Google's highly successful IPO, using the Dutch auction model, bodes well for other IPO aspirants. However, it could also mean reduced opportunities for investment banks.

Google's IPO was hardly perfect. But it looks positively brilliant compared with the way Wall Street takes companies public.

When the venerable search engine giant, Google, announced its intention to go for its IPO based on the less used Dutch auction model many experts and investors doubted its success. However, the fact that Google gained 18% on the first day of its listing and now trades at $200, an increase of over 100% from its offer price, proves all the skeptics wrong. The success of Google's IPO also suggests that one could achieve the objective of reaching out to smaller investors more easily by bypassing the traditional intermediaries like investment banks and underwriters .

The search engine major's IPO decision from the very beginning was surrounded by controversies and criticisms. If the debate on its playboy interview and allegations of not reporting share allocation to its employees were not enough, the revised share price and the reduction in the number of shares on offer further fueled the criticism. Much of the criticism against Google's IPO was leveled by the people (read investment bankers) who feared losing hefty commissions and investment fees. Unlike the traditional IPO process where investment bankers and underwriters more often benefit themselves and their larger clients, the Dutch auction model doesn't allow that to happen.

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