Google Shares Soar to Nine-Month High

Search giant Google continues to wow investors and investment professionals alike as the company's value continues to grow by leaps and bounds. As of last Friday, October 20, 2006, Google Inc's stock price surged to a nine-month high.

That day on the NASDAQ stock market, the company's shares closed at $459.67 US per share -- an increase of $33.61 US per share or 7.9 percent. The increase created over $10 billion US in shareholder wealth, which brought the 8-year-old Google's total market value to $143 billion US. (Source: mercurynews.com)

$600 for Google Stock?

Industry analysts are predicting that Google's stock prices will soon be worth somewhere around the $600 US range as Google continues to grow at a rapid pace. Google's stock prices haven't reached this height since the first half of January 2006. (Source: marketwatch.com)

Growth in Online Advertising

Much of Google's recent growth can be attributed to the significant advantage that the company holds over rivals Microsoft and Yahoo in the ever-growing online advertising market. Says Scott Devitt, Analyst at Stifel Nicolaus & Co., "We believe the company [Google] is rapidly becoming THE digital advertising agency for every company in the world ... If it succeeds, the financial returns could potentially be significant." (Source: mercurynews.com)

Google's revenue comes mainly from ad sales that are specifically tailored to user search results -- and analysts are expecting that its revenue will grow by 77 percent this year to $7.1 billion US. (Source: marketwatch.com)

Opportunities to Increase Revenues

Although Google is doing extraordinarily well financially, they may be only reaching the tip of the iceberg in terms of its moneymaking potential.

For example, the Google search engine currently only serves as the advertising medium for 300,000 to 400,000 online business websites. Rob Sanderson, an analyst with American Technology Research estimates that there are approximately 4.5 million online businesses -- therefore Google is only serving less than 10 percent of these enterprises -- which leaves lots of room for growth.

Other areas where Google could expand their advertising presence (and their revenues) include radio ads, print ads and online video advertising. (Source: mercurynews.com)