Twenty years ago, as Morgan Stanley banker Michael Grimes was helping lead the public offering for the young company behind the Google search engine, one of the most anticipated IPOs of the decade, he was among the first people offered a new email service. He had his pick of any identifier he wanted, so he asked for michael@gmail.com.
Sergey Brin, Google’s co-founder, chimed in. Grimes remembers Brin telling him, “Oh no, you don’t want that. Gmail is going to be big. You’ll be spammed forever.”
Grimes told CNBC he does regret passing up the email address. But the IPO helped cement his reputation as “Wall Street’s Silicon Valley whisperer,” just as the tech industry began to reshape investing globally.
He calls the IPO of Google, which has increased by 7,600% over the last two decades, “momentous.”
The cumulative market value of companies Grimes has taken public is in the trillions of dollars. Some were more tumultuous, like Facebook‘s IPO in 2012, and some pioneered innovative new structures, like Spotify‘s direct listing in 2018. But Google’s was groundbreaking.
“It was the start of the next era,” Grimes said. “Google [and other megacaps that followed] changed the way that we work, live and play. They did it in bigger ways than we all thought and now these are trillion-dollar companies right up at the top.”
Now operating under parent Alphabet, the company is worth more than $2 trillion. No longer just search and advertising, the tech giant counts YouTube, Pixel smartphones, cloud computing, self-driving cars and generative artificial intelligence among its many business units. It’s a technology company so expansive that the Department of Justice may be looking to split it up.
Alphabet wasn’t immediately available to comment.
At the time of Google’s IPO 20 years ago, the tech industry was still reeling from the dot-com burst of the early 2000s and investors were cautious. Rather than going with a traditional offering, Google decided on a process called a Dutch auction, intended to democratize the IPO process by allowing a broader range of investors to participate.
The founders’ IPO letter began: “Google is not a conventional company. We do not intend to become one.” It also introduced Google’s “don’t be evil” philosophy.
Grimes said Brin and Larry Page wanted a level playing field for their IPO: “Their point of view was: Wait, if a young engineer sold some of her vested stock from Cisco or wherever and she wants to put $10,000 into Google, why should she get told she only gets $500 worth or none? Especially if she’s willing to pay one dollar more than the institution.”
“The auction allocations,” Grimes said, “would be determined by price and size. Not by who you are, and that was the fun. That was the fundamental breakthrough.”
Grimes added that some banks and institutions cautioned Google’s co-founders against the unusual process and told them it wasn’t the way things were done. But others, like his team, said they’d build with them.
Winning the coveted “left lead” on the IPO was and still is a competitive race. The Morgan Stanley team embraced the format, built a prototype and tested for a billion bids.
For the road show, they split into three different teams. Co-founders Brin and Page each led their own, and CEO Eric Schmidt led the third.
By most accounts, the IPO was successful. Google overcame a weak IPO market and an unproven offering model to generate a solid first-day return and a market capitalization of over $27 billion. From there, the stock kept appreciating.
But it would take more than a decade for the principles behind Google’s IPO to take off. Consumer technology brands like Facebook (now Meta), Twitter (now X) and LinkedIn (now owned by Microsoft) would go the traditional IPO route. But several of the high-profile listings between 2019 and 2021 did incorporate elements that aligned with Google’s democratizing intent. Airbnb offered hosts the opportunity to buy shares at the IPO price. Uber and Lyft made shares available to its drivers, and Robinhood gave customers access to its IPO.
Assessing the impact of Google’s “don’t be evil” credo — and how it’s aged — is more complicated. Grimes declined to reflect on the Google of today, saying he can’t talk about clients.
Google now stands accused of stifling innovation by U.S. and European regulators, and although the company is at the forefront of the generative AI platform shift, search and advertising — still its bread and butter — is facing its biggest existential threat in decades.
TikTok’s grip on the short-form video market is tightening, and the world’s biggest tech platforms are racing to catch up.
Since launching globally in 2016, ByteDance-owned TikTok has amassed over 1.12 billion monthly active users worldwide, according to Backlinko. American users spend an average of 108 minutes per day on the app, according to Apptoptia.
TikTok’s success has reshaped the social media landscape, forcing competitors like Meta and Google to pivot their strategies around short-form video. But so far, experts say that none have matched TikTok’s algorithmic precision.
“It is the center of the internet for young people,” said Jasmine Enberg, vice president and principal analyst at Emarketer. “It’s where they go for entertainment, news, trends, even shopping. TikTok sets the tone for everyone else.”
Platforms like Meta‘s Instagram Reels and Google’s YouTube Shorts have expanded aggressively, launching new features, creator tools and even considering separate apps just to compete. Microsoft-owned LinkedIn, traditionally a professional networking site, is the latest to experiment with TikTok-style feeds. But with TikTok continuing to evolve, adding features like e-commerce integrations and longer videos, the question remains whether rivals can keep up.
“I’m scrolling every single day. I doom scroll all the time,” said TikTok content creator Alyssa McKay.
But there may a dark side to this growth.
As short-form content consumption soars, experts warn about shrinking attention spans and rising mental-health concerns, particularly among younger users. Researchers like Dr. Yann Poncin, associate professor at the Child Study Center at Yale University, point to disrupted sleep patterns and increased anxiety levels tied to endless scrolling habits.
“Infinite scrolling and short-form video are designed to capture your attention in short bursts,” Dr. Poncin said. “In the past, entertainment was about taking you on a journey through a show or story. Now, it’s about locking you in for just a few seconds, just enough to feed you the next thing the algorithm knows you’ll like.”
Despite sky-high engagement, monetizing short videos remains an uphill battle. Unlike long-form YouTube content, where ads can be inserted throughout, short clips offer limited space for advertisers. Creators, too, are feeling the squeeze.
“It’s never been easier to go viral,” said Enberg. “But it’s never been harder to turn that virality into a sustainable business.”
Last year, TikTok generated an estimated $23.6 billion in ad revenues, according to Oberlo, but even with this growth, many creators still make just a few dollars per million views. YouTube Shorts pays roughly four cents per 1,000 views, which is less than its long-form counterpart. Meanwhile, Instagram has leaned into brand partnerships and emerging tools like “Trial Reels,” which allow creators to experiment with content by initially sharing videos only with non-followers, giving them a low-risk way to test new formats or ideas before deciding whether to share with their full audience. But Meta told CNBC that monetizing Reels remains a work in progress.
While lawmakers scrutinize TikTok’s Chinese ownership and explore potential bans, competitors see a window of opportunity. Meta and YouTube are poised to capture up to 50% of reallocated ad dollars if TikTok faces restrictions in the U.S., according to eMarketer.
Watch the video to understand how TikTok’s rise sparked a short form video race.
The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)
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Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.
The funding would value the company at over $120 billion, according to the report.
Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.
The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.
Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.
The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.
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Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.
“GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”
The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.
Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.
Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.
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Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.
During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.
Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.
Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.
Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.
“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.