The search engine giant debuted on Aug. 19, 2004 at $85 a share. Today, the stock trades at about $445. That's a nearly 420% return during a time when the Nasdaq is up only 8%. And shares of top rival Yahoo! have been nearly cut in half during the past five years.
Yet, it doesn't look like all those Googleaires are too interested in celebrating their 5-year anniversary as a public company. Check out the Google (
GOOG,
Fortune 500) homepage and you don't see one of its usually witty cartoon renditions of the logo like you do on other "holidays."
I was hoping it would look like a tree carving or maybe a set of spoons, forks and knives since wood and silverware are the traditional five-year wedding anniversary gifts. (And yes, I Googled "wedding anniversary gifts" to find this out.)
Nonetheless, it's been an interesting five years for the search giant to say the least.
The company has used its strong stock price and mountain of cash reserves as currency to scoop up the likes of YouTube, DoubleClick and Postini to name a few.
It has watched Yahoo! (
YHOO,
Fortune 500) try (and fail) repeatedly to gain more market share in the lucrative world of search. It's weathered numerous challenges by Microsoft (
MSFT,
Fortune 500) to do the same. And it's continued to be innovative, rolling out a slew of products such as Gmail, Google Maps and Google Docs.
All the while, 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. (
NWS,
Fortune 500)-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 (
TWX,
Fortune 500), 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.
According to the most recent online search rankings from comScore, Microsoft did gain ground against Google in July. But its market share of 8.9% pales in comparison to Google's whopping 64.7%. And even if you add Yahoo's market share to Microsoft's, they have a combined share of just 28.2%
Steve Weinstein, an analyst with Pacific Crest Securities, said that the Microsoft-Yahoo alliance bears watching. But he believes that Google shouldn't be that worried. In fact, he thinks Google could take advantage of any turmoil that takes place while Microsoft and Yahoo! join forces.
"Google is still in a very strong position in search and they should continue to gain market share in the U.S.," he said. The Yahoo-Bing partnership will take a couple of years to implement, so there is plenty of risk of disruption for them during that time."
Still, Google's growth has slowed in recent years. Sure, part of that is simply the so-called law of large numbers, i.e. the bigger a company gets, the more difficult it is to keep posting gaudy percentage increases in sales and earnings.