Search Leader Google takes Media Top Spot

Written by Administrator

Thursday, 09 June 2005

Internet search engine leader Google shares hit an all-time high on Wall Street on Tuesday to bring its value up to $80 billion. The share price closed at $293.12, a few cents off its peak but still well above the $250 quoted in the middle of last month. Google has leapfrogged a stack of long established and highly respected companies to become the world's most valuable media operator by stock market value. The previous leader was Time Warner valued at $78 billion. This comes against the comparison of turnover - Google's is less than 10 percent of that of the old timer - $3.2 billion compared with $42 billion. It now dwarfs more traditional media companies such as Viacom and Walt Disney, which have stock market capitalisations of between $54 and $55 billion. Some analysts are now suggesting that the valuation is unrealistic and that Google's shares are somewhat overpriced. They're even talking of a rerun of the valuations seen during the internet boom of the late 1990s. Others are saying that Google stock could get to $325 - $350, prices to reflect future earnings potential. All this has happened in just ten months - Google was floated as a public company just last August with an opening price of $85 per share. The bulk of Google's income is from the sale of advertising on its main search engine page.

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