Google Lowers Price Range

Updated from 8:48 a.m. EDT

Hype isn't helping Google.

The search-engine giant, whose increasingly star-crossed IPO was expected to be sold to the public as early as Wednesday, instead slashed the deal's expected price range and halved the number of shares being offered by existing shareholders. The new parameters suggest Google is worth around $26 billion, not the $36 billion it was originally expected to command.

The development, announced early Wednesday in a Securities and Exchange Commission filing, confirms rumors that have been buzzing around Wall Street for days: that demand for the IPO is slack, and that the company's unconventional Dutch auction distribution system is complicating efforts to sell it.

The action also reflects the brutal market for technology stocks, particularly new ones. Since Google registered the offering with the SEC in late April, the Nasdaq Composite is down close to 10%, and a handful of IPOs have been delayed or withdrawn.

According to Wednesday's filing, the IPO's selling shareholders, a category that consists of ground-floor investors looking to cash out their stakes, will sell only 5.5 million shares in the deal, down from an originally planned 11.6 million. The new price range is $85 to $95 a share, not the $108 to $135 a share that was initially pegged.

The company itself still hopes to sell a little more than 14 million shares in the deal. If all the shares are sold in the new range, Google and its backers will raise about $1.9 billion, not the $3.6 billion they had originally expected.

Google also disclosed in the filing that the SEC wants more information on the interview that founders Sergey Brin and Larry Page gave Playboy in April. The company conceded in a previous filing that the article conceivably could represent a violation of federal "quiet period" rules that govern pre-IPO promotion, although it said at the time -- and continues to maintain -- that the interview was kosher.