Google plans mega stock offer

On Thursday, the eve of the first anniversary of its IPO, Google announced plans to sell 14.2 million shares of common stock on the public market, as it seeks to raise more capital.

Google, which last year raised $1.7bn (£940m) with its long-awaited IPO, is hoping to raise in excess of $4bn in this secondary offering, based on the current market price of $285 per share, according to its filing with the Securities and Exchange commission.

In its SEC filing, the company stated: "We anticipate that we will use the net proceeds from this offering for general corporate purposes, including working capital and capital expenditures. In addition, we may use proceeds of this offering for acquisitions of complementary businesses, technologies or other assets."

Google noted it does not currently have any "material" merger agreements pending, according to its SEC filing.

Google's secondary offering comes at a time when the search engine giant has seen its share price rise more than threefold from its IPO price of $85. Last year, Google made its public debut with a controversial Dutch-auction IPO.

Rapid growth in its revenues and profits, including the 300 per cent jump in second-quarter net income, has helped fuel its rising stock price.

But in its SEC filing, Google issued a word of caution regarding future growth as the company matures and competition increases.

"We expect that our revenue growth rate will decline over time and anticipate that there will be downward pressure on our operating margin. We experienced both of these trends in the three months ended 30 June. We believe our revenue growth rate will generally decline as a result of increasing competition and the inevitable decline in growth rates as our revenues increase to higher levels."

In early trading on Thursday, Google shares sold at $278.25, down $6.85, or 2.4 per cent.

Dawn Kawamoto writes for CNET News.com