Google Tops Exxon As Second Most Valuable U.S. Company

Investing

Published: February 7, 2014 2:39 pm

Last Updated: April 27, 2020 10:36 pm

Even though there is a virtually unlimited supply of Internet searches available and only a limited (if very large) amount of oil and gas available, it would seem that oil and gas would be more valuable that Internet searches. Until today that was true.

Google Inc. (NASDAQ: GOOG) with a market cap of just more than $394 billion has surpassed Exxon Mobil Corp. (NYSE: XOM) and its market cap of just over $393 billion as the second-most valuable U.S. company. Only Apple Inc. (NASDAQ: AAPL) with a market cap of $465.4 billion is more valuable than Google. Microsoft Corp. (NASDAQ: MSFT) with a value of $302.1 billion is fourth.

Google dominates the online advertising market, taking some 41% of all online ads. Its dominance in search is even greater, approaching 70% in the U.S. and even higher in some European markets.

And while Exxon is the largest integrated oil & gas company in the world and holds more than 25 billion barrels of proved reserves. The company’s enterprise value is $402.6 billion, so each barrel of reserves is valued at about $16. Exxon’s goal is to replace every barrel of oil it produces each year, but doing any better than that is very expensive if even possible.

Google can grow without limit, and that is something that even Apple can’t do. It’s really no wonder that Google is now number 2. The question is, when will it become number 1?

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