Its name doesn’t have the same cachet as Facebook (Nasdaq: FB), there hasn’t been a feature film made about its founding and you may "like" it, and you may not, but Google Inc., the heavyweight search engine is back in the driver’s seat, occupying a spot it hasn’t held since the last recession began lo, those many years ago.
The organization that turned 14 just a few days ago, hit the $700 U.S. plateau last Friday for the first time since 2007, scraping a new 52-week high of $712.25. That's less than 5% below its all-time high of a little more than $747 U.S.
Unlike Facebook, which has seen its IPO fall from most radar screens since its debuted as a publicly-traded issue in May, Google shares have behaved of late more like the Tortoise in the ancient fable, and analysts are forecasting Google's earnings per share to jump 18% this year, and 16%, on average, over the next few years. At 16 times 2012 earnings forecasts, they say the stock is pretty fairly priced.
It’s not as though the company’s competitors haven’t thrown roadblocks in its way, consciously or otherwise. Apple's (Nasdaq: AAPL) big courtroom victory last month over Samsung could prove problematic since Samsung is the biggest Android user and if Apple continues to wage a war against Android, Google's acquisition of Motorola Mobility could wind up being a costly mistake.
In the days following Labor Day, Google's Motorola division unveiled three new smartphones that it claims will give Apple's iPhone 4S a run for its money. Simply put, Google likes to spend money and takes gambles that have in the past proven costly.
Second-quarter earnings fell short of Wall Street expectations when they came out in July. Still, Google earned $2.8 billion U.S., or $8.42 U.S. per share, during the three months ending in June. That compared with net income of $2.5 billion U.S, or $7.68 U.S. per share, last year.
The results included Google's $12.5-billion U.S. acquisition of cellphone maker Motorola Mobility Holdings for the first time. Google owned Motorola for the final 39 days of the quarter ending in June.
If investors were buying on the rumor, they were selling on the fact the following Monday. GOOG found its shares tumbling $5.03 U.S., or 0.7%, to $701.12 U.S., as the session rolled to a close.
