Google, the most popular Internet search engine, has raised $1.67 billion (920 million pounds) in its long-awaited IPO after slashing the price and size of an offer beset by missteps and poor market conditions.

Google sold 19.6 million shares at $85 each, the bottom of a much reduced price range, making paper billionaires of its founders. Its shares, which will trade under the stock symbol GOOG, are expected to debut on the Nasdaq today.

The sale went ahead hours after Google slashed the size of its initial public offering nearly in half, splashing cold water on what had been touted as the hottest Internet IPO in years.

The IPO ranks as the fourth largest in the US this year, according to Dealogic, but easily would have been the year's largest at the mid-point of its initial pricing range.

The young, Mountain View, California-based company had initially expected to raise as much as $3.5 billion by selling shares for between $108 and $135 each in a Dutch auction.

On Wednesday, Google cut the range to between $85 and $95 a share, and also cut the number of shares on offer to 19.6 million from 25.7 million.

The IPO represents 7.2 per cent of the company's shares and values Google at $23.1 billion, well below the $38.7 billion market capitalisation of rival Yahoo.

Peter Schiff, CEO of Euro Pacific Capital, said the IPO's unconventional auction likely wiped out any chance investors could quickly flip their Google shares for a profit, since everyone who bid over the IPO price will get shares at the set price.

'There is no group of people who wants the stock and can't get it,' he said.

The pricing revision came as Google disclosed in an amended filing that the US Securities and Exchange Commission had requested additional information about a recent Playboy magazine article featuring an interview with Google's co-founders.

The interview, at a time when companies preparing for an IPO hold a 'quiet period', marked the latest hiccup for the unusual stock sale.

The IPO also bumped against a jittery market. Roughly 60 per cent of this month's IPOs have priced below their estimated range, according to Thomson Financial.

Market conditions were not only to blame. Many investors said Google's initial price range was overly optimistic in the first place, leaving them wary of investing.

Prior to the announcement of the deal's final terms, Christopher Baggini, who manages three funds with total assets of about $900 million at Gartmore Global Investments, said that even $85 to $95 per share was 'not necessarily low enough' for the IPO price.

Google also has disclosed that SEC staff intend to recommend the commission pursue civil penalties against the company's general counsel. Further, the SEC has begun an informal inquiry into Google's offer to buy back 23.2 million shares it may have issued illegally.

'The last thing you want when markets are fragile is a high-profile IPO running into difficulty,' said Michael Browne, a fund manager at Sofaer Global Fund in London.

Google reiterated today it does not believe its involvement in the Playboy article violated securities rules.

Stockholders more than halved the number of shares they sold in the IPO to 5.5 million after first planning to sell 11.6 million, according to a company filing yesterday.

Google founders Sergey Brin and Larry Page cut the number of shares they offered by almost half and will each reap more than $40 million from the deal. They retain stakes of 16 percent apiece worth $3.2 billion.

Chief executive Eric Schmidt, who had previously stood to gain as much as $99.6 million in the deal, will bring in just over $30 million.

Famed venture capital backers Sequoia Capital and Kleiner Perkins Caufield & Byers, each originally slated to part with more than two million Google shares, will now not be selling.

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