Google Celebrates Five Years Since Its IPO

Google is one of the biggest tech companies in the world and certainly one of the most popular. With solutions as diverse as mobile operating systems and email services, it has its hands on almost every piece of the market and is still churning new products, like the Chrome OS. Still, just five years ago Google was having its IPO amidst a somewhat pessimistic outlook from many experts. On August 19, 2004 the search giant went public with a share price of $85. Now its founders are billionaires, worth a combined $25 billion, and the company is one of most valuable in the tech market.

As Google was getting ready for its initial public offering, it was valuated at around $25 billion, with some asking whether it wasn't an unjustifiably overinflated price. After some hiccups along the way and a sudden drop in price just before the IPO, Google shares became available for $85 a piece. In keeping with its non-formal business dealings and the “Don't be evil” motto, which was actually written into its IPO Prospectus, the company used a “Dutch auction” system to make it easier for individual investors to get a chance to buy the stock.

The first day saw the share price rise 18 percent to a little over $100 and Google raised $1.7 billion in the process. From then on the price went mostly up, doubling just two months after the IPO. It reached its all-time high on December 7, 2007 when market cap topped $226 billion at a share price of $747.24. It wasn't all smooth sailing though as the price dropped the next year, bottoming out at $247.30 on November 21, 2008. It has steadily risen since then, helped by good financial results despite the economic downturn, with a share placed at around $450 and the company worth about $140 billion.

At the time of the IPO Google was still just a search engine and, despite greatly diversifying in the coming years, it still makes around 95 percent of its revenue from advertising. While this has made it into one of the most powerful companies online, the great dependence on advertising money is a significant drawback now that the ad market has sunk along with the rest of the economy. The company is boldly entering markets pretty far off for its core business, like operating systems, but it is going ahead a much more entrenched competition than it's used too. And it may also be seeing increased competition on the home front as well, with the Microsoft-Yahoo deal placing Bing in a much better position to challenge Google's dominance.