The jump was a surprise, given the initial $85 price of the shares and the unusual style of the sale. IPOs are typically priced at a discount in order to give buyers a first-day "pop," but Google used a rare Dutch-auction format that aimed to maximize the money going into the company's own pockets instead.
The long-awaited IPO
begins trading Thursday
at $85 per share.
The shares began the day at $100 and closed at $100.33. The Mountain View, Calif.-based company, which runs the No. 1 site for searching the Web, is trading under the symbol "GOOG."
"The first trade of the day can set the tone for the rest of day," said Richard Peterson, an IPO analyst at Thomson Financial. "It'll probably end up higher at the end of day. If it had traded down, investors might have sat on the sidelines and watched what it would do."
Online jewelry retailer Blue Nile and educational software provider Blackboard are two examples of tech companies that launched out of the starting gate this year, trading up from their IPO price.
Google saw 6.5 million shares trade hands within the first 13 minutes of trading, a Nasdaq spokeswoman said.
Technology companies this year have averaged first-day gains of 14 percent with their IPOs, while first-day gains for all IPOs averaged about 10 percent. Still, a number of Wall Street observers said they expected Google's share price to trade down once it hit the market.
On Wednesday, Google set its long-awaited initial public offering at $85 a share, well below the company's original range of $108 to $135. Google and selling shareholders raised $1.66 billion by floating out 19.6 million shares.
The IPO is seen as validation of Google's beloved search service and its popular advertising network. With its newfound cash hoard, Google will be armed to compete against rivals Yahoo and Microsoft in the quest to dominate Web search.
In the six years since its founding, Google has revolutionized how people find information on the Web and has become a household name. Despite its mission to "organize all the world's information," the company has come to resemble a jack-of-all-Internet-trades, with services for Web publishing, e-mail and ad-blocking.
The most important developments for the company relate to online advertising, which represents 95 percent of its $1 billion annual revenue. In 2001, the company introduced a pay-per-click advertising system that lets marketers bid for placement adjacent to search results. That move came on the heels of the commercial success of GoTo, a company that used a similar type of system. Google's ad service differs from that of GoTo--which is now Yahoo-owned Overture Services--in that it takes into account how often people click on a marketer's text ads in order to determine an ad's placement in sponsored listings.
Google syndicated its ad program in 2002, allowing companies such as America Online and Ask Jeeves to display its search-related advertisements and share in the profits. With this move, Google and Overture became heated rivals for ad-distribution partners. In 2003, Google introduced contextual-based advertising that lets publishers display text ads related to content, instead of related to search.
Google is developing other new services to do battle with competitors. This year, it began working on new local search and personalization services. Given that it has already started copying and indexing some publishers' works, it seems likely the company will also introduce a searchable book service in the next year or two. The company has also set its sights on desktop search.
Google will have to pull out the stops to maintain its dominance and grow into new markets. The company already faces significant competition from rival Yahoo, and Microsoft is preparing its own challenge. Later this year, the software giant's MSN Web portal is expected to unveil its own search technology.
Thursday's trading marks the end of a lengthy IPO process for Google, whichin late April. Federal regulators have been scrutinizing the deal in recent weeks because of several miscalculations on Google's part. These included as many as 28 million shares issued to insiders and .
Late Wednesday, the Securities and Exchange Commission gave Google's IPO the green light to proceed.
CNET News.com's Dawn Kawamoto contributed to this report.