Google, the search engine giant.

Rosneft, Ireland’s state owned oil giant.

Netscape Communications Corporation, one of the software program manufacturer giants.

Aside from the descriptive word “giant” which refers to their well established corporate system in their respective industries, these three companies have something in common, together with other large business entities around the world.

They went public through the IPO or the initial public offering.

For individuals who are not avid fans of the issues and other whereabouts circling around the business and investment community, initial public offering does not make sense at all. However, for most corporate entities who want to pursue expansion of their operation as well as providing additional services to the public, initial public offering is an important matter for them.

In finance, IPO or the initial public offering is the first issuance of a company’s common shares to interested public investors.

The term “common shares” generally refers to the stocks that are consistently purchased and sold in the market. Take note that common shares are only a percentage of the total shares of a certain company or corporation, thus the majority of its shares are still within the owner/s of such company or corporation and will not be a subject for distribution to the public.

The principal purpose of a company to “go public” (another term for undergoing the IPO process) is to raise capital for the company or corporation.

In other words, IPO is one of possible ways where a company or a corporation can raise capital which can be used either for additional support to its day to day operation or for business expansion purposes. However, any companies or corporations that will undergo the IPO process are obliged to follow heavy legal compliances and other necessary requirements.

The procedure works just like of a regular auction process.

It generally involves several investment banks that will serve as the underwriters for the process. In finance, underwriters are the ones assessing the background of the companies involved in the process preceding the issuance and distribution of common shares to the public. The company or corporation that decided to go on public (or the issuer) will enter an agreement with a lead underwriter to sell the common shares to the public.

The underwriter meanwhile approaches various investors who are interested in purchasing any common shares for sale.

In case of large IPO process (which involves large corporate organizations), it is typically underwritten by a syndicate (a group of investment banks dealing with a single company) that is led by a major investment bank which is the lead underwriter. Once the common shares have been distributed to the investors, the underwriters are paid through commissions that are based on the percentage of the value of the common shares they sold.

In most cases, the lead underwriters take out the highest commission, with around 8 percent.

For multinational companies that will undergo initial public offering, the process may involve two or three syndicates to deal with various legal requirements in its home country and other countries as well. In addition, because of the heavy legal compliances that must be met, IPO process usually involves two or more law firms that have major practices on securities law.

Initial public offering is important for every corporate organization operating around different markets. Despite of the heavy legal requirements, it is still the best way to raise capital for any company or corporation.

Bulky text documents, cassette tapes, video home system (VHS) tapes, or even digital video discs (DVDs) as well as other items of information can be stored in a single webpage or a website on the World Wide Web and can be accessed with the use of a web browser.

That is the power of Internet technology-the storage as well as the access of various items of information can be done by just having an Internet connected personal computer.

You don’t need to carry VHS tapes or DVDs to watch your favorite movies over your friend’s home theater system. Just upload it on a webpage and you can access it directly to your friend’s computer system especially if it is hooked on the Internet.

In the same manner, you can listen to your favorite music without the need for several audio compact discs (CDs) or cassette tapes and a music player.

All you need is a compatible multimedia speaker connected to your personal computer system and you can download different audio files and play it directly to your built in audio/video media player.

Probably you are familiar with the respective functions of your personal computer system. If your PC unit is hooked on the Internet, you frequently used a computer software application that you used to have an access over different items of information which is called the web browser.

In computer system application, it refers to a software application that enables you to display and interact with images, text documents, audio and video files, and other pieces of information stored on a webpage or a website within the World Wide Web or even in the LAN or the local area network.

In other words, your web browser allows you to access information provided by different webpage within many websites through hyperlinks.

There are different web browsers available for your PC unit, some of which are Internet Explorer (Microsoft) and the Mozilla Firefox (Mozilla Corporation).

Of course, who would ever forget the first web browsers during the early years of the World Wide Web in computer system application, which is the Netscape?

Netscape is the web browser owned and developed by the former Netscape Communications Corporation, which was dominant before with regards to usage share (the percentage of web visitors to a group of websites that uses a particular browser). However, because of the browser wars, Netscape lost much of their user base in terms of usage share area. It leads to the existence of the company within the span of 9 years (from 1994 to 2003) and later on became the subsidiary of the America On Line (AOL).

The glorious years of Netscape started when it completed its initial public offering on April 1994, barely 16 months after the company’s founding. The first issuance of their common shares to the public became the most remarkable step that they have made within the first few months of the company’s operation. Because of the IPO, they grew faster than any other software company in the history.

Their initial market value rose to $1 billion as against any other software companies whose market value were just around $200 million to $300 million. In addition, they had enough cash to compensate most of their expenses.

In other words, Netscape’s first initial public offering helped them in another way to became one of the successful software companies during the 20th century.

The World Wide Web is one of the greatest masterpieces created by the imaginative minds of human beings. It is a worldwide, read and write information space wherein you can find different items of information such as text documents, images, multimedia items, and others.

Such items of information can be uploaded, downloaded, accessed, or cross referenced in the simplest possible way.

And that simplest possible way is through the search engines.

Also known as search service, search engine refers to a specific program developed to help search various information stored on a computer system or resources such as the World Wide Web.

It allows anybody to ask for any content meeting specified criteria (usually those containing a specific word or phrase), and the search engine will return a list of references that matches those criteria specified in the search. Search engines employ consistently updated indexes in order to operate efficiently and display related results.

Search engines can be used on different environments (such as enterprise search engines that makes search on intranets or personal search engineers that involves search on individual personal computers).

However, its most common applications is within the walls of the World Wide Web, the purpose of which is to retrieve different pieces of information stored on the web.

The convenience that resulted to the popularity of Web search engines among Internet users paved the way for the rise of different search engine, one of which is the Google Inc. which launched its first search engine results in 1998.

The success for Google followed in 2001 which was based on the concept of PageRank (patented method of assigning numerical weight in each element of hyperlinked set of documents to measure its relative importance within the given set) and link popularity. The larger the number of websites and linked webpage, the more refined the result will be when a search will be done.

Until now, Google search engine still leads in terms of finding information over the World Wide Web.

To accommodate large number of searches and probably add several new features to their search services, Google announced that it will go on public in April 30, 2004.

The statement “Google will go on public” refers to their filing of initial public offering before the Securities and Exchange Commission. Initial public offering or also known as IPO is the initial sale of a corporation’s common shares to the public.

In other words, Google filed the first issuance of their common shares to interested public investors (any later issuance of common shares to the public will now be referred to as a secondary market offering) in the hope to raise additional capital for the corporation. Google expects that they will be able to raise as much as $2.7 billion from the offering, which will take the format of an online auction to make their common shares widely available to the public.

The IPO process involves several investment banks as the underwriters who offer the common shares for sale to the public.

In the case of Google, the lead underwriters for their deal were the Morgan Stanley and Credit Suisse First Boston.

Many investors have seen the IPO filing from Google as “another event that will lead to another technological boom period” because of additional features that Google may include in their services. But the bottom line here. Google went public because they have seen its profitability at the end of the deal.

And Google have that market worth of around $24 billion after their initial public offering process.