Google's share price topped $1,000 for the first time, sparking a flurry of reporting on this unimportant milestone. Sure, there are only four companies with share prices that high on US stock markets, but that's because Google, Warren Buffet's Berkshire Hathaway, the retailer Priceline and pork processor Seaboard eschew the common Wall Street practice of stock splits to keep the nominal price of their shares low.
Warren Buffett is famously opposed to the practice, and that's the reason that directly owning shares in his successful investment business is out of reach for all but the wealthiest (Berkshire Hathaway stock is currently trading at around $175,000 a share). But what put Google into the $1,000 a share club today is interesting: Surging profits, which saw the stock leap as much as 10 percent today. Google reported third quarter profits of $3 billion yesterday, up 36 percent from the same period a year ago. How did the company do it?
In the words of USA Today's Matt Krantz: "The Internet company showed again late Thursday just how lucrative its business of collecting and selling consumers' personal data to the highest bidder has become." That's right, Google is in the same business as the reviled National Security Agency. But rather than collecting reams of online data supposedly in the name of national security, Google collects data for sale to whoever has the money to pay.
Google is one of America's most admired companies, and tens of millions of people visit its online search engine, browse the internet with its Chrome browser, look at funny cat clips on YouTube, and navigate their cell phones with its Android software every day. And if you're worried about online privacy and data collection, there's no particular reason to trust a private, profit-motivated corporation with your information more than the grey suits over at the NSA.
The company is always on the lookout for new ways to monetize the personal information of its users.
For instance last Friday Google said that it would soon begin using some users pictures and comments in targeted advertising at their friends and family members. They way it would work is if a user has shared the information the he likes a restaurant or a store, Google would display the users picture and endorsement for ads for that business, targeted at people that belong to his online social network. Facebook has already moved in that direction, and Twitter is expected to start looking at similar approaches as it gears up for its IPO later this year.
The New York Times characterized the change as "the latest example of the continual push by Web companies to collate the reams of personal information shared online in the chase for profits."
A lot can be learned about a person by what videos they watch, whose addresses are in their online contact lists, what they search for and what they talk about online. That's why the NSA has been so interested in monitoring internet activity - and why Google is.