Google to borrow $3 billion in Bond offer

Google, a company with $36.6 billion in cash stuffed under its mattress, is about to offer up 3 billion dollars worth of Bonds. This offering is a first for the company and is also a bit curious, considering how much money they actually have at their disposal.

According to the SEC (via Business Insider), Google plans to use the cash to "repay outstanding commercial paper and for general corporate purposes." Money is relatively cheap to borrow at this point in time because of a low dollar valuation and low interest rates.

While it could be possible that Google is gearing up to purchase another company, Google has plenty of cash in its bank accounts to purchase nearly any company and would not need the additional capital. At this time, it is safe to assume that Google is using the cheap capital for corporate housekeeping and possible stock repurchase. 

Google has been facing new fronts from Microsoft as the company looks to diminish Google's power in the search arena. Microsoft recently announced a mobile search deal with RIM and is also attacking Android with a massive announcement of the Nokia/WP7 deal.

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17 Comments

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THis is common, many companies take out loans when they don't need to to bankroll projects and acquisitions. It's less riskier to take on a relatively low interest loan (small amounts of debt comparatively) than to tap into your cash reserves for a potentially risky project. If the loan turns out to not pay dividends and the project fails, I'm sure their accountants and finance guys can work out a way to make them still come out ahead with financial trickery and tax tricks.

As far as toolbars and add-ins, Google uses the same tactic. Google is default search engine in a number of desktop and phone apps and the firefox browser. The google toolbar is checked by default on a number of free plugins and downloads including most of Adobe's free products and numerous shareware apps. (Reason: Google pays per toolbar installed to partners.) So this is an easy revenue stream for partners and an easy way for Google to secure and maintain its market share. A Win win so to speak and despite the improvements and in-roads of Microsoft's Bing through its' various partnerships, Google still has much more mindshare with the general public where some immediately dismiss anything related to search that does not say Google. People say 'Google it', I've yet to hear anyone say 'Bing it' so Microsoft needs to continue with pushing their search platform in every avenue they can.

Microsoft is getting desperate now. I recently downloaded the Direct X end user runtime for XP, and lo and behold, it has an install bing toolbar section in the installer. Not only that, but it's ticked by default, hoping that users wont catch it.

I understand third party programs doing such things, but Microsoft, the creator of the OS, resorting to deceptive tactics to install privacy invading addons in order that it might steal more of Google's search results? LOL. I have to wonder, will MS include the bing toolbar in future versions of Windows by default so it can track and catalogue everything we do?

Flawed said,
Microsoft is getting desperate now. I recently downloaded the Direct X end user runtime for XP, and lo and behold, it has an install bing toolbar section in the installer. Not only that, but it's ticked by default, hoping that users wont catch it.

I understand third party programs doing such things, but Microsoft, the creator of the OS, resorting to deceptive tactics to install privacy invading addons in order that it might steal more of Google's search results? LOL. I have to wonder, will MS include the bing toolbar in future versions of Windows by default so it can track and catalogue everything we do?


It's actually already included in Dell PCs as any others that come with Office installed via the OEM OPK. Microsoft requires that several things are installed on the PC in order to provide OEM Office preinstalled. Bing toolbar being one of those things.

Flawed said,
Microsoft is getting desperate now. I recently downloaded the Direct X end user runtime for XP, and lo and behold, it has an install bing toolbar section in the installer. Not only that, but it's ticked by default, hoping that users wont catch it.

I understand third party programs doing such things, but Microsoft, the creator of the OS, resorting to deceptive tactics to install privacy invading addons in order that it might steal more of Google's search results? LOL. I have to wonder, will MS include the bing toolbar in future versions of Windows by default so it can track and catalogue everything we do?

They must have learn't that from their search partner Yahoo.....They have so many downloadable extras whenever you install something of theirs.....

if you dont pay attention instead of installing one thing you wind up with 5 or 6 lol

Flawed said,
Microsoft is getting desperate now. I recently downloaded the Direct X end user runtime for XP, and lo and behold, it has an install bing toolbar section in the installer. Not only that, but it's ticked by default, hoping that users wont catch it.

I understand third party programs doing such things, but Microsoft, the creator of the OS, resorting to deceptive tactics to install privacy invading addons in order that it might steal more of Google's search results? LOL. I have to wonder, will MS include the bing toolbar in future versions of Windows by default so it can track and catalogue everything we do?


what about the Google toolbar that comes with almost EVERY product?
I used to click through setups of software i knew without really looking, stopped doing so after i kept finding google's crapware that comes with almost every program nowadays.

They're borrowing money with low interest instead of spending 3 billion out of pocket. It's a savy business move that will probably allow them to access some tax benefits and make them money in the long run.

rx-182 said,
Uhhh. More debt = less corporate tax. That's why almost all companies have debt outstanding...

interesting

rx-182 said,
Uhhh. More debt = less corporate tax. That's why almost all companies have debt outstanding...

Uhh, you can't write off the entire debt. Only the yield paid out to investors.

You mean google is finally having to operate like every other business? who woulda thunk it! Their stock is still way over valued btw..

blahism said,
You mean google is finally having to operate like every other business? who woulda thunk it! Their stock is still way over valued btw..

They don't have to, it's more of an "investment" than anything else, or did you purposely ignore the part where they have $36b in the bank gathering interest.