pink slips to some Xbox workers. "Microsoft's Xbox video game business will lay off 76 workers and stop making some sports games, the company said. Microsoft said it will stop producing team sports games such as NFL Fever, NHL Rivals and baseball game Inside Drive. But the company said other sports-themed games such as the golf title Links and the snowboard game Amped won't be affected," the Associated Press reported.
• The Associated Press via USA Today: Xbox To Stop Making Some Sports Games
Microsoft Seizes Its Oppor-tune-ity
Speaking of Microsoft, the company is slated to make a play for the online music space this week, attempting to put a dent in Apple's iTunes business and compete with other players, including Real and Wal-Mart's online pay-for-play service. "Microsoft plans to quietly launch the MSN online music store with the new version of its Windows Media 10 player," the San Jose Mercury News reported today. "Early-release versions of the player look like knock-offs of Apple's iTunes Music Store, complete with brushed nickel finish. But hey, why mess with success? A button in the upper right corner of the player will take consumers to the download store. Microsoft has told entertainment executives that it expects to introduce as many as 130 million people to its music download store as computer users are prompted to update their media player software. And that's not counting the 300 million people who drop by the MSN site. The software giant also touts the music store's compatibility with nearly 60 digital music players. Not included in the list is Apple's popular iPod."
• San Jose Mercury News: Microsoft To Join Battle of the Beats With Music Store (Registration required)
And lest we forget that the mega-company from Redmond, Wash. is still fighting an antitrust battle across the pond. The Wall Street Journal on Friday took a look at the European Union's incoming antitrust chief, whom Microsoft just might like. The official "said Friday she thought Microsoft Corp. Chairman Bill Gates was doing a 'good job' when she awarded him an honorary degree eight years ago as head of a Dutch business school. Neelie Kroes also said she would work to bridge the gaps between U.S. and European antitrust enforcement," the paper said. "Kroes said she wouldn't have awarded such a degree if she didn't think Gates was doing a good job at the time. But she added she would now have to look at the case differently as the new EU antitrust chief."
• The Wall Street Journal: Incoming EU Antitrust Chief Sticks by Praise for Bill Gates (Subscription required)