Originally created 08/20/04

Google's insiders strike it rich with IPO



SAN FRANCISCO -- Lots of people are hoping to get rich off Google Inc.'s stock now that the online search engine's IPO is finally completed. Here's a look at some of the investors that have already locked in huge profits by selling a portion of their stakes:

- Yahoo Inc. The Internet giant played a pivotal role in popularizing Google by showcasing its rival's search technology on its popular Web site for more than three years. It's a decision Yahoo came to regret, but Google's IPO should help ease the pain. Yahoo sold off 1.61 million Google shares to raise $136,914,430 and still owns 6.59 million shares worth $559,990,710 based on the initial offering price.

- Larry Page and Sergey Brin. The two started working on what became Google in a dorm room at Stanford University less than a decade ago. Now they can afford roomier digs. Page collected $41,052,750 and Brin got $40,894,605 from the IPO. That's a pittance compared to their remaining stakes in the company. They are holding on to Google shares that are worth $3,239,416,725 for Page and $3,230,674,475 for Brin.

- Eric Schmidt. When Google hired the former Sun Microsystems and Novell executive as its CEO in July 2001, analysts reasoned Schmidt would help bring "adult supervision" to a free-spirited company. Child care never paid this well. Schmidt picked up $31,362,025 Wednesday and still owns a stake worth $1,223,118,975.

- America Online. Unlike Yahoo, the Internet service provider says it has no plans to drop Google as its Web search provider. Like Yahoo, AOL made a killing on the IPO - $63,218,325. AOL's remaining Google stake is worth $568,965,095.

- Andy Bechtolsheim and David Cheriton. After selling a Silicon Valley startup to Cisco Systems Inc. for about $250 million in 1996, these partners made another smart decision by investing more than $200,000 in Google just as Page and Brin were starting out. Bechtolsheim, a co-founder of Sun Microsystems, made $30,719,680 in the IPO and Cheriton, a Stanford University professor, made $28,937,060. They are holding on to big nest eggs: Bechtolsheim's remaining Google stake is worth $276,477,120 and Cheriton's is worth $260,433,540.

- Omid Kordestani. Google's senior vice president of worldwide sales knows what it's like to be at a young tech company with a hot stock. Before joining Google, he was an executive of Web browser pioneer Netscape Communications. Kordestani made $20,444,710 on the Google IPO and retains a stake worth $388,449,490.

- Stanford University. The college owns the rights to Google's vaunted search technology because Brin and Page developed it while working on a university-funded project. Google still pays Stanford a licensing fee for the technology and gave the university a small stake in the company. Stanford plucked $15,657,595 from the IPO and retains a stake worth $140,274,565.

- Angel Investors. Although it's not well-known, the fund adds even more glamour to the IPO. A list of celebrities including golfer Tiger Woods, basketball star Shaquille O'Neal, California Gov. Arnold Schwarzenegger and former Secretary of State Henry Kissinger all own a sliver of the Angel funds that acquired a small stake in Google during 1999. Angel Investors pocketed $7,061,205 in the IPO and is holding on to a $63,551,355 stake.

Most Google employees who own stock in the company didn't get to participate in the IPO, but some will have a chance to start cashing in next month. Google is allowing company insiders to sell up to another 4.58 million shares on the Nasdaq Stock Market in 15 days.

Chronology of events leading to Google's IPO

Since modest beginnings more than eight years ago, Google has grown to become the Internet's largest search engine, and a key provider of revenue-generating advertising services. Here is a look at key dates for the company:

1995 - Google founders Larry Page, 24, and Sergey Brin, 23, meet while touring Stanford University as graduate students.

1996 - Page and Brin create BackRub, a precursor to Google which analyzed links pointing to particular Web sites.

1998 - The pair try and fail to interest major Internet portals in their search technology.

Sept. 7, 1998 - Encouraged by Yahoo founder David Filo, the pair form Google Inc. in a friend's garage in Menlo Park, Calif. Google begins with an initial investment of $1 million and a "beta," or test, site already answering 10,000 search queries each day.

February 1999 - With eight employees and 500,000 search queries each day, Google outgrows the garage and moves into an office in Palo Alto, Calif.

June 7, 1999 - Google secures $25 million in venture capital from leading firms Sequoia Capital and Kleiner Perkins Caufield & Byers.

August 1999 - Quickly outgrowing its Palo Alto offices, Google moves into a new headquarters - the "Googleplex" - in Mountain View, Calif.

Sept. 21, 1999 - Google sheds the "beta" label from its site. With AOL/Netscape among the sites using Google as their Web search service, traffic grows beyond 3 million searches per day.

June 2000 - Google becomes the largest search engine with more than 1 billion pages in its index.

June 26, 2000 - Yahoo selects to Google to provide Web searches to its users. Yahoo users soon tap Google for 18 million search queries per day.

October 2000 - Google AdWords launches, allowing advertisers to easily create keyword-based text ads that display alongside search results.

February 2001 - Google purchases assets of online firm Deja.com and integrates their Usenet newsgroup searches into the Google site. Google now handles more than 100 million searches per day.

March 2001 - Seasoned technology executive Eric Schmidt arrives as chairman of the board. Schmidt, later named CEO, is seen as bringing grown-up leadership to the rapidly growing company.

Summer 2001 - Google Image Search launches with an index of 250 million images.

October 2001 - Google partners with Universo Online to bring Google searches to Latin American users. Users can now search Google's index in any of 26 languages.

February 2002 - Google launches the Google Search Appliance, a combination of hardware and software corporate customers can use to search their own private networks.

May 2002 - AOL selects Google to provide search and advertising services to its users.

September 2002 - Google News launches in beta as an automated news aggregation and ranking service.

December 2002 - Froogle, a shopping and merchandise search engine, launches in beta.

May 2003 - Google announces AdSense, an advertising program that delivers ads to Web pages tailored to the content of the page.

January 2004 - Yahoo announces it will drop Google and instead use search technology from recent acquisition Overture - which had previously purchased search pioneer Altavista.

February 2004 - Google's index grows to more than 6 billion Web pages, images and newsgroup postings.

April 1, 2004 - Google launches Gmail, a new Web-based e-mail service offering users full searching of their own e-mail boxes and 1 gigabyte of space to store messages.

April 29, 2004 - Google files IPO plans, hoping to raise $2.7 billion through the sale of stock to investors.

July 26, 2004 - Google announces it will seek to sell shares at $108 to $135 apiece - an unprecedented per-share price for a U.S. initial public offering.

Aug. 4, 2004 - Google says it neglected to register 23 million shares and 5.6 million options issued from September 2001 through July 2004, and offers to buy back the shares and options for $25.9 million. The disclosure sparks probes into possible securities violations.

Aug. 13, 2004 - Google starts auction for bids to determine a share price. It amends SEC filings to disclose a Playboy magazine interview that hits newsstands that day.

Aug. 18, 2004 - Revises IPO to offer fewer shares. Securities and Exchange Commission approves IPO paperwork, clearing the way for Google shares to price at $85 and begin trading.