Google hits $500 a pop

Author: Wil Harris
Published: 22nd November 2006
Comments (15) Stumble
Google's share price is now up beyond $500 and rising.

Google's share price is now up beyond $500 and rising.

Google's share price finally hit the $500 mark yesterday, confounding the sceptics who said that it would never get much further than its initial offering price of $85.

The $509.65 price that the market closed at yesterday means that the search giant now has a market value of $156bn. That makes it more valuable than Intel, Hewlett Packard and even Coca Cola. All this for a company started just eight years ago.

Return on investment for intial share buyers has been just under 500% in just two years, which is clearly a spectacular win for early investors.

The speculation is - where now? Can Google continue its insane pace of growth and continue to see its share price go up? Some investors are predicting that shares could hit $600 within a year, but the company's AdSense revenue in the US has only grown 4% over the last quarter, with most of the economic growth coming internationally.

Google has recently tied up deals with major newspaper publishers to provide advertising to them, as well as paying almost $900m for the exclusive rights to advertise on MySpace.

Can Google keep growing? What do you think are the threats to the search giant? Let us know your thoughts over in the forums.
Quote DougEdey 22nd November 2006, 10:33
Whats the value of Microsoft?
Quote TheEclypse 22nd November 2006, 10:43
Quote:
What do you think are the threats to the search giant?

A plugin to firefox which hides googleads :D
Quote Herbicide 22nd November 2006, 10:50
Quote:
Originally Posted by DougEdey
Whats the value of Microsoft?
$29.92?

- H.
Quote DougEdey 22nd November 2006, 11:07
Overall company value I mean, I know the share price is low, but its around the same as Intels.
Quote <A88> 22nd November 2006, 11:38
Not sure about its value, but Microsoft's net income is nearly 10x that of Google. I think most of Google's growth is just stemming from expectations that they'll move on to dominate other areas as well, so whilst they might have seemingly endless money at their disposal, the only way the shareholders are going to see long-term profit is if Google starts to really break out and become more than just an internet applications developer.

<A88>
Quote riggs 22nd November 2006, 12:14
Yeah, I saw this in todays FT - that's a massive increase over the past few years. I wish I invested
Quote ChromeX 22nd November 2006, 14:06
How the hell does a search engine become much more valuable than than Intel, Hewlett Packard and Coke?! Sure, they have a few ads on site's and stuff but not enough to justify a $500 share price!
Quote DXR_13KE 22nd November 2006, 18:39
bigger than Coke..... HOLLY CRAB!!!!!
GOOGLE IS HUGE!!!!!!!
Quote cpemma 22nd November 2006, 19:34
Quote:
Originally Posted by DougEdey
Whats the value of Microsoft?
Code:
	
20 Largest US Companies By Market Capitalization
as of close on 11/17/06
Company             Market Cap      
                  ($ in billions)

Exxon Mobil           426.24

General Electric      374.22

Microsoft Corp.       289.02

Citigroup             251.15

Bank of America       246.31

Procter & Gamble      202.36

Wal-Mart Stores       198.03

Pfizer Inc.           196.2

Johnson & Johnson     194.95

American Int'l Group  187.24

Altria                177.96

JPMorgan Chase        165.45

Berkshire Hathaway    164.69

Cisco Systems         163.47

Google                152.71

Chevron               150.64

IBM                   141.31

AT&T                  127.58

Intel Corp.           127.47

Wells Fargo           122.45
But if you'd bought MS shares 5 years ago you'd have lost money.
Quote Cthippo 22nd November 2006, 21:18
Quote:
Originally Posted by ChromeX
How the hell does a search engine become much more valuable than than Intel, Hewlett Packard and Coke?! Sure, they have a few ads on site's and stuff but not enough to justify a $500 share price!

The same way that Amazon, which has only now become profitable has a larger value than most companies. Same way AOL could buy one of the largest media companies a few years ago. In the modern stock market the value of a company is not what it makes, but what people think it will be worth down the road.
Quote mattthegamer463 22nd November 2006, 21:41
Threats to Google? Owning the world will slow their stock value increase substantially.
Quote Aankhen 22nd November 2006, 22:32
All I have to say is: that's crazy.
Quote Cthippo 22nd November 2006, 23:40
Quote:
Originally Posted by Aankhen
All I have to say is: that's crazy.

Not so much. Google has made a decision not to split their stock to keep in more affordable as the company's value has grown. Most compies will split their stock to keep the price in the mainstream range ($50-150 or so). MS stock used to split every 6 months pretty regularly. Not sure what the reason for this move by Google is, but knowing them I'll give them the benefit of the doubt.
Quote Aankhen 23rd November 2006, 17:09
Quote:
Originally Posted by Cthippo
Not so much. Google has made a decision not to split their stock to keep in more affordable as the company's value has grown.
Well, I was mostly saying it's crazy that Google is as valuable or more valuable than Intel, HP and Coke. :)
Quote sinizterguy 24th November 2006, 09:25
I knew I should have bought the damn shares when they were $350 each.
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