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Though it may come as a mild surprise to some observers who thought Google already held the honor, a recent article in the Los Angeles Times made it official: Google is now “Silicon Valley’s most valuable company,” surpassing Cisco Systems Inc., the former top-earner.

The news stemmed from the company’s release of its third-quarter financial results, which far surpassed expectations. Google’s reputation as a new-model profit-earner — on top of its reputation as the Internet’s best search engine platform — is now all the more secure.

But the most interesting part of the news is that most of this jump in revenue can be attributed to its text-based advertising platform:

Google’s profit jumped 46% to $1.07 billion on a 57% rise in revenue to $4.23 billion, propelled by simple text ads on Web pages.

Why is this big news? Since Google has struggled in recent years to come up with new products and services that allow it to reach more and more consumers in ever-differing ways, strong ad revenue affirms the fact that, indeed, Internet searches remain its primary strength.

“The leaders of the company worry all the time about things that they think are missing from the product lineup, or strengthening the management team, or competing in markets around the world. This is not a complacent group of people,” [Former Google board member and venture capitalist Michael] Moritz said Wednesday at the Web 2.0 Summit in San Francisco. “What has been wrought at Google . . . is an extraordinary marvel.”

Google is famous for its Web search algorithm. But the company has clearly figured out the right formula for profit, said Jackson Securities analyst Brian Bolan. He ticked off the highlights: strength in the search advertising business and in brokering ads that appear on partners’ websites; solid revenue growth; tightened cost controls despite continued rapid hiring.

… Even with higher expenses, Google continues to prosper because of its dominance in online advertising. Google handled 57% of U.S. search queries in September, up from 56.5% in August, according to ComScore Inc.

Google executives underscored their experiments with new ways to distribute ads, including in videos from Google’s YouTube subsidiary, in interactive widgets and on television through its partner EchoStar Communications Corp. They also highlighted success in selling ads on mobile phones, particularly in Asia — a possible prelude to an announcement of a mobile operating system or even the often-rumored “Gphone.”

Read the original L.A. Times article here.