I am lost and need help on how to organize and research the solution to the following:

Topic: Financing Issues that Google faced when it went public. Give an example of when Google had an initial public offering in the past three years which address the following:

- Source and application of funds.

Please cite sources.

Overview of IPO

IPO is an Initial Public offer to an investor, which mean it is the first issue of equities by the company to the general public at large. Among the most popular reasons a company might choose to go public are to: raise capital to expand its business, finance acquisitions, pay debt and have greater and easier access to capital in the future. Thus financing issue is how much to raise the funds from the equity offer. What should be the optimal capital structure in order to minimize the cost of capital.

Public companies have thousands of shareholders and are subject to strict rules and regulations. They must have a board of directors and they must report financial information every quarter. In the United States, public companies report to the SEC.

Registration -Issues
Company can become "public" in one of two ways - by issuing securities in an offering registered under the Securities Act or by registering the company's outstanding securities under Exchange Act requirements. Both types of registration trigger ongoing reporting obligations for your company.

Disclosure
If you decide on a registered public offering, the Securities Act requires your company to file a registration statement with the SEC before the company can offer its securities for sale. It has got two parts:

• Additional information

• Reporting and Fiduciary Responsibilities
Public companies must continuously file reports with the SEC and the exchange they list on. They must comply with certain state securities laws , NASD and exchange guidelines.
If your company registers a class of securities under the Exchange Act, it must file the same annual, periodic, and current reports that are required as a result of Securities Act registration

Compliance Issues

Record Keeping
Companies need to require audited financial statements for the last three years before they can go public. These need to be provided separately for each significant (>20%) unconsolidated subsidiary.

Case of Google

Google is one of the most successful new dot com companies presently. Their success is based on innovation, rapid growth, and an obsession to be the best search engine in the Wide World Web. Listed hereunder are excerpts from their main page website (http://www.google.com/corporate/index.html) which describes its vision, mission, and values.

Organization Background
Google is one of the biggest Internet Company. According to Saul Hansell, of the New York Times; Google is "... one of the biggest advertising vehicles the world has ever seen. Google is a public and profitable company focused on search services. Named for the mathematical term "googol," Google operates web sites at many international domains, with the most trafficked being www.google.com. Google is widely recognized as the "world's best search engine" because it is fast, accurate and easy to use. The company also serves corporate clients, including advertisers, content publishers and site managers with cost-effective advertising and a wide range of revenue generating search services. Google's breakthrough technology and continued innovation serve the company's mission of "organizing the world's information and making it universally accessible and useful."
Vision
Google's vision is: "The perfect search engine would understand exactly what you mean and give back exactly what you want." This unique vision differentiate and separates Google from its competitors since it is the conceptual reference to its values which allows users to experience in a single search four elements that separate Google from its competition: speed, accuracy, objectivity and ease of use. In contrast, Google's competitors pay high premiums to receive a higher ranking in search results which subtracts integrity and objectivity to the search engine main function or use.

Values
Google's values consist of ten simple, logical, and sound theoretical constructs which are the references for tactical plans at the operational level which are listed hereunder:
1. Focus on the user and all else will follow.

2. It is best to do one thing really, really well.
3. Fast is better than slow.
4. Democracy on the web works.
5. You don't need to be at your desk to need an answer.
6. You can make money without doing evil.
7. There's always more information out there.
8. The need for information crosses all borders.
9. You can be serious without a suit.
10. Great just isn't good enough.
(Reference Google corporate website)
Thus Google needed to go public because it needed lot of cash in future to fund its growth plans. Now the IPO is the right means to fund its long-term capital requirement and it will also increase the liquidity in the stock. The Google Initial Public Offering came out on August 13th, 2004.

For more details visit:
http://www.ipogoogle.org/

Google is focussing on as a leader in the search engine besides other services as they are a service that is constantly in demand and used on a daily basis throughout the world. They cover topics and information as informal as entertainment and as important as corporate intelligence and other information sciences. Of the search engines that are on the market, there are ten that are most frequently viewed (Hoover's, 2006). Of these ten corporations, the one with the most prosperous performance and outlook since its initial IPO is Google.

The Company Analysis

There may be situations were the industry is very attractive but a few companies within it might not be doing all that well; similarly there may be one or two companies which may be doing exceedingly well while the rest of the companies in the industry might be in doldrums. You as an investor will have to consider both the financial and non-financial aspects so as to form a qualitative impression about a company. Some of the factors are

• History of the company and line of business
• Product portfolio's strength
• Market Share
• Top Management
• Intrinsic Values like Patents and trademarks held
• Foreign Collaboration, its need and availability for future
• Quality of competition in the market, present and future
• Future business plans and projects
• EPS, its growth and rating vis-à -vis other companies in the industry.
• P/E ratio
• Growth in sales, dividend and bottom line
(www.icicidirect.com)

Google's performance
Google sells Class A common stock on The NASDAQ National Market under the symbol GOOG. Their Class B stock is not publicly traded. For the years 2002, 2003 and 2004, Google has consistently shown remarkable growth and stamina. Revenues went from $439,508,000 in 2002, to $1,465,934,000 in 2003, to $3,189,223,000 in 2004 (revenues for the first three-quarters of 2005 have already reached $4,219,467,000) (Google, 2006).
Google makes revenues from the sale of advertising, which they place adjacent to their search results or on network sites of publishers associated with their AdSense program. Moreovoer Google's innovations don't stop at the desktop. To bring its accurate and speedy search results to users accessing the web through portable devices, Google also pioneered the first wireless search technology for on-the-fly translation of HTML to formats optimized for WAP, i-mode, J-SKY, and EZWeb.
Thus it is using the funds to expand and to invest in new technologies to improve its market share and profitability.

Thus Management has demonstrated impressive track record. In case of Google the management capability and future seems good. Therefore one can buy through IPOS because it is investing in future. Moreover it can give desirable return and be an market out performer.

Reference:
Google Inc. (January, 2006) Investor Relations; Google Inc. Retrieved on January 15, 2006 from http://investor.google.com/fin_data.html
Hoovers (January, 2006) Internet Search & Navigation Services; HooversTM a D&B company. Retrieved on January 15, 2006 from http://premium.hoovers.com/subscribe/ind/factsheet.xhtml?HICID=1458
Hansell, Saul (October 30, 2005) Google Wants to Dominate Madison Avenue, Too. Business; the New York Times. Retrieved on January 16, 2006 from http://www.nytimes.com/2005/10/30/business/yourmoney/30google.html?ex=1288324800&en=b0684c6ec54b2467&ei=5090&partner=rssuserland&emc=rss&pagewanted=all
Financial Management by I.M. Pandey

Editors of IPOGoogle.com. (2004). Initial public offering by Google, Inc. the Google IPO, general Google information and related Google discussions. Retrieved June 10, 2006 from the IPOGoogle.com Website: http://www.ipogoogle.org

REFERNCES:
1.Website of SEC
2. en.Wikipedia.org
3. fidelity.com.