Google's stock price topped $800 for the first time Tuesday amid renewed confidence in the company's ability to reap higher profits from its dominance of Internet search and prominence in the growing mobile market.
The milestone comes more than five years after Google's shares initially hit $700. Not long after breaking that barrier in October 2007, the economy collapsed into the worst slump since the Great Depression and Google's stock tumbled into a prolonged malaise that eventually led to a change in leadership.
Besides enriching Google's employees and other shareholders, the company's resurgent stock is an implicit endorsement of co-founder Larry Page. He replaced his managerial mentor, Eric Schmidt, as CEO in April 2011. Google's stock has risen by 36 percent since Page took over. By contrast, the benchmark Standard & Poor's 500 index has climbed by 15 percent over the same stretch.
Most of Google's gains have occurred in the past seven months — a period that has overlapped with a sharp downturn in the stock price of rival Apple. The iPhone maker's market value has plunged by about $230 billion, or 35 percent, since late September.
"All that Apple money had to go somewhere," said BGC Financial analyst Colin Gillis.
Google makes and distributes its free Android software to Samsung Electronics Co., HTC Corp. and other mobile device makers looking to compete with Apple's iPhone and iPad. Since its 2008 introduction, Android has established itself as the most popular mobile operating system, partly because the free software makes it easier for device makers to undercut Apple's prices for iPhones and iPads.
Android is set up to feature Google's search engine and other services, giving the company a chance to sell more ads.
Analysts who follow Google still see room for some modest gains. The stock's average price target among analysts surveyed by FactSet now stands at $834.40. Five of the 37 polled analysts are predicting Google's stock will surpass $900 within the next year.
"There are probably even going to be people talking whether Google's stock can get to $1,000," Standard & Poor's Capital IQ analyst Scott Kessler said. "Never underestimate the excitement that can be caused by a rising stock market and a rising security."
There is little dispute among analysts that Google appears well positioned for many years of prosperity for these reasons:
• Its Internet search engine remains the hub of the Web's biggest marketing network;
• Its YouTube video site has established itself as an increasingly attractive advertising vehicle and could broaden its reach as more people get Internet-connected televisions;
• Its Android software is running on more than 600 million smartphones and tablet computers, creating new advertising opportunities.
Google already dominates mobile advertising, with its U.S. revenue from that business expected to approach $4 billion this year, up 84 percent from nearly $2.2 billion in 2012, according to the research firm eMarketer. Google commands a 55 percent share of the mobile ad market, based on eMarketer's estimates. Google doesn't disclose how much of its $44 billion in annual worldwide ad revenue comes from mobile devices.
Perceptions have changed since Page became CEO. Under Page's leadership, Google has streamlined its decisionmaking and operations while closing dozens of its less popular services. It established its own toehold in social networking with the 2011 introduction of Google Plus.