Google Inc. (NASDAQ: GOOG) has passed Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) to become the third most valuable U.S. company as measured by market capitalization. The search company’s number stands at $257 billion, ahead of the conglomerate’s $244 billion.
The market cap table is still topped by Apple Inc. (NASDAQ: AAPL) at $439 billion and Exxon Mobil Corp. (NYSE: XOM) at $403 billion. But Google has moved ahead of several companies, including Berkshire Hathaway, with market caps just below it. These include Wal-Mart Stores Inc. (NYSE: WMT) at $239 billion, General Electric Co. (NYSE: GE) at $237 and Microsoft Corp. (NASDAQ: MSFT) at $234. On any given day, a sharp drop or rise in the share prices of any of these companies could quickly scramble the hierarchy.
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Google shows that what is basically a single-product company can sit near the top of the market cap list. It relies more on one product or service for its revenue than the other most valuable public companies. Search has been and continues to be its only large revenue-producing business, despite a line of experiments that include smartphones (it dumped its ownership in Motorola) the world’s largest video site, YouTube, and a huge map business. In Google’s most recently reported quarter, none of these were highlighted as adding to revenue:
Revenues and other information — Google Inc. revenues for the quarter ended June 30, 2014 were $15.96 billion, representing a 22% increase over second quarter of 2013 revenues of $13.11 billion.
Sites Revenues — Our sites generated revenues of $10.94 billion, or 69% of total revenues, in the second quarter of 2014. This represents a 23% increase over second quarter of 2013 sites revenues of $8.87 billion.
Network Revenues — Our partner sites generated revenues of $3.42 billion, or 21% of total revenues, in the second quarter of 2014. This represents a 7% increase over second quarter of 2013 network revenues of $3.19 billion.
Other Revenues — Other revenues were $1.60 billion, or 10% of total revenues, in the second quarter of 2014. This represents a 53% increase over second quarter of 2013 other revenues of $1.05 billion.
International Revenues — Our revenues from outside of the United States totaled $9.33 billion, representing 58% of total revenues in the second quarter of 2014, compared to 57% in the first quarter of 2014 and 55% in the second quarter of 2013.
Even Android, Google’s remarkably popular operating system, did not deserve a place in the earnings release.
With a revenue growth rate of 22%, Google’s market cap likely will continue to increase. It has a long way to go to catch Exxon, but a bet against Google would probably be a bad one.
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