The Evolution of Google’s IPO Leader from Newcomer to $2 Trillion Tech Giant

Two decades past, back when Michael Grimes, a banker at Morgan Stanley, was contributing to the public offering for the emerging entity behind the Google search engine — one of the most awaited IPOs of the era — he was amongst the pioneer recipients offered a new email service. At that time, he could have selected any username for the service, so he requested [email protected].

Sergey Brin, Google’s co-creator, intervened. Grimes recollects Brin cautioning him, “Oh no, you shouldn’t pick that. Gmail will be significant. You’ll be inundated with spam forever.”

Grimes admitted he regrets declining the email address. Nonetheless, the IPO aided in solidifying his reputation as the “Wall Street’s insider on Silicon Valley,” just as the tech realm commenced transforming investment procedures worldwide.

He considers Google’s IPO, which has surged by 7,600% over the recent two decades, as “monumental.”

The cumulative market value of the companies Grimes has steered public is in the trillions of dollars. Some events were more tumultuous, such as Facebook’s IPO in 2012, while some led pioneering innovative structures, including Spotify’s direct listing in 2018. However, Google’s IPO was groundbreaking.

“It marked the onset of a new era,” Grimes articulated. “Google [and linked megacaps] revolutionized the way we function, live, and entertain. They did it in grander extents than we could have ever anticipated, and now these are trillion-dollar corporations reigning at the apex.”

The Growth of Google Under Alphabet’s Umbrella

Currently operating beneath the umbrella of Alphabet, Google commands a value surpassing $2 trillion. It has transcended beyond search and advertising, comprising YouTube, Pixel smartphones, cloud computing, autonomous vehicles, and generative artificial intelligence among its numerous business segments. It stands as an expansive tech entity, to the extent that the Department of Justice might be considering dividing it.

Alphabet was unavailable for immediate comment.

Back during Google’s IPO two decades ago, the tech sector was still recuperating from the dot-com bubble of the early 2000s, with investors proceeding with caution. Instead of opting for a conventional offering, Google decided on a method known as a Dutch auction, aiming to democratize the IPO scheme by permitting a broader spectrum of investors to engage.

The founders’ IPO communication initiated, “Google is not your typical corporation. We have no intentions of transforming into one.” This also unveiled Google’s “don’t be evil” ethos.

Grimes remarked that Brin and Larry Page were keen on a fair playground for their IPO: “Their stance was: Why should a young engineer selling a portion of her vested stock from Cisco or elsewhere and looking to invest $10,000 in Google be informed she can only acquire $500 worth or nothing? Particularly when she is willing to outbid the institution by a dollar.”

“The auction allotments,” Grimes elucidated, “would be predicated on price and dimension. Not on identity, and that was the thrilling part. It was the fundamental breakthrough.”

Grimes appended that while some banks and institutions cautioned Google’s founders against the unconventional process, alleging it deviated from the norm, others, including his team, advocated support.

Securing the eminent “left lead” in the IPO has remained and still remains a competitive challenge. The Morgan Stanley crew embraced the layout, fabricated a prototype, and tested it for myriad bids.

For the road show, they divided into three separate teams. Both co-founders, Brin and Page, individually led two teams, with CEO Eric Schmidt heading the third.

As per prevailing opinions, the IPO proved successful. Despite enduring a soft IPO market and an untested offering model, Google managed to generate a substantial return on the first day, with a market cap exceeding $27 billion. Subsequently, the stock perpetually appreciated.

Nonetheless, it demanded over a decade for the fundamentals behind Google’s IPO to gain traction. Consumer tech brands like Facebook (now Meta), Twitter (now X), and LinkedIn (now owned by Microsoft) adhered to the traditional IPO route. Yet, several distinguished listings between 2019 and 2021 encompassed facets aligning with Google’s democratizing intention.

Airbnb initiated share purchasing possibilities for hosts at the IPO price. Uber and Lyft extended share availability to their drivers, while Robinhood granted clients access to its IPO.

Assessing the enduring repercussions of Google’s “don’t be evil” doctrine — and its maturation — proves intricate. Grimes preferred to refrain from contemplating the present-day Google, clarifying that discussing clients isn’t viable.

In the contemporary scenario, Google is confronted with accusations from U.S. and European regulators of stifling innovation. Although the company spearheads the transition towards a generative AI platform, its core operations in search and advertising — still fundamental — confront their most significant existential peril in decades.