Newhouse News Service

Some splits seem so senseless. Jennifer and Brad. Dean and Jerry. Liz and Dick.

Others make perfect sense.

Such as a split for Google’s sky-high stock.

Google shares were trading above $460 a share this week and could hit $600 by year’s end, a Piper Jaffray analyst predicts.

When prices soar that high, conventional wisdom dictates a split – creating two or more shares for every share held. The company is worth the same as before, but individual shares become cheaper and thus more attractive for small investors.

Microsoft, Intel, eBay, Yahoo and many other tech giants have followed this route.

So why isn’t the King of Internet Search doing the same?

Officially, Google is mum on its stock plans. “Our primary focus is on making Google more beneficial for users and customers, and on building a world-class company,” spokeswoman Lynn Fox says. Unofficially, conventional wisdom never has counted for much at the Googleplex. From free gourmet meals and a “do no evil” motto to its unusual Dutch auction IPO in 2004, the company in Mountain View, Calif., has charted a unique course.

Companies often do stock splits to create buzz, and to lure bargain-hunters who won’t scrutinize the business fundamentals too closely, says David Menlow, president of IPOfinancial.com in Millburn, N.J. Google already has beaucoup buzz. And its fundamentals are enviable.

“They’ve set the bar very high as far as how they do their business,” Menlow says. “The risk to Google appears to be not how-high-the-stock, but not being in it when something big hits (in search technology). They continue to redefine the space.”

Google reaps about 95 percent of its revenue from advertising, selling keyword-based ads that appear alongside search results (AdWords) and keyword-based ads that appear on Web sites that share per-click revenues with Google (AdSense).

But the company’s octopus-like reach extends in many more directions. There is Google Book Search. Google Base lets people publish their own searchable information. Google Earth and Google Local/Maps are mapping services. Froogle offers comparison shopping. Desktop Search finds things on your PC.

The list goes on: Google Groups (forums), Google News, Blogger, Gmail, Google Talk (voice chat), Picasa (photo sharing).

At last week’s Consumer Electronics Show in Las Vegas, Google co-founder Larry Page added downloads of “I Love Lucy” reruns, classic NBA games and recent CBS programs. The Google Video Store will offer them for purchase or rent.

“What most companies should be doing is worrying less about what their stock is doing and more about what the company is doing. That seems to be what Google has done extraordinarily well,” Menlow says.

There may be a simpler explanation for Google’s apparent aversion to stock splits:

Warren Buffett.

Page and Sergey Brin, who together hatched Google at Stanford University in 1998, are fans of the Berkshire Hathaway chief executive – who is famously bearish on stock splits.

Buffett’s company sells at about $90,000 a share.

Kevin Coughlin covers technology for The Star-Ledger of Newark, N.J. He can be contacted at kcoughlin(at)starledger.com.

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