Google to raise $4bn war chest for acquisitions

LONDON - Google has been tipped to make more acquisitions after it announced yesterday, almost a year after its flotation, that it is to raise $4bn (£2.24bn) by issuing more shares.

Prudential analyst Mark Rowen said he believed the company "is building a war chest for further acquisitions". Google also had $2.95bn (£1.65bn) in cash and cash equivalents as of June 30.

Another analyst, Lauren Rich Fine at Merrill Lynch, said possible targets were Chinese internet company, PVR company TiVo, and internet search and mobile phone services company InfoSpace.

The announcement prompted a 1.79% fall in the price of its existing shares from $284.84 to $279.75 at the close in the US. The new shares to be issued would increase the total number of Google shares by 8%.

Google put its quirky stamp on the issue by deciding to issue exactly 14,159,265 shares, referencing the mathematical figure Pi.

Since it debuted on the stock market at $85 a share on August 19 last year, Google's earnings have surged on the back of the boom in search advertising.

However, it is facing increasingly fierce competition from the likes of Yahoo! and Microsoft and it recently said that its earnings growth may slow. Analysts believe it will embark on an acquisition spree to maintain its growth.

After the market was disappointed by its second-quarter figures, its share price fell back from its record high of $317.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum.


Become a member of Campaign from just £51 a quarter

Get the very latest news and insight from Campaign with unrestricted access to ,plus get exclusive discounts to Campaign events

Become a member

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an alert now

Partner content