CEO of Google’s IPO, Larry Page, says Facebook and other tech companies have become too big to fail
AUBURN HILLS, Mich.
— Google Inc. Chief Executive Larry Page on Wednesday said the social media company has been hurt by the rise of Facebook Inc. and other companies and that he wants to return to its roots in search.
Google’s board of directors approved the company’s initial public offering, a rare occurrence for tech stocks, but it’s unlikely to bring in the profits it hopes for.
Google was the first of the biggest technology companies to be publicly listed since the U.S. economy crashed in 2008.
The company, which is based in Mountain View, Calif., has long sought to build its search business in Asia, and in the process has taken on new competitors in the area.
Its parent, Alphabet Inc., is the parent of Google.
Google is seeking to raise about $200 billion in a deal that would give it control of a large chunk of the Internet search market and its search advertising business, which includes ad services such as Google Maps and YouTube.
The company also would become the biggest Internet company by market value, with a market value of about $60 billion, according to the valuation firm Renaissance Capital.
But the company also needs to get past a major hurdle: Google, which already has more than half the Internet’s search market, is now under pressure to show it can survive as a standalone company without Google as a core part of its business.
Its stock has fallen from a peak of $62.94 in April to a low of $12.10 Wednesday after a surge in speculation about its IPO.
Google’s stock closed at $50.89, down $1.75, or 3.3%, on Wednesday.
Markets have been waiting for Google to prove it can be more than a search engine and start a search business for years.
It was one of the first Internet companies to go public in the U-S.
market in 1998, and it went public in New York in 2003.
Since then, it has made a series of acquisitions and partnerships with companies including Microsoft Corp. , which makes the popular Windows software.
In recent months, Google has also been trying to build a strong advertising business that will help pay for a major new acquisition it plans to make in the future, an acquisition that is expected to give it more control of the search advertising market and more revenue from that market.
The deal announced Wednesday would give Google an interest in nearly all of the advertising on Facebook, Google’s primary advertising network.
The deal also would give Facebook an interest on the social networking site, according the company.
Google also would have an interest, according, in the revenue generated by YouTube, the company that allows people to post videos, photographs and other content on YouTube.
Google owns about 90% of YouTube, according a person familiar with the matter.
The new deal, announced Wednesday, would give the company an interest of more than 10% in YouTube.
Facebook also would be a majority stakeholder in the company, the person said.