SAN JOSE, Calif. (AP) -Initial shares of Google Inc. were priced late Wednesday at $85, the low end of a range revised downward just hours earlier, somewhat dampening expectations for the most ballyhooed Internet company public stock offering since the dot-com boom went bust.

Still, the offering remains one of the biggest and most highly anticipated for an Internet company, surpassing most of the hot issues of the dot-com boom.

The final initial public offering price, set through an unusual auction involving would-be investors, means the stock could debut on the Nasdaq Stock Market as early as today.

Earlier Wednesday, Google dramatically lowered its estimated per-share price range to between $85 and $95, down from the previous range of $108 to $135. In a move that should buoy prices, it reduced the number of shares to be sold to 19.6 million from 25.7 million.

At the final price, the offering will raise $1.67 billion and give the world’s most popular search engine a market capitalization of $23.1 billion. If the stock had debuted at the high end of the original estimate, it would have raised as much as $3.6 billion and given Google a market cap as high as $36 billion.

In an e-mail to investors who bid an unusual auction that set the price, Google said individual brokerages will notify investors of how many shares they will be obligated to purchase at settlement, which is expected to be on Aug. 24.

Still, analysts expected the stock to start trading Thursday.

“Typically, most deals start trading the morning after the SEC gives the greenlight,” said Bob Clarkson, a securities attorney at the Jones Day law firm in Menlo Park, Calif.

The bumpy IPO process has created several clouds over the company that has been criticized for being too idealistic, arrogant and reckless since it began the IPO process four months ago.

Its prospectus indicates that Google still faces regulatory questions. In one case, it said the SEC “has requested additional information concerning the publication” of an interview of Google founders Sergey Brin and Larry Page that appeared in September’s issue of Playboy magazine. That was a potential violation of the SEC’s rules against talking publicly before an IPO about information that is not included in the prospectus.

Google also has admitted that the agency has launched an informal inquiry into its issuance of millions of pre-IPO shares and options without registering them.

The auction – another source of controversy – was supposed to democratize the IPO process, which is usually limited to investors connected to investment banks. Still, many analysts questioned whether Google’s projected price was affordable to average investors.

Before the downgrade early Wednesday, also announced in an e-mail to potential investors, some observers had questioned whether Google’s triple-digit price estimate was realistic, given the rocky stock market conditions in recent weeks. Several companies have delayed or abandoned plans to go public.

But Google, until Wednesday, surprised many by bucking the market trends for so long. In fact, it’s repeatedly been a source of surprises since it announced its public stock offering in April.

It eschewed Wall Street tradition and decided that the final IPO price would be set by an auction. Its founders wrote an idealistic letter in its prospectus, outlining the company’s “Don’t Be Evil” mantra and plan to avoid the trappings of traditional companies.

Google also has been embroiled in controversies. It revealed that millions of its pre-IPO shares and options were issued to employees and contractors without being registered, prompting a SEC inquiry.

John Tinker, an analyst at ThinkEquity Partners, said the initial price range was overvalued and he wasn’t surprised about the lowered price range, citing how the auction process has been sloppy and complicated, and further exasperated by Google’s Playboy interview.

“The stock market has also been off, and Google has got to be affected by that,” he said.

Despite the missteps, few deny that Google is both very popular and prosperous.

Since it was founded in 1998 by Stanford University students Page and Brin, it has always been something of an oddball. Its design has no flashy ads but a simple, quick-loading layout. Its search algorithm out-powers rivals. Its name became synonymous with Internet search.

The Mountain View-based company, which makes money by selling unintrusive text advertising, managed to prosper as a private company even while other dot-coms were collapsing. Now, as the technology industry is just recovering, Google stands to prosper even more.

In the second quarter of this year, for instance, Google earned $79.1 million, more than double the $32.2 million earned in the same period last year. Sales also more than doubled, to $700 million in the latest period.

Page, Brin, employees and other early investors stand to profit handsomely in the IPO – even with a lower anticipated range.

According to Wednesday’s filing, the co-founders will each offer about 480,000 shares, which will be worth $43.2 million based on a final IPO price of $90, the midpoint of the new range. Initially they planned to sell 1 million shares apiece. They each will hold enough other shares to make them billionaires, at least on paper, if the IPO is successful.

Venture capitalists won’t be offering any of their shares initially, canceling major payouts. Google board member John Doerr of Kleiner Perkins Caufield & Byers was to have sold 2.1 million of his 21 million shares; Michael Moritz, another board member and a partner at Sequoia Capital, was to shed 2.4 million of his 23.9 million shares.

But Yahoo Inc. and America Online Inc., which were early investors in Google, still plan to sell. Yahoo, now one of Google’s biggest rivals, is selling 1,610,758 shares; AOL will unload 743,745, according to the filing. At $90 per share, Yahoo would collect $145 million, while AOL, part of Time Warner Inc., would reap $66.9 million.

According to Google’s e-mail, pre-IPO shareholders expect to sell 5.5 million shares, less than half the 11.6 million originally planned. The company itself will sell 14.1 million shares, which is unchanged from previous filings.

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On the Net:

Google IPO site: http://www.ipo.google.com

AP-ES-08-18-04 2134EDT