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By: Reuters | 08 Oct 2007 | 04:34 PM ET
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Shares in Google surpassed the $600 mark on Monday, fueled by investor confidence that the Web search leader's advertising technology will capitalize on new areas of the media industry.

Google shares [GOOG  Loading...      ()   ] hit $600 for the first time early in their trading session on Nasdaq, then rose as high as $610.26, setting a new benchmark for the company whose shares priced at $85 at its initial public offering in 2004.

From its place as the leading site for conducting Internet searches, Google branched into Web video by buying YouTube, trod on Microsoft's turf with e-mail and other Web-based applications, and has taken aim at Yahoo's display advertising business with a planned deal for DoubleClick.

At nearly $189 billion, the company ranks 11th among the largest companies on the Standard & Poor's 500 Index by market capitalization. The ranking puts it behind software maker Microsoft and network equipment company Cisco Systems, but ahead of retailer Wal-Mart Stores.

Some analysts see Google reaching $700 a share in the next year as it competes more fiercely with Yahoo and gains a foothold in new forms of Web marketing, including video.

Martin Pyykkonen of Global Crown Capital still has a $600 price target on Google, a view he will reevaluate after the company reports its third-quarter earnings on Oct. 18.

"It's not going to be as easy to get to the next 100 points as it was the last," he said of Google's share price.

The average price target for Google shares is just over $614, ranging from $545 to $700, among 37 analysts polled by Reuters Estimates.

Last Friday, Bear Stearns was the latest firm to say Google could hit the $700 mark, calling it one of the best operating companies it covers in the Internet sector.

"Google continues to gain market share in search queries while continuing to face a bevy of competitors," Bear Stearns analyst Robert Peck wrote in a note to clients.

"Further, Google's efforts in online video, radio and print have added a layer of value that is absent from its competitors' portfolio of offerings and which has the potential to yield significant financial rewards," Peck wrote.

Google is trading at 31 times projected 2008 earnings, an attractive multiple given growth forecasts for the company and one that represents a discount to where Microsoft and Cisco shares were trading in their heyday, according to Pyykkonen.

"They are clearly No. 1 and not losing any ground there," he said.

The company's earnings report will be a key indicator for many on Wall Street, after its last quarterly release in July fell short of investor expectations due to a hiring spree.

"I don't have any concerns about them making the quarter, it's a question of how much they beat it by," said Pyykkonen.

Google closed $15.57 higher, or 2.6 percent, at $609.62.

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