Google chief financial officer George Reyes met with investment bankers last week to test the waters for its initial public offering, according to a report published on the Financial Times Web site. The company could be publicly traded by March 2004, the report said.
Google spokesman David Krane declined to comment on the report.
Plans are still in the early stages for the IPO, which could value the company at more than $15bn (£8.9bn). The FT said Google executives have contacted bankers to discuss how the sale should be handled, including raising the possibility of using an electronic auction method.
Such an auction would cut underwriting costs and distance Google from investment banking scandals like those during the dot-com boom, according to the report.
The process would also allow investors equal chances of buying into the IPO, rather than allocating shares to investment banks that can dole them out to preferred customers.
The report did not mention the names of the investment banks Google contacted.
Electronic IPO auctions are closely associated with San Francisco investment bank WR Hambrecht, which has pioneered the method through its OpenIPO service. Since 1999, the bank has brought eight companies public using Dutch auctions to set the price and allocation of shares, including Web magazine Salon.com, coffee retailer Peet's Coffee & Tea, and most recently, online retailer RedEnvelope.
The possibility of an IPO comes as no surprise, given Google's success in becoming a brand synonymous with Web search. The company runs its own Web search site but powers algorithmic search for a number of high-profile clients, including Yahoo and Time Warner's America Online unit.
Google also runs a commercial search service called AdWords, which auctions sponsored link placements on a cost-per-click basis. Commercial search has become a lucrative business, because advertisers must pay every time a user clicks on a sponsored link. AdWords competes with Overture Services, now a subsidiary of Yahoo.
The Google IPO could be a watershed event on par with Netscape's public offering in 1995.
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