Tim Howell’s Weblog

According to Reuters, earlier this week Google overtook eBay as the biggest Internet company in terms of stock market value after posting strong quarterly earnings. The share price surge resulted in an overall valuation of $56 billion, which was more than eBay’s $52 billion valuation at the time.

Whether this will continue to be the case over the long term is difficult to pick, but eBay has had its challenges recently; after not meeting its financial goals the share price got chopped by 20%, no doubt assisting Google’s valuation catch-up play.

The Business 2.0 blog even went so far as comparing the rise of Internet companies such as eBay with Metcalfe’s Law (where the utility of a network equals the square of the number of users), and wondering whether the fate of these companies would be predicated on the ongoing growth of Internet usage.