Google IPO an Unlikely Lifeline for Technology

On the other hand, if he is wrong, "a successful deal should bring more [companies] out of the woodwork as far as issuers," Menlow acknowledged.

But one premise of Menlow's bleak outlook -- that all the buzz around Google is going to push institutional investors onto the sidelines -- may prove false. Despite recent news reports about many investors sitting this IPO out, attendance at recent roadshows and interviews with some institutional investors tell a different story.

A roadshow held by Google two weeks ago at the Waldorf Astoria in New York City attracted about 700 institutional investors, estimated Alan Loewenstein, co-portfolio manager of the John Hancock Technology Fund. "We talked to the lead underwriters -- Morgan and First Boston -- and we can make a bid like everybody else, which we do plan on doing," Loewenstein said.

He said he was undeterred by the rich price range, noting that it doesn't matter if his fund is trying to build a specific overall position. If a stock is $20 instead of $100, it just means buying five times as much at the lower price to build that position, he explained.

Another institutional investor, Transamerica Investment Management fund manager Chris Bonavico, who attended the roadshow at San Francisco's Four Seasons hotel last week, said he hasn't been turned off by Google's pricing guidance because he figures he can still bid lower.

"I do think the high end of the range is too high for my taste for the risk, and moving [the company's market value] $35 billion north takes an awful lot of free cash flow," said Bonavico, who estimated the San Francisco roadshow attracted about 200 people.

But "there is a price at which it becomes interesting because I believe Internet advertising, especially search-based advertising, is a very big market," Bonavico added, declining to comment on whether he will definitely submit a bid for Google shares. "I think just to say, 'Stay away, period. End of sentence,' is wrong."