When a company issues stock to the public for the first time, it is called an initial public offering (IPO). There are many initial public offerings in any given year, but when Google, the popular Internet search engine company, went to market with its IPO in August 2004, it created a national sensation for two reasons. First, it was the largest IPO by an Internet company after the tech bust in 2001 and 2002. Second, Google provided a very well-known and widely used search service. Those who were fortunate enough to buy shares at $85 each saw the price per share soar to $135 in a few days and reach $700 in 2008. The price per share later dropped to below $300 but rose to almost $600 in early 2010. Google's Financial Highlights show the components of Google's stockholders' equity.

Googles Financial Highlights (in Thousands)
	Dec 31, 2009	Dec 31, 2008
Stockholderss Equity
Preferred Stock	$ -	$ -
Common Stock (0.0001 par value)	318	315
Additional paid-in capital	15816738	14450338
Retained earnings	20082078	13561630
Accumulated other comprehensive income	105090	226579
Total stockholders equity	$36,004,224	$28,238,862
Total assets	$40,496,778	$31,767,575

After reviewing the background information above, answer all of the following questions:

Why did Google's management choose to issue common stock to satisfy the company's need for new capital?

What are some of the advantages and disadvantages of this approach to financing a business?

What measures should investors use in evaluating management's performance?