Google Stock: $700 And Rising

Internet Search Giant Continues Upward Surge, Gaining 34% In Value Since Mid-September

(CBS/AP)  Google Inc's stock price barreled through $700 for the first time Wednesday, propelled by a belief that the Internet search leader will become even more profitable as it plants its products and services in new markets.

The Mountain View-based company's shares gained $12.23 to finish at a new peak of $707. It took less than a month for the stock to leap from $600 to $700, building upon a fervor that has lifted Google's market value by 34 percent since mid-September.

During that 6½-week stretch, Google has created an additional $55 billion in shareholder wealth. That dwarfs the total $42 billion market value of another Internet icon, Yahoo Inc., which had a 4-year head start on Google.

Through the first 10 months of this year, Google's stock has risen by 54 percent from 2006's closing price of $460.48. The Standard & Poor's 500 index, which includes Google, has gained 9 percent during the same period.

"Knowing what we know about Google's plans, it's hard for us not to see the stock getting to $1,000 within the next few years," Credit Suisse analyst Heath Terry told CBS' The Early Show.

The latest surge came after Google confirmed plans to become a bigger player in the Internet's social networking scene, which could morph into an advertising hotbed. Investors also seem enthused about reports that the company is about to unveil a long-rumored operating system designed for mobile phones so it can make more money by distributing ads to people on the go.

The recent rally has made Google Silicon Valley's most valuable publicly held company, supplanting Internet networking supplier Cisco Systems Inc.

"Google is worth more than Coca-Cola and McDonald's combined," David Vise, author of "The Google Story" told CBS News correspondent Maggie Rodriguez.

With a market value of nearly $220 billion, Google also is now worth more a long list of more-established businesses, including Warren Buffett's holding company, Berkshire Hathaway Inc., whose steadfast refusal to split its stock during the past four decades has left its Class A shares at $132,500.

Google co-founders Larry Page and Sergey Brin, who regard Buffett as an inspiration, have resisted requests to split their company's stock so more people could afford to buy a few shares. Their theory: a high stock price tends to attract more patient and knowledgeable investors who pay closer attention to a company's long-term strategy than its ability to hit short-term earnings targets.

The philosophy has generated impressive returns so far. A $10,000 investment in Google's stock at its August 2004 initial public offering price of $85 would now be worth about $83,000.

Brin and Page, both 34, have been the biggest winners by far, with estimated fortunes exceeding $20 billion apiece. At least two other Google executives, Chairman Eric Schmidt and sales chief Omid Kordestani, are billionaires while hundreds of other employees have become millionaires because of their stock holdings in the 9-year-old company.

Wall Street is betting Google is still in its financial infancy, even though it's already on track for a profit of about $5 billion this year on more than $15 billion in revenue.

Analysts are now trying to figure out just high Google's stock might rise in 2008. The average 12-month price target for the shares had stood at $739.23 among analysts polled by Thomson Financial, but that figure seems likely to rise in the next few days. Dinosaur Securities analyst David Garrity on Wednesday issued a bullish report predicting Google's stock will climb to $985 during the next year.

Google has made virtually all of its money so far by displaying text-based advertising links alongside search results and other Web content that includes topics related to the commercial message.

During the past year, Google has introduced new online advertising channels featuring video, graphics and other more compelling features while also extending its marketing machine into television, radio and print.

Terry says Google will continue making money because it's a magnet for advertisers.

"Roughly a third of people's time they spend around media is being spent online, he told The Early Show. "Only about 7 percent of advertising dollars are going online. The biggest beneficiary of that gap closing is Google."

Now, Google appears intent on shaking up the telecommunications industry by introducing inexpensive cell phones that will make it easier for people to use Google's search engine, maps, e-mail and other applications even when they don't have access to a personal computer.

If it pans out, the new Google phone presumably will give the company a chance to sell more mobile advertising and further boost its profits.

Google's relentless expansion beyond its core search engine underscores management's determination to reshape the business landscape, according to author Stephen Arnold, who has just released a 266-page study analyzing the company's patents and what they may portend for the future.

"I use the term 'Googzilla' to describe the current incarnation of Google," Arnold said. "This idea is that Googzilla is big, powerful, and indifferent to the insects and ants crushed by its massive paws."

[oldprophet]

Noticed prices are higher lately? So have I. Inflation, which increases the price of everything you buy, be it a dozen eggs at the store, or the price you pay for gas at the pump, is caused when The Federal Reserve, a group of private banks run by unelected officials, who are not accountable to we the people, lowers the interest rate, notwithstanding the fact that the Dollar has been undergoing a major devaluation overseas, instead of increasing the interest rate like it should have done. That''s Economics 101, folks. Everything costs more in U.S. Dollars, because the Dollar is worth less overseas. Because the Fed is allowed to print unbacked money out of thin air, and then loan it to the our government, which is then saddled with an interest obligation to pay it back, our money is becoming worth less and less each day, and our National debt to the Fed is approaching 10 trillion dollars. It gets worse. Most of our debt is owned by China (25%) and Saudi Arabia who buy our Treasury Bonds, which finances our runaway military spending overseas. This is a threat to our nation, folks. We need to stop this madness. We need to bring our troops home from overseas, and use the trillions we would then save thereby to reduce our debt, and to re-invigorate our currency. We can then use this money to ensure that Social Security and other essential programs will still be solvent in ten years. Vote for Ron Paul. He''s written entire books on the topic of sound economics. ronpaullibrary.org

[88798ppp]

hi people, i got googel for 361 long time ago. i have like 50 shaes. What do you people should sell now these days or wait for new highs? thanks

[incog-nito]

I''ll be waiting to short this one when the time comes. Google''s running on fumes. Just one piece of bad news will send it tumbling down.

[jon_mccain]

During that 6=-week stretch, Google has created an additional $55 billion in shareholder wealth. That dwarfs the total $42 billion market value of another Internet icon, Yahoo Inc., which had a 4-year head start on Google.

Remember the "good old days" when a company had to have a tangible product to sell?

[nolalou]

antoniof123 , What are you getting? Well if you were smart enough to invest in Google back when it was under $100 a share, and sold it now, you''d get a heck of a profit, that''s what!

[antoniof123]

They pay no dividends so the real question is what are you getting in the end?

[tnt1954]

bully for you. parable of lazarus and the rich
man dives. y''all remind me of huey long, every
man a king. and androids will do all the real
work, and we''ll all live happily forever after
in the castles in the air. just playing
the glass bead game invented by herman hesse.
we''ll all be very swiss. and neutral and just
invest. and our secret accounts will glow while
capital gains taxes are paid. while dividends
taxes are paid. etc. etc. is there life after
taxes? possibly. no problem, a 9 trillion dollar
debt? windfall profits tax on the stock market
when it goes to 0 and then up to 110% of opening
mark by the closing bell in one day. through
the tax, national debt is paid off, with plenty
left over to spend on world health plans. how
ingenious don''t you think?