Does Playboy Interview Violate Google IPO?
On the day of the IPO comes more Google controversy – Google’s founders will appear in an upcoming issue of Playboy magazine. Although the interview was apparently held before the IPO hype, the Playboy interview may have broken US Securities laws over pre-IPO “quiet periods”. The interview controversy just adds to the twists and turns that Google has been going through while trying to launch their highly watched and unorthodox $3.3 billion initial public offering.
In the filing with the SEC, Google said it does not believe its involvement in the Playboy article constitutes a violation of “quiet period” rules. However, Google could be required to buy back the shares sold to investors in the IPO at the original purchase price for a period of one year following the violation.
The article in the September 2004 issue of Playboy entitled “Playboy Interview: Google Guys” could have potentially violated the so-called “quiet period” that limits communication by company executives ahead of their IPO.
According to the company filing, the article was derived from an interview with Google founders Larry Page and Sergey Brin.
Google said it does not believe its involvement in the article constitutes a securities violation, but it could be required to buy back the shares sold to investors in the IPO at the original purchase price for a period of one year following the violation.
And what is this Playboy hype all about? Not much really. We haven’t read the interview yet, but here is the excerpt from the Playboy.com website (we will not be linking to this external site because of adult content):
PLAYBOY: What does Google do that early search engines didn’t?
BRIN: Before Google, I don’t think people put much effort into the ordering of results. You might get a couple thousand results for a query. We saw that a thousand results weren’t necessarily as useful as 10 good ones. We developed a system that determines the best and most useful websites. We also understood that the problem of finding useful information was expanding as the web expanded. In 1993 and 1994, when Mosaic, the predecessor of Netscape, was launched, a “What’s New” page listed new websites for the month and then, when more began appearing, for the week. At the time, search engineers had to deal with a relative handful of sites, first thousands and then tens of thousands. By the time we deployed our initial commercial version of Google in late 1998, we had 25 million or 30 million pages in our index. Today we have billions — more than 4 billion, in fact. That volume requires a different approach to search technology.