San Francisco ? Is Google Inc.’s incandescent stock a golden opportunity or fool’s gold?

Investors have been arguing that question since Google’s initial public offering in August 2004.

But the stakes have grown progressively higher over the past 11 months as the online search engine maker’s shares zoomed past $200, then $300 and, most recently, $400, as the company firmly established itself as the gold standard in Internet advertising.

“With every $100 that goes by, the risk/reward ratio gets less appealing,” Hoefer & Arnett analyst Martin Pyykkonen said.

Just seven years after the company’s inception in a Silicon Valley garage, Google’s market value has soared above $100 billion – eclipsing a long list of business icons that includes Coca Cola Co., Pepsico Inc., Time Warner Inc., Hewlett-Packard Co. and Home Depot Inc.

A man glances up at the Google sign announcing the Internet search engine's initial public offering in this Aug. 19, 2004, file photo from the NASDAQ market site in New York. Analysts are divided on whether Google's stock can continue to climb in price, or whether it is already overvalued.

While hordes of investors have been hungrily buying Google’s stock, company co-founders Larry Page and Sergey Brin have been busily cashing in on the craze. Through November, Page and Brin, both 32, had each made $1.3 billion by selling a slice of their controlling interest in the Mountain View, Calif.-based company, according to data compiled by Thomson Financial.

But Google’s rapid run-up is making it more difficult to figure out how outside investors can make money on the stock, said Clayton Moran, an analyst for Stanford Financial Group.

“I think the current price is justified, but I just can’t go out and tell my clients to buy the stock now,” said Moran, explaining why he downgraded Google’s shares to a “hold” last week.

Moran values Google’s shares at $425 – higher than more pessimistic analysts like Standard & Poor analyst Scott Kessler, who believes $364 is a more realistic price. Google’s shares were trading around $417 on Friday.

“I think Google is a great company and it has been a great stock, but I don’t have a lot of confidence the shares will continue to ramp up,” Kessler said.

Google’s shares, in fact, would probably tumble badly if the company were to miss the lofty earnings expectations being set by analysts with no guidance from management.

Other thorny issues could easily prick the stock.

The company already is locked in a series of legal battles over the search engine’s alleged abuse of trademark and copyright laws while mighty Microsoft Corp. – armed with $40 billion in cash – continues to invest heavily in a strategy aimed at toppling Google. Some analysts also are worried about Google’s ability to manage a rapid expansion that might include a substantial investment in Time Warner’s AOL.

Nevertheless, betting against Google so far has proven to be a bad idea. When the company first went public, Google’s skeptics believed fierce competition from formidable rivals like Microsoft and Yahoo Inc. would erode the company’s search engine leadership and, ultimately, retard its earnings growth.

But Google has been widening its lead, giving it more opportunities to serve up moneymaking advertising links alongside its search results. Through October, Google held a 39 percent share of the U.S. market for online search, up from 34.8 percent at the same time last year, according to comScore Networks. Yahoo’s share has meanwhile declined to 29.2 percent from 32 percent a year ago while Microsoft’s has decreased to 14.6 percent from 15.8 percent last year, comScore said.

As Google has introduced more intriguing products to complement its search engine, prominent securities analysts like Benjamin Schachter of UBS Securities and Safa Rashtchy of Piper Jaffray have become convinced the company is bound to become an indispensable hub in a global economy increasingly driven by the Internet.

Google “is a paradigm-changing company,” Schachter wrote in a research report that outlined why he believes the company’s shares may soon reach $500.