Strange days indeed
Google Inc. shares skipped past $700 Wednesday amid investor enthusiasm for its wireless and social-networking initiatives, extending a run since mid-September that has made it one of the world's most valuable companies.
The Mountain View, Calif., Internet giant's $220 billion market capitalization as of Wednesday ranks fifth among U.S. companies, ahead of titans such as Bank of America Corp., Procter & Gamble Co. and Citigroup Inc. That's more than an eightfold increase since its August 2004 public offering, as the company has parlayed the small text ads it displays alongside Web-search results into a business whose revenue is expected to top $15 billion this year.
A Boston Globe article on Google this morning notes:
While it gets 99 percent of its sales from advertising, Google has made acquisitions and developed software to offer more products to advertisers.
The 99% part is the primary reason why I think Google will be trading for a lot less than $700 (assuming no splits etc.) in the not-too-distant future. That could change, e.g., if Google used its currently ~cheap money to buy something of more substance and sustainability.