GOOGLE hits $500: MSFT hits 2-Year High: NASDAQ at 5-Year High

QUICK NEWS UPDATE (when is the media going to cover all this?):

Just as I predicted, Google stock has broken $500 for the first time today, valuing the search engine giant at over $155 billion:

This is what I said a couple of weeks ago:

Trading at 473.99 at the time of writing, having beaten Wall Street's expectation on Q3 earnings hansomely only a week ago, it's worth putting under the microscope. This is a company which made a 90% jump in Q3 earnings on the year to $733.4 million, and a revenue increase of 70% to $2.69 billion. While that sounds impressive, the company blew $1.65 billion of those dollars on Youtube, and unknown and untested brand only weeks ago. That's another six month's record earnings at the same level to make the acquisition profitable in absolute terms, without dividends, and without re-investment in its own business. And that's if the concept succeeds. NewsCorp bought MySpace on even more tenuous terms less than three months ago.

All this financing action looks very much like a replay of 1995/6, when Netscape and Yahoo! stacked up one-billion dollar plus IPO prices, except that's it happening in the form of trade sales rather than IPO's. That's predicatble enough. The tech bubble of the 1990's may not have endured, but the impression that the internet is a growth and medium catalyst for hundreds of industries didn't lose any lustre.

My guess is, despite Google's precarious revnue model, the stock spikes $500 before the year end, and a few more 'social networking' sites start charging precarious valuations based on their own one year busines models.

Microsoft has hit $30 for the first time in two years today too, making for a two year high:

This benchmarks are extremely significant as a guage of investor appetite for tech. The NASDAQ has hit another five-year high today too. It's only up from here.