Google shares soar, set to hit $600

Share prices in the world’s largest internet search engine exceeded $500 on Wall Street yesterday, making it the third largest technology firm in the US.
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During early trading yesterday Google’s share price rose by $9.21 to $504.26, which gave the internet giant a market value of $154 billion (£81 billion) – higher than Chevron, IBM and Intel. After hitting records of $510, the shares closed at $509.65. The rocketing price means Google is valued at 37 times its likely earnings for next year, when stock analysts predict the firm will soar past the $600 a share mark.

Google’s seemingly insatiable growth is mainly credited to its online advertising, while the firm has also benefited from the falling profits and a drop in advertising from Yahoo, its closest rival. Meanwhile, the Google’s top brass have ambitions to widen its advertising reach beyond the web – having recently signed a deal to become a newspaper advertising broker, and voicing an interest in the radio market.

The news follows Google’s controversial takeover of video sharing site YouTube for $1.65 billion. Around the time of the deal some were sceptical, claiming YouTube’s questionable legality was a copyright minefield waiting to happen. However experts say the firm is set to benefit from the purchase, placing it in the forefront of the emerging online video market and opening up a further lucrative web-based advertising sector.

"Arguably, Google is positioning itself yet again to play in an emerging market that is going to be very significant," David Garrity, director of research for Dinosaur Securities, told Reuters.

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