Google’s share price hit a new high on Friday, reflecting the company’s push into new ways for advertisers to reach its massive online audience.

Yahoo News reports, “Google’s shares peaked at $560.79 before falling back to finish at $560.10, up $7.27, or 1.3 percent. The rally eclipsed Google’s previous record high of $558.58 attained in mid-July, just days before the Mountain View-based company disillusioned investors with a second-quarter profit below analyst estimates”.

Google has a market value of almost $175 billion, more than Hewlett-Packard and IBM. The stock has increased six-fold from its IPO price of $85 in August 2004.

The Federal Reserve Bank’s decision to lower short-term interest rates by 0.5 percentage points means Google stands to benefit because it runs the largest advertising network on the Internet.

Despite challenges, Google has been able to widen its lead in search — the activity that triggers the text-based ad links that have become a huge moneymaker for the Mountain View company.

Google now handles 54 percent of all U.S. search requests. Yahoo lags well behind at 20 percent followed by Microsoft at 13 percent.

Google earned $1.9 billion on $7.5 billion in revenue during the first half of this year. That will increase during the second half because of the Christmas/Holidays shopping season.

According to Yahoo News, “Several industry analysts already are forecasting Google shares will soon surpass $600. The stock eclipsed $500 for the first time 10 months ago”.

In conditions of the highest secrecy with NDAs slapped on insiders, the long-awaited GooglePhone is set to enter a crowded marketplace sometime soon after America’s Labor Day.

Thought to be an early prototype of the GooglePhone

It is being described it as “simpler” and not as flashy as Apple’s iPhone. It has the ability to scroll through icons horizontally, making a number of different features easily accessible despite the limited screen space.

Another described it as having three-dimensional, animated buttons on the screen with a small QWERTY keyboard, like a Treo or a BlackBerry, rather than relying on a touch-screen, like the iPhone.

Earlier, Sim Simeonov, a technologist-in-residence at Polaris Venture Partners in Waltham, blogged an entry titled “The Real Google Phone.” He wrote that an “inside source” had described a “BlackBerry-like, slick device,” and that “Google would create distribution partnerships with a number of different mobile carriers, unlike Apple, which is locked into AT&T for five years”.

In August, The Wall Street Journal reported that Google hopes that several different manufacturers will build the phones and multiple carriers will help distribute them. Google will supply the software and deliver ads to the phones.

Engadget wrote last week that Google’s new operating system for cellphones, could be revealed shortly after Labor Day.

We await developments with interest.

Google recently announced that its revenues were up by 58 percent. For any other company, that would be good news. But this is Google we’re talking about, where only the fantastic will ever be good enough.

Google’s news came only two days after Yahoo announced a quarterly earnings drop, which adds some perspective to the reaction.

The search company’s performance again centred on to strong search advertising sales, in which Google’s revenue reached $3.87bn in the second quarter, up from $2.46bn in the same quarter last year. Net profits hit $925m, up from $721m.

CEO Eric Schmidt, during a meeting with analysts said, “We’ve delivered strong revenue performance, particularly on core Google.com search, and strong cash flow in our seasonally weak quarter. Traffic is stronger at Google.com, both domestically and internationally, with annual traffic growth actually increasing over time.”

Revenues from Google.com alone hit $2.5bn, representing year-on-year growth of 74 percent.

Revenues from AdSense — the ad network for third-party web sites — grew 36 percent over last year, to $1.35bn.

Schmidt continued, “The summer seasonality that we always talk about does appear to be milder than we expected, and we’re improving our ability to monetize searches, as we do every quarter.”

CFO George Reyes commented, “Spain, Italy, and France in particular outperformed in Q2, while Germany, along with the UK, were significant drivers of revenue growth.”

UK revenues were $600m, a 4 percent increase.

Overall, operating income dropped to $1.1bn, and there was a 7.12 percent drop in Google’s stock price in after hours trading.

The Official Google Blog gives a comprehensive explanation of why the search giant bought ad serving company, DoubleClick.

“Google and DoubleClick play different but complementary roles in online advertising. Google primarily sells ads, and DoubleClick delivers (serves) ads. The relationship between Google and DoubleClick is analogous to the relationship between Amazon.com and Federal Express. Amazon.com makes money by selling a book to the consumer. Federal Express makes money by delivering it to the consumer.

“In summary, we’re buying DoubleClick because:

1. DoubleClick’s products and technology are complementary to our search and and content-based text advertising business, and give us new opportunities to improve online advertising for consumers, advertisers and publishers.
2. Historically, we’ve not allowed third parties to serve into Google’s AdSense network, which has made it hard for advertisers to get performance metrics. Together, Google and DoubleClick can deliver a more open platform for advertisers, and provide the metrics they need to manage marketing campaigns.
3. By combining Google’s infrastructure with DoubleClick’s knowledge of agencies and publishers, we can create the next generation of more innovative ad serving technology, one that significantly improves the efficiency and effectiveness of online advertising.
4. To manage ad inventory, some of the largest publishers use DoubleClick DART for Publishers – but a good portion of it goes unsold. It’s our view that the combination of DoubleClick and Google will help these publishers succeed by monetizing their unsold inventory.

Go here to see the rest of this informative article.