Google originally planned to price their IPO using a kind of bastardized hybrid Dutch auction process but their timing was unlucky - the market dropped significantly between the time they announced their IPO to the day they actually floated, with Internet stocks performing worst of all (the NASDAQ Composite dropped 8%; Amazon dropped 15%). They ultimately bowed to pressure from the lead underwriters (I was working for Morgan Stanley at the time, so I remember it well) and agreed to reduce the price to a point that would guarantee a first-day pop[1]. It's generally accepted that it was underpriced[2].
Facebook actually did okay. The underwriters had to step in to support the stock price after the IPO, which actually implies that it was over-priced. Somewhat embarrassing for the underwriters but great for Facebook!
There were a spate of companies that did actually use the Dutch auction process around the Dot-com boom (e.g. Overstock) but it wasn't popular with institutional investors[3].
If you're interested in the topic, I'd recommend Information Markets by William J. Wilhelm Jr. and Joseph D. Dowling (Harvard Business School Press, 2001).
Facebook actually did okay. The underwriters had to step in to support the stock price after the IPO, which actually implies that it was over-priced. Somewhat embarrassing for the underwriters but great for Facebook!
There were a spate of companies that did actually use the Dutch auction process around the Dot-com boom (e.g. Overstock) but it wasn't popular with institutional investors[3].
If you're interested in the topic, I'd recommend Information Markets by William J. Wilhelm Jr. and Joseph D. Dowling (Harvard Business School Press, 2001).
1: http://news.cnet.com/Google-slashes-IPO-price/2100-1024_3-53...
2: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ayLEX...
3: http://www.wsj.com/articles/SB1028063270104806040