What Goes Around Comes Around: Google Stock Hits All-Time High

With all the talk of the latest iPhone and Apple's lawsuit win over Samsung as well as reports of Amazon's serial dominance over seemingly endless retail categories, Google has, of late, become the forgotten stepchild of tech. Sure, its presence on the screen was unavoidable, but it seemed to have entered the Bermuda Triangle of business media coverage.

Until the Monday after the iPhone 5's introductory weekend. When Google's stock price reached an all-time high.

The explanation appears to be one part Google and a few parts its competitors. Investor disillusionment with the social media darlings like Facebook, Groupon, Zynga et al has had two results. One is to cause investors to re-think the commercial potential of social. The other is to take another look at Google and others who quietly, efficiently and profitably provide essential services at less-than-astounding growth rates, but who have a certified business model that has and will continue to work for the immediate future.

Another factor is the dawning realization that Larry Page is a pretty good CEO. He learned a lot from Eric Schmidt, the 'adult supervision' brought in to help co-founder Sergey Brin and he grow the business. Page is now coming in to his own. He has made some subtle but important strategic changes. He has made some tough personnel decisions, like letting his former girlfriend and tech women's avatar Marissa Mayer go to Yahoo. The company's experimental glasses even appeared on the runway during New York fashion week. In short, this appears to be a business that knows what it is about. It remains the most sought-after and most difficult job to get for global university grads. It may never have gone anywhere, but it is back in the public and investor consciousness. JL

The Economic Times reports:

Google Inc shares set an all-time high on Monday, with the Web giant's reliable advertising business back in vogue among Wall Street investors disenchanted with younger social media companies. The stock reached $748.90 in afternoon trading, inching past a previous record set in November 2007 of $747.24. It traded below $300 in 2009 during the global economic crisis and remained under pressure in the ensuing years as investors worried that Google's best years were behind it. The world's No.1 search engine, which generated $38 billion in revenue last year, now looks increasingly attractive compared with a new crop of social Web companies, analysts say. Facebook Inc, as well as once-hot companies Zynga Inc and Groupon Inc, came to the public markets amid sky-high expectations during the past year, but have fallen out of favor on concerns about their future business prospects. "The markets have to come to appreciate that Google's been making money hand over fist all this time," said Brian Wieser, an analyst at Pivotal Research Group. Google's lucrative search advertising business, as well as its efforts expanding into display and mobile advertising, have helped the company maintain robust revenue growth. In contrast, Facebook faces much more uncertainty. "It's so new that there's a lack of data points for anyone to point to," Wieser said. AT THE HELM The stock was up almost 2 percent at $748.20 in early afternoon trade. It has surged roughly 27 percent since mid-July, compared with the Dow Jones Industrial Average's roughly 6 percent gain and a 9.5 percent rise on the Nasdaq. But at roughly 17 times expected 2012 earnings, it still trades at a hefty discount to Facebook's roughly 47 price-earnings multiple. Google's rising stock price comes about a year-and-a-half after co-founder Larry Page returned to the chief executive's role, replacing Eric Schmidt, who had the helm of the Web company for the previous decade. Page has moved aggressively to pare the company's sprawling portfolio of products, eliminating projects involving green energy and health among others, while stepping up Google's social networking efforts. But many of the challenges that pressured its stock in the past have not gone away. The company's ability to manage the $12.5 billion acquisition of Motorola Mobility -- Google's first major foray into the lower-margin hardware business -- remains unproven. And Google is now facing significant regulatory scrutiny around the world, including antitrust investigations in the United States and in Europe.