The big Internet IPOs have often been boom and bust scenarios: the underwriters fix a low price, millions of get-rich-quick merchants pile in, drive the price up, then sell out, after which the share price falls through the floor. Google's shares are going to be sold by auction, so the price inflation -- if any -- happens before the sale, and the extra cash goes straight into Google's coffers, not into speculators' pockets.
According to Investors.com, "In a Dutch auction, the issuer and the banker give up their discretion over pricing and allocation. The final IPO price is at least close to the highest price the market is willing to pay, rather than at a deflated pricing level that all but ensures no-risk gains for favored players. Companies that have gone public through the Dutch-auction scheme include Red Envelope (REDE), Overstock.com (OSTK), Salon.com, Ravenswood Winery, Briazz and Peet's Coffee (PEET), one of the top-performing IPOs over the last few years."
