Internet search engine Google has chosen Morgan Stanley and Credit Suisse First Boston to lead its widely-anticipated Wall Street flotation, it was reported today.
The initial public offering (IPO) is expected to value the six-year-old firm at up to $25bn (£13.5bn), in a listing surrounded by the kind of excitement seen at the height of the internet boom.
Investment banks have been falling over themselves in order to win a share of the $100m in fees that Google's flotation is expected to generate. The Wall Street Journal reported that CSFB and Morgan Stanley will be the lead investment banks for Google's IPO.
Citigroup and Goldman Sachs, both of which were vying for the top spot, are still expected to play a large role, while JP Morgan Chase and Lehman Brothers will also be involved, the Journal said.
The brainchild of Sergey Brin and Larry Page, two Stanford University graduate students who together hold 30% or more of the company, Google revolutionised web searching in 1998, offering a simple and powerful way to find information based on the number of links to a page.
The two are believed to own at least one third of the company. Other investors include venture firms Kleiner Perkins Caulfield & Byers and Sequoia Capital. Yahoo, a Google rival, and Time Warner's America Online unit, also have stakes in Google, or warrants to acquire shares, obtained through partnerships in the firm.
Unlike many of the internet companies that floated during the technology boom of the late 1990s, Google makes a profit.
For years, it has been making money by licensing its search technology to other websites, and also rakes in revenue from targeted ads placed beside search results. Analysts estimate Google's annual profit to be between $150m and $350m on sales as high as $1bn.
By December last year, Google accounted for more than 50% of all internet searches, handling more than 200 million searches a day.
Evidence of the threat that Google now poses was provided when Yahoo recently stopped using it for searches. Yahoo is now using its own technology following the acquisition of Inktomi, Overture and Altavista.
Google turned up the heat further on Yahoo and Microsoft by announcing plans to launch a free email service. The service, called Gmail, will provide far greater capacity than the existing services from Yahoo and Microsoft's MSN Hotmail, as well as additional features.
However, both Yahoo and Microsoft are stepping up competition to Google, developing search technologies to lure away Google's users and advertisers.
Google is going public because federal rules require companies with more than 500 shareholders and $10m in assets to publicly disclose more information about their business. These regulations often push companies into going public.
The company, which has more than 1,000 employees, most of whom hold stock options, is expected to announce plans for its IPO this week.
