Lost amid the hoopla over the announcement of HTC’s latest flagship device today was a pretty big milestone for Google. For the first time in the company’s history the search giant’s stock topped $800, actually closing Tuesday at $806.85. This appears to be the product of renewed confidence in the profitability in both their internet search engine as well as the Android operating system.
This spike in the stock price coincides nicely with a change at the top of the food chain over at Mountain View. Since Google co-founder Larry Page replaced Eric Schmidt as CEO, Google’s stock has risen by 36 percent, very impressive since the Standard and Poor’s benchmark in the same time frame was 15 percent.
Not surprising in all this is that in the past seven months Google’s rise has come at the expense of Apple, a company whose own stock has taken a 35 percent hit since last September. “All that Apple money had to go somewhere,” said BGC Financial analyst Colin Gillis. Don’t go digging Apple’s grave just yet though, they are still the most valuable company in the country with a net worth of $432 billion. Google currently sits in the number three slot with a value of $402 billion.
The fact that the Android OS is one of the driving forces behind this surge shouldn’t come as a surprise to the readers here. Not only is it a feeder system into Google’s other services, Android is also distributed freely and it’s wide open to customization. That means that since it can be put just about anything, the prices of devices can severely undercut anything Apple has to offer. This is why Android is the dominant mobile operating system around the globe.
Looking at the future prospects of Google’s stock has analysts predicting everything from modest gains to surpassing $900 or more. Standard & Poor’s Capital IQ analyst Scott Kessler had this to say: “There are probably even going to be people talking whether Google’s stock can get to $1,000. Never underestimate the excitement that can be caused by a rising stock market and a rising security.”
While today’s $800 mark is symbolic it does say something about the direction of the company as a whole. Google is reaching it’s tentacles into more and more venues, and as they do they bring in the ad revenue that other companies can only dream of.