Why I won’t be buying any Google shares

Actually, it’s quite boring. I won’t be buying any shares in Google because I never buy shares in anything. The only businesses I’ve owned shares in are my own. This probably explains why I wasn’t on Concorde’s final flight last week.

Anyway, Google is now such a household word that you can barely pick out the news about the IPO from the casual mentions of the brand everywhere. Try searching for ‘google’ at The Guardian, for instance.

This is an extraordinary brand, crossing over from weird, stripped-down, geek phenomenon to mainstream consumer fixture in three years.

Zoe Williams Googles herself. An unnamed correspondent in The Times scrabbles for laughs with Google’s translation services. Tom Reilly celebrates Googlewhacking in The Observer (Hey, I’ve got one of those, sort of).

Closer to the point, Vic Keegan, in The Guardian, laments the flotation and John Gapper in the FT worries about Google’s fragile technology lead.

People have a skewed, idealised image of Google. Businesses, once they’ve achieved a certain size, look for a stock market listing. That’s how capitalism works. Listed businesses get access to larger amounts of (cheaper) capital than private ones. They use it to build boring, mainstream businesses and these businesses create jobs and boost economies. The idea that Google might have avoided going public is a product of the twisted Internet imagination. A privately held Google could never really change the world. The obvious risks from exposure to the great unwashed are inevitably outweighed by the growth that access to all that fresh capital will produce. There is a reason why important businesses are listed on stock markets and Google – unconventional image notwithstanding – can’t ignore this.

Homework: make a list of very large privately owned companies (Bertelsmann?). Now make a list of really important privately owned companies – ones that can move cultures and economies over the long term (clue: there aren’t any). Google, like any proper business, consciously and unconsciously longs for influence, notoriety, longevity, scale – all of which flow from a stock market listing much more easily than from a nice, quiet, private life out of the mainstream.

7 thoughts on “Why I won’t be buying any Google shares

  1. Great private companies

    Matthew says he likes "an excuse to come up with lists", so here’s one from Steve Bowbrick via Lance Knobel: Homework: make a list of very large privately owned companies (Bertelsmann?). Now make a list of really important privately owned…

  2. Its an interesting question, but not i think as open and shut as you think. Big Banks changed the way we view money; Microsoft revolutionised what we expect on the on button; BT (“Its Good to Talk) single handedly altered how we Brits deal with conversation-for-its-own-sake. Coke made the idea of food-as-subsistance less important. McDonalds changed our conception of what a family should have to pay for a meal. News International is still altering the way we understand current events. Nestle, by contrast, probably did more to change our understanding of what was a just corporate action. In the same way Brown and Williamson defined a new consumer understanding of risk.

    Although you are right that companies rarely have the same directly cultural impact as artists or novelists, it would be odd if these mamoth institutions didn’t change culture and behaviour. I think they do, and do so profoundly.

  3. I think we’re agreeing. My point (which I’m exaggerating a bit) is about the differences between stock market listed businesses and privately held businesses. The former tend to live their lives as if on a public stage, to attract visionaries and showmen, to create lasting value – social, economic, cultural (and not always benign) – while the latter tend to stick to their knitting and produce steady profits (if they succeed at all). Who could refuse a group of ambitious managers the opportunity to play on the big stage? I sometimes think that the extremes of corporate showboating (not the fraud and greed but the overambitious acquisitions and epic expansions) are the price we pay for a productive private sector.

  4. i don’t think we are agreeing. all of the companies i mention are Fortune 500, or were. There is a difference between attitude – which i grant you has more flair in /some/ non-listed companies – and impact. Stockmarket listed companies almost always have more impact, in the round, cos they are bigger. Google is an odd exception to this rule. You may also be in danger of comparing good and daring unlisteds with bad and lumpen listeds. Both types exist in both sectors, right? And of course there is always a different between a young company and an old. But being a young company doesn’t really connect with being unlisted in as much as some old companies are listed, most aren’t. Being young and ambitious is the key – it has less to do with corporate governance and ownership.

  5. But ownership is critical – the entire upside-down pyramid of capitalism teeters on publicly traded equity. There literally is no alternative – not without a bottom-up rethink of value creation and distribution. If going public is a *bad thing* in any kind of general-case, objective way, then we’re in deep trouble. So we need companies like Google to continue to believe that they can do more, go further, be grander and better and more famous and influential through a stock market listing. The universe of capital divides neatly into small, privately-held firms and large, publicly-traded firms. Large, privately-held firms are anomalous and need to remain so – sore thumbs, dodos, blah blah…

    And that’s without even beginning to touch on accountability – how accountable is a privately-held infrastructure monster like Google?

  6. Philosophies aside — and Google sounds like a couple of freshfaced,moral kids, now mature adults [hopefully that in many ways] with many dedicated, inventive employees — what do you think of the prospect of buying the ISP whenever it appears by Google? Where will it likely be listed? What chance for share price increase worth investing to sell later, knowing no dividend in the offing for a long, long time?I intend to ask a broker [whom I believe to be honest!] same questions.HOW DO I REACH YOU AGAIN FOR ANY ANSWER!?? I STUMBLED ON THIS.

  7. I won’t be buying any shares in Google because I never buy shares in anything.

    really? isn’t this blogging thing fantastic.not a waste of bandwith at all

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