Feature: Blogging Google

Google Now Worth More Than Microsoft

Author: Adi Gaskell
Published: October 02, 2012 at 5:38 am

google sharesMicrosoft have been the technology bellweather for as long as I can remember.  The huge revenues they have generated from their Windows and Office cash cows have ensured their valuation has remained consistently high over the past few decades.  So when a relative upstart becomes more valuable than them it's a pretty big deal.

And that is exactly what's happened this week.  Given the dominance Google have over the search engine world, and by proxy over the search advertising market, you may be forgiven for thinking they'd have overtaken Microsoft in value long ago, but alas that milestone was only reached this week.  It means that Google is now the second largest technology company (after Apple).

It's a telling blow for Microsoft, who have fought Google for several years without ever making the same success of their online projects as they have with their desktop products.

Google rose 1 percent to $761.78 at the close in New York, gaining a market capitalization of about $249.9 billion. Microsoft, the world’s biggest software maker, fell less than 1 percent to $29.49, for a valuation of $247.2 billion.

It marks the growth of the web as a delivery channel for software and computing products that were once the preserve of Microsoft via their desktop dominance.

“The PC hardware business is obviously struggling,” said Martin Pyykkonen, a Greenwood Village, Colorado-based analyst at Wedge Partners Corp. “The transition here is pretty straightforward in terms of where things have moved to and certainly that’s cloud, that’s Web.”

Both remain some way behind Apple in top spot however.  Apple closed the day valued at $618.1 billion.  Considering they themselves passed Microsoft as recently as 2010 it shows the astronomical growth in their share price in the intervening months.

Google do however face similar challenges to Microsoft.  Where Microsoft failed to transition between desktop based software and Internet based services, Google are facing similar challenges with social networks.


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Article Author: Adi Gaskell

A writer on management issues for publications such as Professional Manager, CMI, HRM Today, Business Works and Technorati. I also cover social media for Social Media Today, DZone and Social Business News.

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