NOTE: Updated 4PM Eastern with About.com/LookSmart expiration data and fact that it's unclear if Google will retain Sprinks distribution deals. Both updated parts listed in bold.
In a busy financial day for Google, the company purchased Sprinks, the former paid listings division of PRIMEDIA's About.com, while it was also revealed that an initial public offering is planned for early next year.
Google IPO In March?
The Financial Times broke the story that Google plans an IPO perhaps as soon as March. The company is reported to have met with investment bankers about an IPO last week. It's also apparently considering an online auction, allowing investors to bid for shares directly. Investment bankers are estimating that the IPO might value the company at between US $15 and $25 billion.
Reuters reports that only 53 public offerings in history have exceeded $1 billion and that for comparison purposes, Yahoo and Amazon are valued at $26 billion and $22 billion respectively.
Earlier this month, Barron's Online reported that Google may have to go public simply because it has too many employees. If I recall correctly, this is one of the main reasons that Microsoft was eventually forced to go public. Latest rumors are that Google makes more than $100 million in profit off up to $1 billion in revenue.
Google Buys Sprinks
Meanwhile, Google has acquired Sprinks, a paid listings service that was owned by PRIMEDIA. As part of the deal, Google will provide paid search and contextual listings to PRIMEDIA. The main distribution point for Sprinks listings has been on PRIMEDIA-owned About.com.
Paid listings from Sprinks currently appear on About.com in various locations. Those viewing one of About.com's "guides," such as the Beadwork guide, are shown contextual ads powered by Sprinks in the Sponsored Links section at the bottom of the page. These links will now be provided by Google.
I've not yet spoken to Google (and will update when I do), but I would expect that that these contextual links will eventually be drawn from its Google AdSense service, which I would expect to replace the existing Sprinks service. About.com couldn't confirm this but did say there would be a 45 day transition period of some type.
Paid listings also appear on About.com in response to keyword searches that people may perform, such as this one for needlepoint. Sponsored Links shown here in sidebar boxes also come from Sprinks, but from its search keyword-targeted program, not the contextual one. These listings are to be replaced by Google AdWords listings as early as this weekend.
LookSmart and Inktomi results that appear in the "On the Web" section of About.com results and will not be replaced by Google's web search results. The Inktomi deal runs through February 2004, About.com said. LookSmart's deal ends in December 2003, according to the company's public financial documents.
Another major Sprinks distribution point is on various InfoSpace-owned search engines, such as Dogpile. It's unclear whether Google will inherit these or other deals.