Google does produce something, revenue. The condition that it produces something "tangible" is irrelevant. Over 70% (iirc) of the US economy is in the service industry which often does not produce tangible goods eg banking services, insurance, telesales.


>Thanks for the good lesson on the stock market, Martin.
>
>But no matter how I slice it I see a company that PRODUCES nothing tangible yet priced at ~$500.
>
>WalMart produces NOTHING yet is the biggest company in America!
>
>It all just isn't adding up in my little head.
>
>cheers
>
>>Hi, Jim.
>>
>>>So how does one explain that Google, with so very little in the way of tangible assets and their income limited (basically) to advertising only get to be worth so much more??? I doubt, by the way, that Exxon even advertises on Google.
>>
>>Stock prices are relative. Google stock isn't priced above Microsoft even while Google closed today at around $469 and Microsoft almost at $30. The price per share depends on the amount of shares in the market, and the maret demand for those shares.
>>
>>What you may question instead is market capitalization, which means how much the whole company is valued, and it is the current price multiplied by the number of shares.
>>
>>In this case, Google is valued at around 143.47 billion dollars, while Microsoft is valued at 294.82 billions.
>>
>>As you can see price is almost meaningless. Indeed, from time to time companies with such a high price like Google tend to do a stock split than can reduce the price per share to a half or a third (or more) while at the same time they duplicate or triplicate the number of shares. This is mostly done to increase share volume and favor more trading. Google choose to avoid that, so far.
>>
>>About how fair is Google valuation, my own take is that it is worth, indeed. That's why I bought shares a couple years ago and I'm far from selling anytime soon. The stock has appreciated a lot, true, but the company revenue and margins are improved even more, and they still have a lot of room for growing, so I really think that they will keep growing as a company and its shares will follow that growth.
>>
>>Regards,