Google Twists Open Stock Spigot

In such a situation, most companies would take some of the money raised in an offering to buy back shares and shore up the stock price. But that would mean siphoning money away from investments in innovative technology and handing it to shareholders. And Google is notoriously cavalier about its stock price, especially when it distracts the company from organizing the world's information.

Of course, none of this diminishes the likelihood that the fourth quarter, historically the strongest for search revenue, will see Google's financials bounding back. But two things have always driven Google's stock higher: its phenomenal growth and its relatively scarce shares.

More and more, the scarcity factor will be having less of an impact. In that sense, Google is smart to conduct its secondary offering now; it's cashing in ahead of the excessive supply it's helping to create.

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