Twenty years ago, Michael Grimes, a banker at Morgan Stanley, played a pivotal role in one of the most anticipated Initial Public Offerings (IPOs) of the decade: Google’s. As the search engine company was preparing to go public, Grimes was among the first to be offered a Gmail account. Given the opportunity to choose any email identifier, he requested “[email protected].” But Google co-founder Sergey Brin cautioned him against it, predicting that Gmail would become so popular that Grimes would be inundated with spam. Reflecting on that moment, Grimes told CNBC that he does regret passing up the email address, but the experience was far more significant than that missed opportunity.
The IPO not only established Grimes’ reputation as “Wall Street’s Silicon Valley whisperer,” but it also marked a turning point in the global investment landscape, as the tech industry began to exert its influence. Google’s stock has surged by an astonishing 7,600% since then, an outcome Grimes describes as “momentous.”
Grimes has since shepherded numerous companies through the IPO process, with the cumulative market value of these companies reaching into the trillions. Some of these IPOs, like Facebook’s in 2012, were tumultuous, while others, such as Spotify’s 2018 direct listing, pioneered new approaches. Yet, Google’s IPO stands out as groundbreaking.
“It was the start of the next era,” Grimes reflected. “Google, along with other megacaps that followed, fundamentally changed how we work, live, and play. They achieved more than we ever imagined, and now they are trillion-dollar companies at the top of the market.”
Today, Google operates under its parent company, Alphabet, which is valued at over $2 trillion. The company has expanded far beyond search and advertising, with business units spanning YouTube, Pixel smartphones, cloud computing, self-driving cars, and cutting-edge artificial intelligence. Alphabet’s sheer size and influence have even drawn the attention of the U.S. Department of Justice, which is considering a potential breakup of the tech giant. Alphabet did not immediately respond to a request for comment.
The landscape was markedly different at the time of Google’s IPO two decades ago. The tech industry was still recovering from the dot-com crash, and investor sentiment was cautious. In a bold move, Google opted for a Dutch auction IPO, a process designed to democratize the investment opportunity by allowing a broader range of investors to participate.
The founders’ IPO letter began with a declaration: “Google is not a conventional company. We do not intend to become one.” This statement introduced the world to Google’s “don’t be evil” philosophy, a credo that would become a defining part of the company’s identity.
Grimes recalled how Brin and Larry Page, Google’s co-founders, were committed to leveling the playing field for their IPO. “Their perspective was that if a young engineer wanted to invest $10,000 in Google, she shouldn’t be restricted to just $500 worth or even none, especially if she was willing to pay more than an institution,” Grimes said. “The auction allocations would be determined by price and size, not by who you are. That was the breakthrough.”
Despite warnings from some banks and institutions that the unconventional process was too risky, Grimes and his team at Morgan Stanley embraced it. They built a prototype, tested it for a billion bids, and ultimately won the coveted “left lead” position on the IPO. For the roadshow, Google’s leadership split into three teams, with Brin, Page, and CEO Eric Schmidt each leading one.
The IPO, though unconventional, was deemed a success. Google overcame a weak market and an unproven offering model to deliver a solid first-day return, with a market capitalization exceeding $27 billion. From there, the stock only continued to rise.
It would take over a decade for the principles behind Google’s IPO to catch on. While consumer technology brands like Facebook, Twitter, and LinkedIn initially chose the traditional IPO route, several high-profile listings between 2019 and 2021 embraced elements of Google’s democratizing approach. For instance, Airbnb offered shares to its hosts, Uber and Lyft provided shares to their drivers, and Robinhood gave its customers access to its IPO.
Assessing the impact of Google’s “don’t be evil” mantra — and how it has evolved — is more complex. Grimes declined to comment on the current state of Google, citing client confidentiality.
Today, Google faces new challenges. The company, once the embodiment of innovation, is now accused by U.S. and European regulators of stifling competition. Although it remains at the forefront of the generative AI revolution, Google’s core business of search and advertising faces its most significant existential threat in decades.
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