Google ten years on

After it started trading ten years ago on 19 August 2004, where does Google stand now?

A Google sign
Source: Bloomberg

The initial public offer price of Google was $85, and on its first day of trading it closed some 18% higher at $100.34. The run up to the search engine company’s float on Nasdaq had not been without incident. The £1.2 billion raised from the placing of 19.6 million shares at $85, was well short of the initially hoped for 25.9 million shares priced between $108 and $135. The first day of trading saw the company valued at just over $27 billion, as opposed to the $36 billion it would have been valued at if the IPO price of $135 had been achieved. Of course, this is unlikely to worry management now as the current market cap is $391 billion.

Considering this inauspicious start the company can be content with the way it has grown in the ensuing decade. Additionally, very few companies get to see their name used as a verb by the public. To ‘Google’ something is now part of everyday terminology, and this has helped the tech giant maintain the dominant market share of 68% among online search engines. Google’s next largest competitor Bing only has an 18% market share.

Google is currently contending with an EU imposed ruling over ‘the right to be forgotten’. Although originally brought forward with the best intentions, the possible implications should ensure this is debated over for some time to come.

Google’s A shares have broken above the $600 level twice this year but on both occasions have fallen back, and this looks merely to be delaying the inevitable. Market expectations for Googles Q3 adjusted EPS is $6.541, an improvement on Q2’s $6.08. This, coupled with a pre-tax profit of $4.77 billion driven by $13.19 billion of sales, should see these levels challenged again. 

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