Believe it or not, Google is cheap at $1,000

Friday was a pretty amazing day for Google (Nasdaq: GOOG) shareholders.

The company announced excellent third quarter results on Thursday evening and the shares soared 14% on Friday as a result. The rise took Google's share price through the $1,000 barrier for the first time.

A big one-day jump like this is pretty remarkable for such a large company.

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And more importantly, I still think Google is worth buying even at $1,011!

Google is cleaning up on mobile

The worry with mobile has always been that Google would struggle to monetise' users of smartphones or tablets. In other words, if you're surfing the web on a smartphone, you might be less likely to click on an ad than if you were using a desktop.

But it's now clear that Google is still able to push plenty of users to advertisers on mobile or on a desktop. Indeed Google announced last week that clicks through to advertisers had soared 28% from a year earlier.

As a result, total revenue for the quarter jumped 12% to $15bn.

This growth in mobile is at least partly due to Google's new enhanced campaigns' system that makes it easier for customers to see whether mobile ads are effective. This system has demonstrated that mobile ads really can work for advertisers.

Google owns plenty of strong assets

I'm also excited by some of the more early-stage projects that Google is working on such as Google Glass and some anti-ageing health research. Critics argue that Google may be wasting money on projects that will never generate a return, but I'm happy to take the risk in the hope that at least one of these blue sky' projects will prove to be a hit.

I think sceptics have a stronger point when they point out that Google's acquisition of Motorola hasn't been a great success so far. Motorola is still losing money and it's not clear why Google decided to buy.

I should also stress that Google's revenue-per-click fell by 8% in the last quarter. In other words, advertisers paid a lower average fee for each click through to them. But let's not forget, overall click levels are still soaring, so I'm not too worried.

In fact, if I had any spare cash to invest, I would seriously consider adding to my existing holding in Google. Even after Friday's rise in the share price, this company is still trading on a forward price/earnings ratio of 19. If you strip out the $55bn cash pile, that ratio falls to around 16.

Granted, those numbers don't shout: screaming bargain', but they're still pretty decent for a company that is growing so quickly. And I think these numbers are all the more impressive when you remember that Google is now a huge company with a $336bn market cap only Apple and Exxon Mobil are larger.

The renowned investor, Jim Slater, once said that elephants don't gallop', but Google suggests that large companies can at least canter.

Indeed, Slater was always a big fan of the PEG ratio, and sure enough, Google is trading on a PEG ratio of just over one. (Slater liked to look at companies with PEG ratios below one, so Google isn't too far away from that.)

I said last month that Google was my favourite tech giant. Even after last week's rise, that's still the case.

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