Google (NASDAQ: GOOG) Celebrates 10 Years Since IPO

Larry Page, ,Google, IPO, Stock Any new company needs to be focused on two things: answering problems that consumers face in their daily lives and how closely it sticks to its mission statement, the mantra that gives the prospective company its identity and separates it from existing alternatives in the marketplace. Google (NASDAQ: GOOG) aspired to bring clarity to the emerging omnipresence of the internet, offering then, forward-thinking innovations, such as spell checks and calculators as defining benefits of switching to the aspiring search engine.

More than anything, Google’s success, especially noteworthy in the jump in annual revenue from a pre-IPO level of around $3.2 billion to a currently gaudy level of $65 billion dollars, is attributable to its ability to stick to the ideals that predated the company’s infiltration of the vernacular as a verb that is thrown around countless times in our day to day lives. In the spring before the search engine giant’s August IPO, Google’s founders penned a letter to would-be shareholders, introducing the letter with the audaciously simple sentence: “Google is not a conventional company”.

Letter to Shareholders Proves Prescient as to How Company Would be Run

One of the main elements of the 2004 letter is the insistence that Google would not operate in the interest of pleasing Wall Street, meeting quarterlies and other metrics, at the expense of the company’s long-term viability. The now famous letter outlined inalienable goals that did not directly correlate with financial gains for investors, such as offering services in more than 90 languages and offering many features completely free of charge. Embodying the outside-the-box thinking that has defined the company’s actions during the past decade, Google’s IPO was offered on an auction basis, an undertaking only 14 companies have taken on in the decade since.

As outlined in the Google “triumvirate” of founders manifesto, an auction-based IPO allows for a more rational and accurate pricing of the company’s stock in the days that follow the sensationalism that abounds during the IPO process. Seemingly outlandish, for the time, the founders explicitly stated their desire for investors not to purchase IPO shares in the interest of making a short-term and speculative profit. 

Those who heeded the advice of Sergey Brin and Larry Page and took the plunge into the long-term alongside the world’s largest search engine have been handsomely rewarded, as Google shares are up nearly 1,300% in the decade. In comparison, the S&P index, as a whole, has trended up around 100% in the same time period, with a grand total of 10 individual stocks outperforming the giant. 

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