By Jeff Reeves, InvestorPlace.com

Google Inc. (GOOG) joined the stock market six years ago yesterday, on Aug. 19, 2004. Google stock has seen relentless growth since then, with its first trades at about $100 a share eclipsed by a quick race skyward. GOOG shares are up an amazing 330% since that IPO.

Of course, few people have been sitting on Google for that whole run. And so far in 2010, investors don’t have all that much to be happy about. Shares are down 24% year to date as of this writing and about 47% off all-time highs near $740 in late 2007. Google opened the day after its sixth birthday trading below $470 and has failed to touch the $600 mark since early January.

So what’s the score with Google? Are the best days behind the company, or is the future still bright for this Internet and technology giant?

To understand where Google is going, you have to look at where it’s been. In typical dot-com fairytale fashion, Google got its start as a 1996 research project by a pair of Stanford students and was incorporated two years later in someone’s garage.

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But the years since have included more than 70 acquisitions -- most notably YouTube for $1.65 billion in 2006 and DoubleClick for $3.1 billion in 2007 -- and a host of new product launches and business ventures. One of the more unconventional moves came just several months ago as Google Energy made its first investment with a $38.8 million stake in two North Dakota wind farms.

• Related Article: Google buyouts top 22 in 2010 for $1.1B.

To some observers, this limitless quest for the next big thing is a sign that Google refuses to rest on its laurels. But to others, it almost seems like desperation.

That is not to say Google’s balance sheet is in mortal danger. Far from it -- the company is sitting on a cash haul of more than $20 billion and has positive cash flow to increase that balance each quarter. A few hundred million bucks a quarter on acquisitions is chump change. But the danger comes from the need for these acquisitions to continue to be consistently profitable. 

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Google’s profits are built on a history of domination. Look at ComScore’s July numbers, which showed Google’s online search market share is nearly four times runner-up to Yahoo!

(YHOO) for proof.

There’s just not that much more juice to squeeze from core business areas. That means investors better look beyond search and online advertising if they want to see significant, sustained growth.

And let’s not forget about the scrutiny from antitrust regulators that has come as of late thanks to that industry dominance.

So is Google doomed to become the next Microsoft (MSFT), with a thrilling ride to the top followed by a decade of disappointment? (Microsoft owns and publishes MSN Money.)

Despite some similarities -- a ubiquitous technology under its belt that has prompted antitrust fears and a roughly 50% flop from historic highs -- that’s not likely. Google has a very bright future with Android and continues to push the envelope when it comes to emerging technologies such as smart phones, tablet computers and other personal electronics.

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What’s more, even if some of the recent buyouts don’t do much for the bottom line and Google’s numbers stay flat, the stock could be quite a value play right now. Thomson/First Call gives GOOG stock a median price target of $626.50 -- more than 30% above current pricing after the recent market volatility. That’s nothing to sniff at.

No company can stay on top of Wall Street forever. But Google has already had a reality check, thanks to the market volatility in the wake of the financial crisis. A bright future for Android technologies coupled with recent declines makes Google a pretty smart buy in the eyes of many.

And while Google’s share of the pie may not increase when it comes to search and ads, the pie itself appears to be getting bigger. Online advertising -- the company’s primary revenue stream -- was up 25% year over year in the first quarter of 2010, according to the Rubicon Project. That means nice growth for Google this year simply by maintaining dominance.

That’s not a permanent solution, to be sure. But let’s not underestimate the potential of this innovative company to wow us a few months or a few years from now with yet another game-changing technology.

• Related Article: Apple Inc. hints at radical new iPhone
  

Things may stay rough in the short term for Google, as they will for the rest of the market amid high unemployment and economic uncertainty. But long-term investors may be wise to bet some of their retirement cash on the creative minds at Google.

As of this writing, Jeff Reeves did not own a position in any of the stocks named here.

 

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