Standard & Poor's has released several reports on the Google IPO (available here for purchase, $295 and up). The valuation report is summarized in the June 11 Businessweek.

S&P attempts to value Google, and comes up with a range of $33 billion to $40 billion. The model applies Yahoo's metrics ("14 times revenues, 21 times gross profit, and 46 times EBITDA") to Google's numbers, plus or minus 10%, to yield this range. (The Wall Street Journal warned against this "relative-valuation game" when it attempted to justify a $25 billion valuation.)

Interestingly, S&P "does not include consideration of enterprise value, net income, or EPS multiples, because we don't believe we can currently project with any certainty the company's 2004 net cash and investments, corporate tax rate, or outstanding diluted shares."

The report stresses that Google's numbers are very conservative -- they don't appear to be using aggressive accounting to make the business look better than it is: "... notable earnings quality reflecting the company's conservative revenue-recognition policy and expensing of stock options. In fact, we expect Google's divergence between operating earnings and S&P Core Earnings (as measured in percentage terms) to be among the lowest of the hundreds of technology companies we cover analytically."

(The same Businessweek issue also has an S&P survey of web search users and a cautionary look at Google's future. You can read these for yourself if you like, though I didn't find much new information here.)