February 20, 2013 8:41:02 AM
SAN FRANCISCO -- 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 recession since World War II 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 Inc. 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.
Standard & Poor's Capital IQ analyst Scott Kessler concurred, reasoning that many investors who have abandoned Apple are gravitating to one of its biggest rivals.
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.