Google may have to delay IPO

Logistical issues over new auction format slowing things down

James Watson

Google may delay its initial public offering (IPO) by a week due to logistical issues related to the process of registering bidders for its 'Dutch auction'-style IPO.

Although an official date hadn't been set, the auction had been expected to launch this week.

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According to a source quoted in Information Week, part of the problem is that the company's auction format hasn't been tried before, which is slowing things down.

'It's all new,' the person said. 'We just hit a speed bump.'

The delay is the latest hiccup for one of the most high profile technology IPOs in recent years.

The company also faced scrutiny recently over share distributions made in the past that may have to be bought back because they were potentially awarded in violation of securities law.

From the time it decided to go public, Google has drawn attention by developing a new auction process, which is intended to democratise the process and open it up to a wider audience.

But since then, the company has been criticised for setting its offering price too high.

The two investment banks underwriting the deal, Morgan Stanley and Credit Suisse First Boston, will use the auction process to determine the highest price at which there is demand for all shares and then price the stock at or below that level.

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