• BusinessWeek, Wednesday, October 25, 2006 11:30 AM

As usual, Google's earnings beat the Street, and the stock surged as a result. Even more analysts think Google's stock price could hit $600 per share, fueled by the acquisition of YouTube, which many believe will catapult the Web giant into a whole new area of search, significantly expanding its prospects for ad revenue growth.

That's right--Google may finally have made the move that brings it beyond the one-trick-pony syndrome that bears have pegged to it for years. Shares closed at a near-record high of $473.31 yesterday. And it's not just video Google's moving into, as Jeffries & Co. analyst Youssef Squali points out. Google Checkout, for example, is a step into the $104.9 billion e-commerce market. The company is moving into categories that traditional advertisers haven't ventured into.

Google has also shown signs of growing beyond its core within Web search. Just yesterday, it launched search personalization tools for Web publishers, which will help them build and mold their own Google search engine to make internal searches more relevant. As Google sees it, the more relevant the search, the more searches will be conducted, and the more ad revenue publishers and Google can generate together.

To be sure, as long as Google continues to beat expectations, the stock will soar--but not everyone is so bullish. Standard & Poors, which provides financial market intelligence for global markets, recently cut its rating of Google to "hold" from "buy," due to "potentially excessive enthusiasm regarding the company and stock."

Read the whole story at BusinessWeek »