Google has set in motion its controversial auction-based initial public offering, opening the way for potential investors to register their interest in bidding for the shares.

The IPO could now be completed as early as next week.

However, the outcome of the auction has been complicated by the fact that many institutional investors are wary of taking part in the auction, and August is quiet in the stock market.

"I know they're trying to get the best price for their IPO - that's great for the company, but I'm not sure it's great for shareholders," said Mr Dan Niles, chief executive officer of Neuberger Berman, a technology investment firm owned by Lehman Brothers. "I'm not going to be buying it."

Google warned in its prospectus that, because the auction mechanism was designed to catch the highest possible price, there may be no investors willing to buy the stock at the market price once trading begins and the shares may fall.

Late on Friday the internet search engine company activated the website where anyone who wants to bid for the stock will have to register - www.ipo.google.com - was scheduled to stay open for one week.

After that, Google will collect bids through a network of 28 US banks and brokerage firms and use these to set a price and allocate its shares.

The unusual process has forced banks that participate to develop new information systems to collect and route the orders.

The extra costs entailed, along with the low fees Google is paying to the underwriters, has been one factor prompting Merrill Lynch and two other banks to back out of the process.

The auction is intended to make it easy for private investors to buy shares, with bidders allowed to buy as few as five shares each - worth $607.50, based on the middle of the indicated price range Google has published.