Google sells $2.07bn of its stock

3 Apr 2006

US search engine company Google has raised $2.07bn (£1.2bn) through its second share sale in seven months.

Google, which first listed on the stock market in August 2004, sold 5.3 million shares priced at $389.75 each.

The shares were sold to funds that track the Standard & Poor's 500 index because Google has replaced oil firm Burlington Resources in the benchmark.

Google is planning to use the cash from the sale to fight off stiff competition from rivals Yahoo! and Microsoft.

Price growth

A recent report found that four out of 10 web searches conducted in the US are now done using the Google search engine, giving the company a 42% market share in February.

That makes Google the world's most-used search engine and rivals have renewed efforts to eat into its market share.

To stay ahead of the competition, Google is expanding into new areas and has bought other companies to broaden its access to the online advertising market.

Google's share price has suffered in recent weeks - the stock has lost more than 6% this year - as investors questioned whether it could keep revenues growing as quickly as it has done in the past.

However, despite the concerns, Google's shares have performed remarkably well since it listed on the stock market and have doubled in value during the past 12 months.

On Friday, Google shares closed $1.56 higher at $390.

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