Updated from July 21

As the Google IPO countdown winds to a close, it grows increasingly clear that time hasn't been on the company's side.

After months of hype, Wall Street expects the search-engine phenomenon to get on with its initial public offering in coming weeks. For many reasons, no one is certain what price the stock will fetch. But it's a good bet the number would have been higher had the IPO taken place a month or two ago, according to professional buy-siders who are mulling over possible bids.

In part that's because of the secrecy surrounding Google. But equally noteworthy has been the sharp reversal in the market's view of the outlook for Internet stocks.

After a robust first half of the year, these companies have seen their shares hit hard throughout July amid growing worries about valuations and competition. Investors grew skeptical after Yahoo!'s ( YHOO) less-than-scintillating second-quarter earnings report two weeks ago. But if anything, the Net sector's prospects look even dimmer after this week's earnings setbacks at Amazon ( AMZN) and eBay ( EBAY), which ignited a broad-based Nasdaq selloff Friday.

That's not to say the Google IPO will flop. There is still plenty of demand for the stock. But there's not as much excitement as there may have been a few months back, when the Net sector resurgence story was intact.

On Friday, Amazon and Yahoo! each fell 2% and eBay dropped 10%. All the stocks have lost at least 15% of their value during the July swoon.

Landmark IPO

To be sure, Google's unique circumstances -- its growth and profitability, its secretive nature, its popularity among the Internet populace and its idiosyncratic efforts at changing business practices on Wall Street -- are combining to build excitement behind what looks to be a landmark IPO.

But for all the hype, professional investors still have to figure out what price they're willing to pay for Google's shares. And because Google is setting the offering price via an auction, the job this time around will be even trickier than is usually the case.

Rather than assuming that, as in the case of past IPOs, underwriters will price Google's stock to improve the chances of a heartening first-day pop, buy-siders who might have dreamed in the past they would get an allotment of shares are at the mercy of a less fettered interaction of supply and demand -- one affected by such factors as remarkably large retail investor interest, a relatively limited float and no easy comparisons to be made to companies already trading.

And, in that context, investors are sorting out the pros and cons of a Google investment -- limited by, among other factors, some major blanks remaining in the company's offering documents, starting with how many shares the company and selling shareholders will be offering to the public.

"In general, I like to own the big names, even if it's small portions," says Darren Chervitz, research director of the ( JAMFX) Jacob Internet fund. "I would be inclined to add a company like Google," he adds, "but I certainly have my concerns."

Among the chief concerns, according to an investor who spoke on condition of anonymity, is growth in the pay-per-click search business that is the core of Google's revenue.

Surprising investors earlier this month, Google rival Yahoo! indicated that its paid search business was sequentially flat in the second quarter, after enjoying quarters of impressive sequential growth.

That sent shares lower not only for Yahoo!, but also for smaller players in the search category, namely Ask Jeeves ( ASKJ), FindWhat.com ( FWHT) and LookSmart ( LOOK). In fact, all the smaller Net players have now lost a quarter of their value this month.

And, says the buy-sider, it has likely been a negative for potential investors in Google, which has yet to disclose results for the second quarter ended June 30.

"If Google was public already, there'd be some serious concerns being raised," says the investor. Given Yahoo!'s numbers, it's more likely that Google will show 5%-10% sequential growth in the second quarter, says the investor, not the 15%-20% growth people might have expected, following the 27% sequential revenue growth in the first quarter.

Saying that Google is likely to put second-quarter numbers in the next amendment it files for its S-1 offering document, the investor observes, "Clearly, those numbers would be much more important than they might have been two weeks ago" -- that is, before Yahoo! announced its second-quarter results.

Eggs in One Basket

Addressing that Yahoo!-Google comparison, another investor -- also speaking on condition of anonymity -- says that while Yahoo! is an obvious choice to benchmark Google's value, Google suffers in one respect from the comparison. Yahoo!'s first quarter -- in which businesses such as branded online advertising, job listings and Internet access improved -- spotlights how Google isn't as protected by a business model that's diversified beyond the paid search business.

That puts pressure on Google to diversify, says the investor, and creates a scenario under which Google would be a serial acquirer of businesses, in turn putting further pressure on Google to maintain and grow its current business while integrating all these acquisitions. The investor says he doesn't own any Yahoo! shares.

Chervitz, also addressing the Yahoo!-Google benchmark, acknowledges that Google does have "incredibly loyal" users. But, he says, Yahoo! has a leg up on Google because Yahoo! has so much information about its users, ranging from registration information and credit card numbers on file. Google, by comparison, has a relatively anonymous user base, except for people who have signed up for its experimental Gmail email service. "You cannot just compare Google's search revenue with all the other things that Yahoo! has done to build its business," Chervitz says.

Operational comparisons with Yahoo! aside, these buy-siders are coming up with a variety of positive and negative factors they have to weigh in their assessment of Google.

A third anonymous investor says Google will clearly benefit from high barriers to entry into the paid search business. "There won't be any new startups in the business," the investor says.

Despite that, the investor's interest in bidding for Google is cooled by the heat of the market's excitement. "If it trades for less than 70 times earnings, I'd be surprised," the investor says. "The valuation is going to scare me away."

Flotation Device

A positive for Google, says one investor, is the limited float implied by Google's indication that it will be selling $2.7 billion of stock. That $2.7 billion of stock on the market is only a fraction of Yahoo!'s float, which is worth about $36 billion at current prices. "Limited liquidity is always a positive," says the investor.

But negatives include the controlling stake held by founders Sergey Brin and Larry Page, and the company's relative youth as a public company.

Other negatives relate to Google's founders' lack of interest -- justified or not -- in conducting business as usual on Wall Street. One investor notes that Google might not conduct the traditional pre-IPO road show for institutional investors. "I don't buy anything until I get to see the management team in person," says the investor.

Chervitz says he's not happy about Google's announcement that it doesn't plan to give earnings guidance "in the traditional sense."

"I wish that could be a good thing," he says. "Unfortunately, mutual fund investors are judged on a quarterly basis."

Had he ignored quarterly issues with, for example, now-defunct portal companies such as Excite and InfoSeek, says Chervitz, "I would have been left with nothing. ... It's not a field where you can ignore the short-term issues. It's technology. It's fast-moving."

Chervitz also confesses to mixed feelings about Google's philosophy of "Don't Be Evil."

"It's a cute business motto," he laughs, "but sometimes to expand a business, you have to be quasi-evil."

In the end, say investors, their interest in Google comes down to its price. "The odds of me participating," says one, depend on the "realism" that the market has regarding paid search.

And, fantasizes another investor, one can't rule out the possibility that Google will be priced like a brand-new Mercedes selling for $10,000 on eBay ( EBAY).

"I don't care if you want one or not," says the buy-sider. "You're going to buy it."