The popular Internet search engine raised $1.67 billion on Wednesday and saw its market value set at $23 billion - a six-year-old enterprise worth more than Amazon.com Inc., with a market cap of $16 billion, and on par with General Motors Corp., at $23.7 billion.
"The good news for Google is that it didn't price below the low end," said Tom Taulli, co-founder of CurrentOfferings, an IPO research company. "If it had priced below the low end, maybe there could have been some selling pressure."
The share price was short of Google's original expectation of $108 to $135 a share. It also comes at the lowest end of Google's downward-revised range it made on Wednesday, when it also reduced the number of shares to be sold to 19.6 million from 25.7 million - a move that should buoy prices.
Now, the big question is where the stock moves once trading starts.
Google executives wanted to avoid a big opening-day run-up by using an unusual "Dutch auction" to determine a fair market price, but the fact that fewer shares are available than originally anticipated - and at a discount - could help drive the price higher. At the same time, its low initial price may indicate a lack of enthusiasm.
But others might see the shares as a good value at $85, Taulli said.
If the stock had priced at the high end of the original estimate, Google would have raised as much as $3.6 billion and given the company a market cap as high as $36 billion.
"When you finally cut through the hype, economic rationality wins out," said Bob Clarkson, a securities attorney at the Menlo Park-based Jones Day law firm who did underwriting work for many IPOs, including Yahoo Inc.'s. "Bidders who wanted to buy the stock have done a reasonably hard-nosed analysis and they say they like $85 better than $108 or $120."
John Tinker, an analyst at ThinkEquity Partners, said the initial price range was overvalued and he wasn't surprised about the lowered price range, citing how the auction process has been sloppy and complicated.
Some analysts think the lowered price affirms flaws in the auction process for initial public offerings.
The auction was supposed to democratize the IPO process, which is usually limited to investors connected to investment banks, but analysts questioned whether Google's projected price was affordable to average investors.
David Garrity, a technology analyst in New York at the Caris & Company investment bank, called the bidding process "a miserable failure."
Yet it appears at least two of Google's early investors, the powerful Silicon Valley venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital, might be betting they can get a better price at some point in the future.
Representatives at the two firms did not return phone calls for comment Wednesday after they withdrew their combined 4.5 million shares from the auction.
Many observers agree, however, that Google's coming-out party faced hurdles beyond its control, such as the rocky market conditions in recent weeks and other macroeconomic factors.
Mark Bettencourt, co-chair of the corporate finance and securities group at the law firm of Testa, Hurwitz & Thibeault LLP in Boston, said Google would have faced the same result if it had gone with the traditional IPO route.
"Google is just a symptom of a condition, which is still general skepticism, or a lack of enthusiasm for new issues," Bettencourt said.
Still, the offering eclipses most of the hot tech issues of the 1990s and will make billionaires - at least on paper - of founders Sergey Brin and Larry Page. Page collected $41.1 million and Brin got $40.9 million, but that pales in comparison to the more than $3 billion each still holds in Google shares.
Initially they planned to sell 1 million shares apiece.
Google has had a bumpy road to the IPO, including missteps that have sparked probes into possible securities violations.
In one case, Google said the Securities and Exchange Commission "has requested additional information concerning the publication" of an interview with Brin and Page that appeared in September's issue of Playboy magazine. That was a potential violation of the SEC's rules against talking publicly before an IPO about information that is not included in the prospectus.
Google also has disclosed that the agency has launched an informal inquiry into its issuance of millions of pre-IPO shares and options without registering them.
But few deny that Google is both very popular and prosperous.
Since it was founded in 1998, it has always been something of an oddball. Its search engine design has no flashy ads but a simple, quick-loading layout. Its search algorithm out-powers rivals. Its name became synonymous with Internet search.
The Mountain View-based company, which makes money by selling text advertising, managed to prosper as a private company even while other dot-coms were collapsing. Now, as the technology industry is just recovering, Google stands to prosper even more.
"With all the negative publicity in the last few weeks," Clarkson said, "it's still a phenomenal success story and that's still a phenomenal valuation for a company as young as Google."
By May Wong