Champagne at the Googleplex: GOOG Above $600/share
Google gained 15.57 today to close at $609.62/share today, breaking the 600 point barrier for the first time. That puts the company's market cap at over $190 billion, and means Google is worth more on paper than companies like Wal-Mart …
Context & Ripple Effects
Two years after Business Week's Googling For Gold traced the ad-driven climb, the stock has barely paused: the Associated Press flagged a fresh high on September 21, 2007, and today's close at $609.62 takes Google through $600 for the first time, putting its market cap near $190 billion — more on paper than Wal-Mart. The milestone travelled fast, picked up the same day by GigaOM ('How High Can It Go?') and by Search Insider, which framed the sharper question: is the online ad industry partying like it's 1999?
The valuation peak lands in the middle of a deliberate expansion burst announced alongside it: YouTube videos will be syndicated to thousands of third-party sites with attached ads, Google and IBM are launching a joint cloud-computing research initiative with elite universities, Orkut is being revamped, and reports — unconfirmed — say engineers have worked in secret for over two years on a mobile phone project.
First-order effects
- Google's paper value now exceeds Wal-Mart's, handing the company an equity currency for hiring, retention, and deals that few firms in any sector can match.
- The same-day YouTube syndication plan ties the milestone to strategy rather than sentiment: pushing ad-attached video onto thousands of external sites extends the ad machine beyond Google's own search results.
Second-order effects
- The Google–IBM cloud initiative with universities converts valuation into long-horizon positioning — talent pipelines and large-scale computing credibility that other computing vendors must now decide whether to counter with programs of their own.
- Reports of a two-year-secret mobile project, still unconfirmed, put handset makers and carriers on notice that Google's next move may sit outside the browser, where they currently control the customer relationship.
Third-order effects
- If the pattern holds, industry gravity shifts toward companies that own both the advertising marketplace and the computing infrastructure beneath it — a structure in which ad profits underwrite infrastructure spending that pure infrastructure vendors struggle to fund.
- Search Insider's 'partying like 1999' framing previews the lens investors will apply: the higher ad-funded valuations climb, the harder the eventual reckoning questions about whether the economics justify them.
The trend: Online advertising is generating valuations large enough for a single company to self-fund computing infrastructure, media distribution, and hardware ambitions from its own equity.