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Google Breaks 500 Dollar Mark

By: David Utter

Shares of the search advertising company eclipsed the $500 barrier in trading, finishing the day at 509.65 and placing Google third behind Microsoft and Cisco in terms of market cap.

Google Breaks 500 Dollar MarkWow. Those little text advertisements have added up to a market capitalization of over $150 billion for Google (GOOG). Among technology companies, only Microsoft and Cisco own higher caps, while firms like IBM and Yahoo! can just watch while Google continues to soar.

Naturally, fellow writer Jason Lee Miller has been celebrating this, as he and I have disagreed over where Google's price might go. He's bullish, I'm bearish (and neither of us own it directly, so it doesn't matter if Google hits $85 or $850 per share tomorrow.)

It's an impressive milestone in Google's meteoric rise on Wall Street. Even the boilerplate cautionary warnings about forward-looking statements in Google's SEC filings have been starting to look like suggestions that a chance exists the sun won't rise tomorrow.

Virtually all of the wealth that has enriched the company's founders and CEO comes from a revenue stream of 99 percent online advertising. A negligible amount comes from the search appliances Google sells to businesses that want to harness the power of Google for their internal usage.

It's almost difficult to classify Yahoo or Microsoft as competitors to Google. Neither are close to the online ad revenue Google generates. Microsoft has an advantage in diversity, namely its long-time cash generating operating system and productivity suite products, Windows and Office.

Compared to Google, the rest of the field simply does not possess the cachet the company has. Numerous outlets cover Google relentlessly when it releases a product, or even better reports its quarterly financials.

The good news could continue. CNBC's Jim Cramer said in a report on that Google should push past $600 and keep on going up to $750. That is based on the assumption that Ben Bernanke and the Federal Reserve choose to leave interest rates alone or even cut them. Hints of inflationary pressures could change this very rapidly.


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