Google is about to step up to the plate according to Bloomberg (the site, not the Mayor). Here are the three import facts:
1. Google probably had revenue of about $1 billion in 2003 and net income of about $200 million that will increase to about $1.5 billion of sales and net income of $300 million in this year, according to Eric Martinuzzi, an analyst at Craig-Hallum Capital Group in Minneapolis.
2. Google Inc. hired Morgan Stanley and Goldman Sachs Group Inc. to arrange its initial public offering, a sale that may raise as much as $4 billion, a banker involved in the transaction said.
3. About a third of Mountain View, California-based Google may be sold in the IPO, giving the company a market value of about $12 billion, the bankers said.
Which leads me to ask the following questions/points:
1. What the hell is Google going to do with four *billion* dollars in cash? Actually, make that $4.3 billion in cash if they make a profit of $300 million this year. Perhaps they should spend $2.7 billion buying jetBlue (the other company that tries not to be evilexcept when they give the Army your travel records).
2. If they have a $12 billion dollar valuation that is a 40×2004’s projected earnings and about 120x this year’s earning of $100 million (the $100 million this year has not been confirmed by Google, but that number is out there). That is pretty darn rich. Then again, Yahoo trades at 140x revenues.
3. Yahoo is making $350 million a quarter right now, or about a $1.4 billion run rate with $65 million in profits a quarter (run rate of $260 a year). Wait a second, aren’t those almost exactly the same numbers given by the executive in the Bloomberg story. Is it impossible that Google and Yahoo are making close to the exact same amount of money?