Google Hits $1,000: Here’s Who’s Getting Rich

Google

Source: http://www.flickr.com/photos/scobleizer/

Google (NASDAQ:GOOG) bulls have existed for as long as the brand has. The Internet services firm, founded in 1998 by Sergey Brin and Larry Page, hit public markets in 2004, and has pretty much made investors wealthier ever since. Shares debuted at $85 a pop, and just more than nine years later hit an intraday high of $1,007.40.

As the world’s leading search engine and one of the largest advertising platforms on the planet, Google has experienced tremendous growth over the past few years. Carlos Kirjner of Bernstein Research predicted in February that Google would hit $1,000 this year — which at the time would require 29 percent growth over a 52-week period, immediately following a 52-week period of 29 percent growth — but the company exceeded even that lofty expectation.

Shares catapulted to the psychologically significant level following the firm’s strong third-quarter earnings report.

Google reported consolidated revenues of $14.89 billion for the quarter ended September 30, a 12 percent increase from the year-ago period; net income came in $2.97 billion, or $8.75 per share, which compares to $2.18 billion, or $6.53 per share, a year ago.

The results results showed that company still dominates in its key business: Internet search. The company held a 66.9 percent market share in August, while Microsoft’s (NASDAQ:MSFT) Bing had a 17.9 percent stake and Yahoo (NASDAQ:YHOO), which continues to lose market share, accounted for 11.4 percent of search in September.

Nearly matching search market share in importance is the revenue that Google’s search advertisements generated. Ad prices dropped 8 percent from the year-ago quarter and 4 percent from the second quarter of 2013, showing that the rate of decline in revenue has slowed. Paid clicks increased 26 percent from a year ago and 8 percent from the second quarter.

Mobile advertising prices are a primary concern for investors because they sell for about one-third less than desktop ads, and they have hurt the company’s overall ad prices for the past several quarters. In the second quarter, lower ad prices contributed to the slowing of overall revenue growth, which declined 19 percent over the three months ended in June.

So who are the investors making bank off Google’s enormous success? Here are the company’s top institutional shareholders as of the end of the second quarter. Google is 85 percent institutionally owned and has been a top pick for hedge funds for a number of years.

Owner Name Shares Held Value (in 1,000s)
FMR LLC 18,479,838 16,424,769
VANGUARD GROUP INC. 12,822,404 11,396,476
STATE STREET CORP. 11,100,106 9,865,708
PRICE T ROWE ASSOCIATES INC. /MD/ 9,435,920 8,386,589
BARCLAYS GLOBAL INVESTORS UK HOLDINGS LTD. 7,222,271 6,419,111
JPMORGAN CHASE & CO. 6,822,933 6,064,182
CAPITAL WORLD INVESTORS 6,427,051 5,712,324
CAPITAL RESEARCH GLOBAL INVESTORS 5,540,839 4,924,664
BANK OF NEW YORK MELLON CORP. 4,861,862 4,321,194
INVESCO LTD. 4,002,805 3,557,669
NORTHERN TRUST CORP. 3,962,235 3,521,611
PRIMECAP MANAGEMENT CO/CA/ 3,058,842 2,718,680
JENNISON ASSOCIATES LLC 2,863,672 2,545,214
SANDS CAPITAL MANAGEMENT LLC 2,776,485 2,467,723
BLACKROCK FUND ADVISORS 2,694,813 2,395,134

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