Google Inc.'s initial public offering of stock remained on hold yesterday after the Securities and Exchange Commission delayed final approval of the company's prospectus.
The delay did not appear to involve any major new issues, and the company continued to maintain yesterday that its IPO is on track to be priced and begin trading under the ticker symbol "GOOG" this week. SEC and Google officials declined to discuss possible reasons for the delay, which could include an ongoing analysis by Google and its financial advisers about what initial price to set for shares and how to allocate them.
"As of close of business today, the registration statement had not been declared effective," said SEC spokesman John D. Heine, who would not elaborate.
Under the auction system being employed by the company to distribute its shares, Google, the top Internet search engine, has said it will notify bidders once the SEC approves the IPO. Until that time, bidders have the right to withdraw, submit or change their bids for shares.
Google had asked the SEC to give final blessing to its prospectus at 4 p.m. yesterday, which would have made it possible for the IPO to be priced immediately and for the stock to begin trading as soon as today. Under the guidelines established by Google for its electronic auction, the company reserved the right after receiving SEC approval to close the auction immediately or to leave it open.
Google, which is seeking to sell at least 25.7 million shares in the IPO, has suggested a price range of $108 to $135 per share, although investors have the right to bid any price. Google plans to assess the bids to pick a "clearing" price and then distribute shares to bidders who offered to pay that price or more. No one would pay more than the clearing price. All investors allocated shares will pay the same per-share price in the IPO. Google has said it also could increase the size of the offering by 3.9 million shares if there is sufficient demand, which would bring the total size of the deal to 29.6 million shares.
If the IPO is priced within the range suggested by Google, the company would have a total stock market value of about $30 billion. Founded in 1998, Google is the leader in answering queries for computer users about virtually any subject by directing them to relevant Web sites on the Internet.
Google competes directly with Yahoo Inc. and also faces the prospect of heightened competition from Microsoft Corp. The company makes nearly all of its profit from ads that appear alongside its search results.
While its growth rate has been slowing, Google remains profitable. The company reported a $143 million profit and $1.4 billion in sales in the six months ended June 30, compared with $58 million in profit and sales of about $560 million in the first half of last year. In the first half of 2004, nearly one-third of Google's revenue came from abroad.
Staff writer Carrie Johnson contributed to this report.