Google world's most valuable media company

NEW YORK - Google. took over the top spot as the most highly valued media company this week, surpassing Time Warner Inc. in just 10 months of trading as a public company.

Google's share price on the Nasdaq rose another US$2.18, or 0.75 per cent, to close at US$293.12 on Tuesday, an all-time high. Stock market analysts have suggested the stock could go as high as US$325 or US$350 a share.

With a current stock market capitalisation of more than US$80 billion (43.6 billion pounds), Google is now worth more than any other media company in the world. That includes Time Warner, created five years ago when AOL purchased Time Warner for US$106 billion in a much-hyped combination of old and new media.

But Time Warner's share price has deteriorated since the dot.com bubble burst -- its market capitalization on Tuesday stood at US$78.1 billion -- and investors now view Google as the hot internet and media company.

Other, more traditional, media companies trail Google's stock market worth by even more. Viacom and Walt Disney, for instance, hold stock market capitalization of between US$54 billion and US$55 billion.

Even Yahoo, seen as one of the big internet media competitors, carries a market value some US$27 billion less than that of Google.

This all comes just 10 months after Google debuted in an initial public offering last August, priced at US$85 a share. And it has led to some concerns that the company may be overvalued, a throwback to the hype of the dot.com era.

Google's sales last year, for instance, totalled just US$3.2 billion while Time Warner's stood at US$42 billion. And Mountain View, California-based Google is trading at a sharply higher multiple than any other media company except Yahoo.

Google shares now trade at 50 times the average estimate of analysts surveyed by Reuters Estimate of earnings in 2005. Compare that with Time Warner, which trades at 22 times earnings, Disney, which trades at 21 times earnings, or Viacom, which trades at 19 times earnings.

Even so, not one of the 30 analysts polled by Reuters Estimates lists Google as a sell.

- REUTERS