Google's Indicated Price Range is Reasonable, But Risks Abound, Says S&P Equity Analyst in Second Pre-IPO Report NEW YORK, Aug. 9 /PRNewswire/ -- Based on numerous methods of valuation analysis, it is Standard & Poor's opinion that the price range Google Inc. has provided in advance of its upcoming initial public offering (IPO) appears reasonable, however, a number of factors could have a negative impact on the near-term prospects for the shares, according to a pre-IPO report released today by Standard & Poor's Equity Research Services(1). Using relative, intrinsic and option analyses, Standard & Poor's calculates a possible valuation for Google of $121 to $127 per share, although uncertainties associated with the Dutch auction process, the potential distraction of unrelated significant news events, the challenge of issuing shares during a seasonally slow time for stocks in general, and the recent unfavorable climate for technology and Internet stocks could restrain share performance. The report also includes information regarding the auction process, and guidance to would-be investors in Google on how to proceed with bids and in the after- market. "We evaluated Google against its competitors and peers, including eBay and Yahoo, which trade at significant premiums to the S&P 500 Index reflecting their ability to generate revenue and profit growth without comparable operating or capital requirements, as well as Amazon.com and IAC/InterActiveCorp -- which we view as more traditional companies -- in conjunction with analyses based on discounted cash-flows and option grants," says Scott Kessler, Internet Software & Services Equity Analyst and author of the report. "These analyses suggest Google's fair market value could be $121 to $127 per share, within the range indicated by the company. However, there are many risk factors to consider relative to Google, potentially including commoditization of its offerings, challenges related to the introduction of new products and services like e-mail, and competition from the likes of Yahoo and Microsoft. Near-term external factors, not the least of which is the recent adverse sentiment for technology and Internet stocks in general, constitutes an additional reason warranting investor caution," concludes Kessler. The publication is the second of a two-part report issued by Standard & Poor's Equity Research Services. Part 2 addresses not only issues related to valuation, but also the Dutch auction process. Part 1 was issued June 7. Readers can purchase either or both parts of the report online for immediate download at http://sandp.ecnext.com/ipo . Members of the media can request the report from the communications contact listed at the end of this release. Additional information on Standard & Poor's pre-IPO coverage on Google can be found at http://www.standardandpoors.com/pre-ipo . This press release is being issued for information purposes only and should not be considered a solicitation to buy or sell any security. Neither Standard & Poor's nor any other party guarantees the accuracy of any information contained herein or regarding results from its usage. Data and information about Google, Inc. used in the report are exclusively from publicly available documents filed by the company with the U.S. Securities Exchange Commission. About Standard & Poor's STock Appreciation Ranking System (STARS) Standard & Poor's STock Appreciation Ranking System (STARS), which was first introduced on December 31, 1986, reflects the opinions of Standard & Poor's equity analysts on the price appreciation potential of 1,500 U.S. stocks for the next 12-month period. Rankings range from five-STARS ("Buy") to one-STARS ("Sell"). About Standard & Poor's Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research, data and valuations. With 5,000 employees located in 20 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com/ . The analyst referenced above is a Standard & Poor's equity analyst. He has no affiliation nor ownership interest in any company referenced above. The equity research reports and recommendations provided by Standard & Poor's Equity Research Services are prepared separately from any other analytic activity of Standard & Poor's. In this regard, Standard & Poor's Equity Research Services has no access to non-public information received by other units of Standard & Poor's. Standard & Poor's does not trade for its own account. (1) Standard & Poor's believes risks to Google, its shares, and our related projections include among other things, commoditization of the company's offerings, difficulties related to its introduction of new products and services and competition from the likes of Yahoo and Microsoft. Google also has limited operating history, expects to invest heavily in new initiatives, is and will likely to continue after its IPO to be controlled by its founders, is employing a largely untested process to price and distribute its shares, and may not provide business or financial information as detailed as that disseminated by other public companies. DATASOURCE: Standard & Poor's CONTACT: John J. Piecuch Communications Manager (+1) 212-438-1102 Web site: http://www.standardandpoors.com/ http://sandp.ecnext.com/ipo http://www.standardandpoors.com/pre-ipo

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