Googlopoly

Google is selling shares to raise about $4 billion. What could they be buying?

: LATER: See this tidbit from the later Wall Street Journal story:

While Google’s plans for the cash remain a mystery, the company left a clue that suggests the size of the offering wasn’t arbitrary. The number of shares Google plans to sell is 14,159,265. Those are the first eight digits that follow the decimal in the value of pi (3.14159265), which is an infinite number that represents the ratio of the circumference of a circle to its diameter. It’s a figure that Google’s cofounders, Larry Page and Sergey Brin, who were both raised by math teachers and studied computer science, no doubt are familiar with. Asked about the figure, a company spokesman simply replied, “the document speaks for itself.”

Am I the only one who finds that too-cute-by-half? If this bubble ever bursts and little old ladies are left penniless, this is the kind of arrogant business-as-playground that doesn’t sound so darling on the other side of the curve. In itself, it’s no big deal, of course, just an inside joke. But it’s another of many signs of Google’ arrogance.

  • http://www.thisisberry.com Jaap Stronks

    Wasn’t the latest buzz about Google buying lots of equipment (I don’t know what kind, to be frank), with which they might get an, er, US-covering WiFi-network up an running, to cut out the middle man (internet service/access providers)? If they are, they might be buying a massive amount of satellite dishes and antennas and such – or a massive amount of companies that produce such things, of course.
    Ah well, it’s about time anyway. My (Dutch) university will be starting the build of a WiFi-network on campus per september – finally, i can put my iBook into good use.

  • http://carpundit.typepad.com carpundit

    They could be buying a salve for the burns left by their decision to go public at an auction-priced 85, leaving billions on the table.

  • Ed Rusch

    The WiFi thingie was purely an invention of a stupid blogger playing “what-if” games. The only buzz came from ill-informed bloggers.

  • http://www.micropersuasion.com Steve Rubel
  • http://AsbestosDen.org Shawn Levasseur

    What are they buying? Golden Parachutes, Maybe?

  • http://www.tonypierce.com/blog/bloggy.htm tony

    maybe they want to be the official sponsors of next month’s quagmire in iraq

  • MisterPundit

    Google’s ever-increasing appetite for world domination (I know, easy on the hyperbole, but still) worries me.

    On the topis of Google, this is interesting :

    http://www.wired.com/news/culture/0,1284,68559,00.html

    I did some consulting work for a customer recently which included amongst other things, advertising through Google. Boy, what a rip-off.

  • http://txfx.net/ Mark J

    Technorati. And enough servers to make it run quickly, all the time. $4 billion sounds about right for that. (I kid, Kevin, I kid).

  • HT

    They’ve probably decided to add an in-house valet and dry cleaning service to their fancy company chef, and need to buy some adjacent land to build their new employee’s mountain retreat, complete with ski chalet, for their planning meetings. Or they really are serious about World Domination, and are buying a hollowed-out volcano, monocles, and Persian cats for all employees.

    Either way, another fourteen million shares on the market won’t do their EPS estimates or their current shareholders (most of whom bought in at $297 thinking it was going to $400) any good.

  • http://www.projectnothing.com Nathan Lanier

    They just bought Android today.

  • Jonathan Turner

    Woah woah… arrogance?

    Business *is* a joke… just like monarchies and governments. They aren’t a joke when they have the gun, but the birds still chirp just fine without them.

    Jonathan

  • http://www.triplemint.com KB

    They are buying fiber. They are going to buy all the best fiber that has sat dark since the end of the bubble in 2000. They will then launch a low-cost nationwide internet service provider that will give them full local access to users, and allow their products (search, keyword ads, etc) to fully replace newspaper and yellowpages advertising.

  • http://www.jasontconnell.com Jason

    They probably decided to sell exactly that many shortly after deciding to sell *around* that many. Adding more significance to significance. Instead of going from not selling any to selling 14,159,265. For a joke? It’s cute, but it shouldn’t anger anyone.

  • Ed Rusch

    And perhaps not so coincidentally, insiders have sold 14.2 million of Google stock in the last quarter.

    When the business of the company turns into selling stock in the company (when’s the last time Google had a profitable product move out of beta?), you should be selling. This is starting to sound a lot like the Ciscos and Junipers and other darlings of the dot-com era who were interested more in stock splits and market manipulation than actually creating sellabe product. Watch out on this one, friends.

