Google Inc's stock price surpassed US$500 for the first time, marking another milestone in a rapid rise that has catapulted the Internet search leader into the corporate elite.
Continuing a recent surge driven by Wall Street's high expectations for the company, Google's shares on Tuesday rose US$14.60, or nearly 3 percent, to close at US$509.65 on the NASDAQ Stock Market.
That left Google with a market value of about US$156 billion just eight years after former Stanford University graduate students Larry Page and Sergey Brin started the business in a Silicon Valley garage.
The Mountain View-based company now ranks as Silicon Valley's second most valuable business, eclipsing the likes of Intel Corp, the world's largest computer chip maker, and Hewlett-Packard Co, a high-tech pioneer that also famously started in a garage 67 years ago. With a market value of about US$163 billion, networking equipment maker Cisco Systems Inc is the only Silicon Valley firm worth more.
Google's remarkable success has minted Page and Brin, both 33, as multibillionaires along with their hand-picked chief executive, Eric Schmidt.
Hundreds of other Google employees are millionaires because so many investors want to own a piece of a company that has become the Internet's most powerful financial force while building a brand so ingrained in society that it has become part of the English language.
It took slightly more than a year for Google's shares to travel from US$400 to US$500 -- the stock's longest journey from one major milestone to the next since the company priced its initial public offering at US$85 in August 2004.
The shares topped US$100 on their first day of trading on the NASDAQ Stock Market, then crossed US$200 in less than three months. The stock broke through US$300 another seven months later in June 2005 and then breached US$400 on Nov. 17 last year.
The latest spurt of optimism appeared to reflect a belief that Google will quickly introduce ways to mine more online advertising revenue from its just-completed US$1.65 billion acquisition of YouTube Inc. Google used its stock to finance the deal.
"Arguably, Google is positioning itself yet again to play in an emerging market that is going to be very significant," said David Garrity, director of research for Dinosaur Securities.
Like other Internet stocks, Google is also getting a seasonal lift in anticipation of more holiday shopping being done online. With a 45 percent share of the Internet search market in the US, Google is expected to direct much of the shopping traffic -- a role likely to generate more referral fees for the company.
Google so far has made most of its money selling brief, written ads that are posted alongside search results and other online content, but management believes it can amass even bigger profits by expanding into video and delivering more messages to mobile computing devices.
Management also wants to extend Google's advertising clout beyond the Web. The company is currently testing a program to place ads in 50 of the nation's largest newspapers and hopes to begin distributing radio ads by the end of this year.
"They have the opportunity to become a quasi-advertising agency," said Global Crown Capital analyst Martin Pyykkonen.
Those grand ambitions are one of the reasons that Google shares keep climbing. The run-up makes Google's stock look fairly expensive by one widely used barometer known as the price-to-earnings multiple.
Analysts, on average, predict Google will earn US$13.70 per share next year, leaving the company's price/earnings ratio at about 37. By comparison, the price/earnings ratio of Microsoft Corp -- the world's most prized technology company with a market value of nearly US$300 billion -- is about 21.
also see story:
Google navigates an offline course
BACK IN THE NEIGHBORHOOD: The planned transit by the ‘Baden-Wuerttemberg’ and the ‘Frankfurt am Main’ would be the German Navy’s first passage since 2002 Two German warships are set to pass through the Taiwan Strait in the middle of this month, becoming the first German naval vessels to do so in 22 years, Der Spiegel reported on Saturday. Reuters last month reported that the warships, the frigate Baden-Wuerttemberg and the replenishment ship Frankfurt am Main, were awaiting orders from Berlin to sail the Strait, prompting a rebuke to Germany from Beijing. Der Spiegel cited unspecified sources as saying Beijing would not be formally notified of the German ships’ passage to emphasize that Berlin views the trip as normal. The German Federal Ministry of Defense declined to comment. While
‘UPHOLDING PEACE’: Taiwan’s foreign minister thanked the US Congress for using a ‘creative and effective way’ to deter Chinese military aggression toward the nation The US House of Representatives on Monday passed the Taiwan Conflict Deterrence Act, aimed at deterring Chinese aggression toward Taiwan by threatening to publish information about Chinese Communist Party (CCP) officials’ “illicit” financial assets if Beijing were to attack. The act would also “restrict financial services for certain immediate family of such officials,” the text of the legislation says. The bill was introduced in January last year by US representatives French Hill and Brad Sherman. After remarks from several members, it passed unanimously. “If China chooses to attack the free people of Taiwan, [the bill] requires the Treasury secretary to publish the illicit
A senior US military official yesterday warned his Chinese counterpart against Beijing’s “dangerous” moves in the South China Sea during the first talks of their kind between the commanders. Washington and Beijing remain at odds on issues from trade to the status of Taiwan and China’s increasingly assertive approach in disputed maritime regions, but they have sought to re-establish regular military-to-military talks in a bid to prevent flashpoint disputes from spinning out of control. Samuel Paparo, commander of the US Indo-Pacific Command, and Wu Yanan (吳亞男), head of the People’s Liberation Army (PLA) Southern Theater Command, talked via videoconference. Paparo “underscored the importance
The US House of Representatives yesterday unanimously passed the Taiwan Conflict Deterrence Act, which aims to disincentivize Chinese aggression toward Taiwan by cutting Chinese leaders and their family members off from the US financial system if Beijing acts against Taiwan. The bipartisan bill, which would also publish the assets of top Chinese leaders, was cosponsored by Republican US Representative French Hill, Democratic US Representative Brad Sherman and seven others. If the US president determines that a threat against Taiwan exists, the bill would require the US Department of the Treasury to report to Congress on funds held by certain members of the
RSS