Google Now Second Most Valuable Company In The U.S.

 | Feb 14, 2014 01:49AM ET

Yesterday, Google’s (GOOG) market cap reached $400 billion, which is a significant milestone for a number of reasons. At $400 billion GOOG has overtaken Exxon (XOM) as the second largest company in the US by market value.

Google and Exxon are obviously in much different industries, but it’s worth noting that Exxon nearly generates as much in operating income as Google generates in revenue.  Exxon’s EBIT in 2013 was $57.7 B, while Google’s revenue was $59.8 B.  In fact, when you exclude the $4.4 B in revenue that came from Motorola, Exxon’s operating income did exceed Google’s revenue.

Google’s market cap is obviously forecasting a lot of growth, but the company still really has only one source of revenue, and its market cap is starting to get pretty large even relative to that total opportunity.  Total global advertising spend on digital advertisements was $118 B last year, and total ad spending overall was $517 B.   Considering that Facebook (FB) also has a $170 B market cap, Google and Facebook combined now have market caps that exceed all advertising spend globally on all forms of media.

There have only been six other companies to ever hit the 400 level, and only one (Apple) currently maintains it.  Apple’s (AAPL) market cap is $485 B, so if Apple stays where it is, Google would become the largest company in the US if/when its share price hits $1447.