Trillion-Dollar Company: Google Reaches Milestone in Market Value

SAN FRANCISCO — Numbers have long held a special significance at Google.

When the internet company was founded in 1998, it based its name on the mathematical term “googol,” which refers to the numeral 1 followed by 100 zeros.

When it filed to go public in 2004, it said it planned to raise $2,718,281,828, which was the sum of multiplying $1 billion with the mathematical constant “e.”

And in 2015 when it reorganized under a parent entity called Alphabet, it announced it would buy back shares worth $5,099,019,513.59, a figure derived from the square root of 26 — the number of letters in the alphabet.

On Thursday, Google hit another eye-popping number. The market cap of Alphabet vaulted above $1 trillion for the first time. That made it the fourth technology company — after Apple, Amazon and Microsoft over the past two years — to pass this once unimaginable valuation.

“So proud to see it hit the storied $1T market cap today!” Marissa Mayer, a former Google executive, said in a tweet on Monday, prematurely celebrating the milestone. She said she remembered when Google had raised money at a $100 million valuation in 1999, the year she became employee No. 20.

Google reached its latest numerical milestone as it is facing some of its biggest tests. The Silicon Valley giant is bidding adieu to its founders, Larry Page and Sergey Brin, whose love of math and disregard for Wall Street once embodied Google’s free spirit. Mr. Page, 46, and Mr. Brin, 46, said last month that they would step down from their executive roles.

As part of the transition, Sundar Pichai, a longtime deputy who has been Google’s chief executive since 2015, took the reins of what has been a changing company. While Mr. Page and Mr. Brin once said Google was not a conventional corporation, it has become just that in recent years.

Aiming to get a handle on its rising scale and size, Google has brought on professional managers like Ruth Porat, its chief financial officer, who joined from Wall Street in 2015. It also increasingly paid attention to curbing costs and monitoring the financial viability of its so-called moonshot projects, like self-driving cars or hot-air balloons that provide internet connectivity.

Google has also crammed more advertising onto the top of search results and squeezed money out of businesses like YouTube. And it has pushed aggressively into wooing corporate customers for its cloud computing business, putting it into the kind of lucrative but boring business that early Googlers once sneered at.

All the while, Google’s unique and freewheeling corporate culture appears to be crumbling. Activist employees have complained that Google is cracking down on workers who speak out on issues such as the company’s treatment of sexual harassment or working with the American military on technology that could be used to improve weapons.

Last year, Google fired several employees active in labor organizing for what it described as “clear and repeated violations of our data security policies.” It has also been working with a firm known for helping companies fend off unions.

Jack Poulson, a former research scientist who left Google in 2018, said the company’s focus on maintaining growth and keeping Wall Street happy had changed its character.

“The ethical lines are being rolled back,” said Mr. Poulson, now the executive director of Tech Inquiry, a nonprofit that helps tech workers raise ethical concerns about products they are working on. He said he had resigned from Google to protest the company’s efforts to introduce a search engine in China that would adhere to the Chinese government’s censorship requirements. (Google has said there are no current plans to launch its search engine in China.)

Google faces other challenges. Regulators and lawmakers around the world are scrutinizing the company for vacuuming up people’s private information and chilling the technology landscape with its market dominance. In the United States alone, it faces investigations from Congress, state attorneys general and the Department of Justice.

The company will also be under the spotlight this year with the American presidential election. It has grappled with criticism over how it allows politicians to target specific audiences with digital ads, a practice that it recently scaled back. The company is also scrambling to prevent misinformation spreading on YouTube and Google search results, as it did in the 2016 election.

These issues now fall on the shoulders of Mr. Pichai, 47, a former McKinsey management consultant who has proved adept at handling the traditional executive functions — like earnings conference calls with Wall Street analysts — that Mr. Page and Mr. Brin spurned. Yet he is often described as lacking the visionary chops of the company’s founders.

For all the changes facing Google, one constant has remained: It is essentially the sole proprietor of the internet’s most lucrative business. Google search is the on-ramp to much of the internet, and placing advertising next to key search terms is a necessity for most businesses, who risk forgoing traffic to a competitor.

The company marches upward in market value as it continues hauling in $137 billion (and growing) in annual revenue, much of it from its healthy digital advertising business.

And despite growing consumer and government animosity toward tech companies, the stock prices of the major players continues to soar. The S&P 500 tech sector ended 2019 up nearly 50 percent, with Alphabet shares rising 28 percent in the year.

“We see the same headlines, but we don’t see that show up on the results,” said Ron Josey, an analyst at JMP Securities who follows the company. “At the end of the day, it’s the numbers that are talking.”