With its stock price at more than $500, Google is worth more than $150 billion. How accurate is that figure compared to Google's assets? This exceeds Google's physical assets by 50x (its balance sheet shows assets at $10.2B). This is nose bleed territory and Google is clearly on a bubble.
Why doesn't Google split its stock, a common practice when a stock price gets into triple digits? Because they are trying to avoid high volatility. At $500 a share the investors in the game tend to be a little more measured and much more professional. At lower prices you drop into a higher percentage of traders who aren't experienced and jump at even the hint of bad news. Over the short term they could get a higher valuation by doing this, but long term, the bubble would be vastly more likely to break and once it broke would be unlikely to hit this high ever again.
Can the company maintain this stock price? They are clearly on a bubble and that fear is very real. They can't maintain this indefinitely but they are managing the process in a way that would suggest they can do it for an extended period of time. This is a high-risk property, but Google is demonstrating an expertise that, so far, has not resulted in a big correction.
Is this rapid rise in Google's stock price helping other Internet companies? Not as much as you might expect, but some. It certainly (is) resulting in venture funding being focused on creating Google competitors. With each new competitor, even if Google isn't put at much risk, the probability of a correction goes up.