    By the way, KB, there’s not that much fiber sitting around. In case you didn’t notice, the broadband industry has been expanding quite steadily in the last three years. Don’t pass along these unsubstantiated rumors.

  • http://blogebrity.com/blog Nick Douglas

    What WSJ reader needs pi to be explained? “I don’t know no fancy numbers, I’m just a securities market analyst.”

  • http://www.feedwriter.com GregB

    heh – first time I’ve seen Om called a “stupid blogger”. The theory makes sense, but we’ll have to wait and see if it’s true.

  • Matt Bruce

    What kind of idiot tells little old ladies to buy Google in the first place? “Little old ladies” are going to die too soon to have any business with high-risk, high-reward stocks to begin with.

    Their money should be in mutual funds or something. If you’ve got a problem with Google (and numerous posts give the strong impression that Jeff does), don’t buy it, or better yet short it.

    [Full disclosure: Google shareholder since one day after IPO, with close friends who work there albeit low on the totem pole.]

  • tony

    Arrogant? Relax. The finance people probably said they should offer around 14.1 million shares, so they decided to fine a cute number.

  • http://marginalizingmorons.blogspot.com/ CaptiousNut

    Google may have a near monopoly on search, but by no means have they cornered the market on arrogance. Management arrogance or stupidity is a risk in every company.

    Enough with the “little old ladies” losing money. If I hear one more person use their January 2000 brokerage statement to compute how much money they “lost” I am going to throw up.

    The fact is, most people haven’t a clue about the stock market or any of the realities and risks of investing. So they effectively outsource this task to mutual funds, products of which they are equally ignorant. Fund managers don’t scrutinze corporate management because their lazy ignorant customers don’t demand it of them.

    The only reason I care about this is because whenever the economy or market declines, these ignoramuses want to prosecute, regulate, and tax the economic engines of this country. (e.g. Sarbanes Oxley)

    If “little old ladies” don’t understand the stock market, they shouldn’t have their money there – and that goes for any other demographic. What are people now ENTITLED to worryfree no-homework investment returns?

  • Ed Rusch

    In this case Om was a stupid blogger: he threw out something hoping it would stick to the wall.

    The theory that makes more sense is the reality: Google is investing in short-term securities and then moving fast if a good Asian deal comes by. The Alibaba deal for Yahoo really shook things up for Google.

    Why not just accept what Google officials say they are going to do instead of believing some half-baked musings by a stupid blogger? I understand the need to create your own little reality, but c’mon, blogging fools: get real! Launch a nationwide Wifi network and give it away? Moohahaha! You geniuses do know there’s more cost to networking than just buying fiber, right? Do you know what it would cost to do this? More than the $14.2 billion Google is raising.

  • http://www.gopinion.com/ Tory

    But it’s another of many signs of Google’ arrogance.

    I couldn’t agree more.

  • brett

    I don’t see how it’s arrogance.. Too cute maybe, but how is that arrogant? It’s just a joke.

  • http://thinklocal.blogspot.com/2005/08/googlenet-echoes-of-orwell.html Mike Hogan

    GoogleNet would have some benefits for sure, but it also presents some very Orwellian issues, see here for more detail: http://thinklocal.blogspot.com/2005/08/googlenet-echoes-of-orwell.html

  • http://www.projo.com/shenews/ Sheila

    On behalf of little old ladies everywhere, I’d like to point out that a stock that has tripled in a year offers a lot more opportunity to stave off a cat-food diet than a bank CD at

  • Ed Rusch

    triple in the last year, down more than 10 percent in the last three weeks.

  • http://www.projo.com/shenews/ Sheila

    (so much for trying to use a “less than” sign in a post — the software thought I was opening a tag) … offers a lot more opportunity to stave off a cat-food diet than a bank CD at less than 3 percent, or mutual funds that go up and down in a narrow range for years. Taking a flyer on hope beats slow and steady sinking when their property taxes and heating costs are soaring.

  • Alastair

    Class.

  • Abe Fadley

    Google management are not dummies. They things under their sleeves which will MSFT to shame. Every one will be surprised and short sellers will bite their tongues until it bleeds. Why talk about your plans which will destroy most of internet companies. Keep it secrect good stuff.