June 27 (Bloomberg) -- Google Inc.'s shares rose above $300 after less than a year as a public company, cementing the most- used Internet search engine's status as the world's largest media company by market value.

The stock rose $3.51 to $300.76 in Nasdaq Stock Market composite trading as of 3:27 p.m. New York time. Google, founded in 1998, first sold shares to the public in August at $85 each.

The Mountain View, California-based company surpassed Time Warner Inc., owner of the 83-year-old Time magazine and the Warner Bros. movie studios, as the industry's most valuable company on June 6. Google has a market value of $83.4 billion. Time Warner is valued at $79.4 billion.

Google's stock ``is something that I think you could put away and put on a shelf,'' said Laszlo Birinyi, president of Birinyi Associates in Westport, Connecticut, in an interview on June 23. ``Unlike the Internet stocks a few years ago, this is a real company.''

The stock's gains have been propelled by a surge in profit and optimism that the company's efforts to expand beyond search- based advertising may fuel growth. Google said last week it was developing a payment service.

First-quarter net income surged almost sixfold to $369.2 million, the company said in April, as new features lured more users and sales of online advertising outside the U.S. expanded.

Analysts on average expect profit this year, excluding some costs, to climb to $5.22 a share from $2.51 in 2004, according to Thomson Financial. Revenue may climb 12 percent to $3.56 billion, based on the average estimate.

Buy Recommendations

``Managing and staying on top of that kind of growth is a real challenge,'' said James Huguet, who oversees $1.3 billion at Great Companies LLC in Clearwater, Florida. Profit growth may fall short of Wall Street's expectations, said Huguet, who owns shares of Yahoo! Inc., owner of the most-visited web site, and EBay Inc., the world's largest Internet auctioneer.

Google's stock performance this year mirrors the moves in Yahoo and Amazon.com Inc., the largest online retailer, during their first year after going public. Yahoo more than doubled, while Amazon nearly tripled. EBay soared more than 20-fold.

Wall Street firms still recommend investors purchase the shares. Among 32 analysts, 25 rate Google a ``buy'', seven call it a ``hold'' and none say ``sell.'' Smith Barney's Mark Mahaney has the highest 12-month price estimate for the stock at $360.

Google's largest holders are also optimistic. All 10 of the asset managers with the biggest stakes added to their holdings, according filings from at least March.

Fidelity Investments, the world's largest mutual fund firm and Google's biggest holder, boosted its stake by 46 percent to 17.5 million shares in April and May.

Relatively Cheap

Internet companies such as Google ``are very interesting longer-term plays,'' said John Calamos Sr., chief executive of Calamos Asset Management Inc. in Naperville, Illinois, which owns 841,000 Google shares and oversees $38.9 billion. ``If you go out two or three years, if they execute their business plan, there's phenomenal business models there.''

Google's shares are less expensive relative to earnings forecasts than Yahoo and about inline with Amazon. They fetch 57 times this year's average profit estimate, compared with Yahoo's 62 times and Amazon's 55 times.

The stock has a lower price-earnings-to-growth, or PEG, ratio at 1.8. This measure, comparing the price-earnings ratio to the projected growth rate for the company, is 2 for Yahoo and 2.4 for Amazon.

Still, to investors such as Norm Conley, a fund manger at St. Louis-based JAG Advisors, the rally in Google shares isn't justified because earnings growth may slow.

`Competitive Pressure'

Conley pointed out that Google's market value exceeds the $72 billion spent on television and cable advertising last year, according to Nielsen Monitor Plus.

The company is also the world's 41st largest by value -- bigger than Deutsche Telekom AG, Europe's biggest phone company, and Amgen Inc., the largest biotechnology company -- even though it falls short of the top 500 by sales or net income.

``The market is underestimating the competitive pressure that Google is likely to face in the near future.'' said Conley, who helps manage $900 million and sold the last of his Google shares in April. ``It would not take much at these levels for Google stock to get completely hammered.''

To contact the reporter on this story: Edgar Ortega in New York at ebarrales@bloomberg.net

Last Updated: June 27, 2005 15:37 EDT