Marketplace Scratch Pad

Kicking yourself over Google?

Scott Jagow Aug 19, 2009

It was 5 years ago today that Google went public with an IPO at $85 a share. At the time, some people scoffed at the price. Today, Google is trading around $445 dollars a share, a 420% return. The NASDAQ’s gain during that time is 8%.

From the New York Times:

When the offering finally did happen, it turned an estimated 1,000 Google employees into millionaires, at least on paper. Since then, many more millionaires have been minted inside the Googleplex, the Web search company’s headquarters in Mountain View, Calif…

“I’m not buying,” Stephen Wozniak, an Apple co-founder, declared to The New York Times in the weeks before Google went public. “Past experience leaves the taste that a few people — never ourselves — will make out the first day, but that it’s not likely to appreciate a lot in the near future or maybe even the long future,” he said.

But of course Google soared. It hit its current peak in early November, 2007: $747, a gain of 779% from August 19, 2004.

Still, Seeking Alpha has a list of 38 stocks that have increased more percentage-wise than Google in the past five years, and one of them is Apple!

One take, from CNNMoney, on why Google has been so successful:

Google has also remained relatively focused its core search business, resisting the temptation to go overboard in the glitzy, but not all that profitable, social networking business. And that’s a good thing.

News Corp-owned MySpace and Silicon Valley darlings Facebook and Twitter have all generated a googol of hype but none has figured out a way to make gobs of money from their users as Google has.

Of course, remaining on top in a business as dynamic as technology is not easy. Online pioneer AOL, which is set to soon split from my parent company Time Warner, is now a distant also ran in the world of Internet advertising. (Although it will be interesting to see if former Google sales guru Tim Armstrong, who is now running AOL, can turn that company around.)

So Google is probably too busy trying to figure out how to stay ahead of the competition to look back.

And a reality check from CNBC:

Advertising dollars still make up 95 percent of Google’s revenue and it is still in decline. Microsoft’s new Bing search engine is beginning to gain traction in the marketplace. Microsoft finally has inked a partnership with Yahoo. Google is entering new markets, which is good, but those markets — including mobile and PCs, are dominated by smart, slick, and infinitely capable competitors like Apple , Research in Motion and Microsoft. Go big or go home, I guess.

The next five years should be interesting. I wouldn’t mind having a few of those $85 chips in my pocket about now, though.

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