Google briefly second-most valuable firm

Google briefly second-most valuable firm

The new Google Glass 'Bold' prescription frames in shale colour are modelled in New York on Jan 24. (Photo by AP)
The new Google Glass 'Bold' prescription frames in shale colour are modelled in New York on Jan 24. (Photo by AP)

Google Inc briefly surpassed Exxon Mobil as the world's second-most valuable company, trailing only Apple Inc and underscoring the growing role of technology in the economy.

Google Glass, the latest toy from the IT and media firm, allows you to see the projected screen without it blocking your vision. It was intended to give you all of the benefits of a smartphone, without the need to hold the device up where you can see it. Google Glass allows you to browse the internet, obtain directions to locations, send text messages, take pictures and more. (Photo by AP)

Google, which became the world’s largest online advertiser through its dominant search engine, had a higher market capitalisation during intraday trading on Friday before falling back at the close in New York to a value of $395.4 billion compared to Exxon’s $395.7 billion, according to data compiled by Bloomberg. Apple had a market value of $463.5 billion. Microsoft Corp is No. 4 with $303.5 billion.

Technology companies are establishing themselves as key players worldwide as they disrupt industries from retail to finance. Google, which went public in 2004 — 84 years after Exxon — has benefited from consumers moving to online services and content, a trend that’s being accelerated by the growing popularity of smartphones and tablets.

“It’s the sign of the times,” said Fadel Gheit, an analyst at Oppenheimer & Co in New York. “Out with the old and in with the new.”

Exxon, the world’s largest oil producer by market value, has been under pressure since it reported fourth-quarter output declined last month. Net income fell 16% to $8.35 billion, or $1.91 a share. Sales dropped 3.3% to $110.86 billion. Global output for the Irving, Texas-based company dropped for the ninth time in 10 quarters.

BP Plc and Royal Dutch Shell Plc also reported lower quarterly earnings compared with 2012 as the world’s biggest oil companies face rising drilling costs, slumping refining profits and stagnate fuel prices.

Google fared better in its fourth quarter. Last month, it reported that revenue, excluding sales passed on to partners, rose 11% to $13.6 billion, topping projections of $13.4 billion, amid a busy holiday shopping season.

Shares of Exxon rose less than 1% to $90.58 at the close in New York and have fallen 10% this year. Google shares climbed 1.5% on Friday to $1,177.44 and are up 5.1% this year.

“Google’s market cap reflects investor recognition of the growing strength of its digital platform, which is growing leaps and bounds,” Frank Gillett, an analyst with Forrester Research Inc, said in an e-mail.

Google began as a simple search engine when co-founders Larry Page and Sergey Brin found a better way to sift through the exploding amount of information on the Internet. In the following years, the Mountain View, California-based company added online services such e-mail, maps and calendars.

More recently, the company has shown it’s willing to venture further from its early roots with bets on software for mobile phones, fibre networks and entertainment content. It’s also investing in much longer-term projects, such as driverless cars, robotics and balloon-enabled wireless services.

Google has retained its leadership in online advertising. The company is projected to take 41% of the US digital-ad market this year with the No. 2, Facebook Inc, grabbing just 8.2%, according to EMarketer Inc.

“It’s working and it’s continuing to work,” Martin Pyykkonen, an analyst at Wedge Partners Corp, said. “They invented something that people use constantly, every day of their life.” BLOOMBERG NEWS

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