Google's stock price closed above $400 a share for the first time yesterday, a move that analysts called a "milestone" in the torrid growth and extraordinary success of the Internet's most profitable public company.

At a closing price of $403.45, up $5.30, Google has a market value of more than $117 billion, putting it in a league of its own for a business that has been public for little more than a year.

Wall Street seems to be giddy with Google's performance, as well as its entry into new markets -- notably the test launch this week of Google Base, a user-controlled searchable database service. But by entering into businesses that are already ripe with competitors, Google could face challenges to make a name for itself in those arenas and lure established customers.

Craigslist, for example, is a dominant player in the classified-ads market that Google may be tapping into with Google Base. Likewise, Google's Gmail is going against Yahoo and Microsoft in the Internet-based e-mail field, and its Google Talk instant messaging program will have a tough time beating leading player America Online, which continues to add features for its users.

Even analysts who rate Google shares as a "buy," such as David Edwards with American Technology Research in San Francisco, wonder about the continued upswing of the stock.

"At some point, deceleration will happen," Edwards told Bloomberg News. "The question is whether that will happen next year."

Still, with revenue and profits skyrocketing from ad sales associated with Internet searches, other analysts are setting aside the skepticism that prevailed when Google went public at $85 a share and are predicting that the stock will continue to rise through the holiday season.

"This is a transforming story," said John Tinker, a managing director of Think Equity Partners LLC. "They have a great business model. We are in the second inning and not the eighth."

Safa Rashtchy -- an analyst with Piper Jaffray Cos. who has followed Google closely since its founding in 1998 -- characterized breaking through $400 a share as a "milestone" but said a blizzard of Google news in recent days was driving up the stock.

"It is tempting to look at $400 and say it is overpriced and has gone up so fast," Rashtchy said. "I'm not saying it is dirt cheap, but it could be trading much higher."

To diversify their holdings, Google co-founders Sergey Brin and Larry Page each have sold more than $1.1 billion of their shares since the company's initial public offering, according to data from Thomson Financial. The company's chief executive, Eric E. Schmidt, has sold about $350 million of stock, while Omid Kordestani -- who joined Google from a onetime Internet darling known as Netscape that crashed when the dot-com bubble burst -- has sold more than $550 million of Google stock.

Brin, Page and Schmidt still have most of their net worth tied up in Google, so analysts say that while the dollars generated by their stock sales are large, the triumvirate is merely being prudent by reinvesting some of their money elsewhere.

Fueling the meteoric rise in Google's stock price, and a steady increase in the shares of rival Yahoo as well, is the increasing amount of time and money people around the world are spending on the Internet. Both Google and Yahoo charge for advertising in a manner that is extremely attractive to businesses, since advertisers pay only when computer users click on their ads. Advertisers can measure the effectiveness of ad spending on Google and Yahoo precisely, in contrast to spending on newspaper and television ads, where rates are based on the size of an audience and effectiveness is typically harder to gauge.

The soaring Google stock price follows a stream of announcements this week. Google opened new offices in Brazil and Mexico; launched Google Base; and was awarded a contract to provide free wireless Internet access in Mountain View, Calif., where the firm is headquartered. The free WiFi initiative gives Google the chance to test the impact of increased Internet availability on the number of searches while enabling the firm to target local ads more precisely.

Google principal Chris Sacca said in an interview yesterday that the WiFi venture, powered by low-frequency radio transmissions, will enable Google to experiment with various new products and services. The company is also bidding for a contract to provide free WiFi access in San Francisco.

"This is really motivated by our trying to stay ahead of the curve in how our users are going to be accessing our services in the future," Sacca said.

Google Inc. chief executive Eric E. Schmidt has sold about $350 million of his company's stock since its initial public offering, in August 2004.