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Google beats Microsoft to Become World’s 2nd most Valued Tech Company

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Google has overtaken Microsoft to become the world’s second most valued company after Apple.

On Monday 1 October 2012, Google Inc’s share price increased marginally by 0.96% to $761.78 taking its market capitalization to $249.13 billion. Microsoft Corporation’s share price declined marginally by 0.91% to $29.49 which saw the company’s market capitalization move lower to $247.23 billion.

Google Microsoft Valuation

After a failed bid to sell the search engine to a reputed online company for a million dollars, Larry Page and Sergey Brin went ahead with the company’s IPO in 2004. Since then, the ad-funded search engine spiraled into attracting more than a billion unique visitors per month by 2011.

In 2011-12, Google introduced Google+, invested heavily in clean energy projects, hit a billion downloads for Google Earth, gave YouTube a new look and opened new regional headquarters in Paris among other initiatives.

Since the last few years Google has consistently been ranked in Fortune magazine as one of the best companies to work for. In a pioneering and unprecedented move in August 2012, Google announced its Death Benefit policy which aims to pay spouses 50% of an employee’s salary for 10 years after the latter’s death.

The company that started from a garage now has a wide range of products and business areas including online search tools, online advertisement services, publishing tools, cloud computing, social networks, software development, operating system for mobile and TV platforms, apps, smartphones and an upcoming fibre-optic broadband network in US.

Google is a relatively new entrant in the tech industry as compared to 1975 founded Microsoft, the world’s largest software maker. In 1999 Microsoft’s market capitalization peaked at $616.34 billion, much higher than Apple’s current value if appreciation in dollar is accounted for.

The company, founded by Bill Gates, has established a virtually unchallenged position in the PC OS market with Windows. Businesses worldwide depend on the company’s iconic Microsoft Office packages every day. Over more than 3 decades, the company has evolved from being a software developer to making PC hardware, smartphones, server systems, cloud computing and comprehensive business tools.

In the last 3 months Google’s share price has increased nearly 31.2% from $580.47 to $761.78. On the contrary, Microsoft’s share price has remained at relatively similar levels. In the beginning of July 2012, the company’s shares were trading at $30.56, marginally higher than its current price of $29.49.

Microsoft is on the verge of launching Window 8 later this month and investors are hoping that the launch will inject positivity in the NASDAQ listed stock. However commentators don’t seem to see the tech giant matching the momentum of Google and Apple.

Microsoft owned search engine Bing was launched in 2009 and has since then edged out Yahoo in terms of market share. However Google still holds a dominant position in the online search domain. comScore reported that 68.8% of all searches in August 2012 had results from Google while 25.3% had search results from Bing.

In recent years, Apple devices including tablets, smartphones, laptops and desktops have clawed their way into Microsoft’s market share as users of Apple devices do not use PC based operating systems and related software.

iPad, android tabs, mac, iPhone and other devices are changing consumer preferences and the need for smaller devices may very well have caught Microsoft off guard. Even in emerging markets like India, the findings that tablet sales have tripled could be eating away into PC sales, resultantly increasing use of android and iOS mobile based operating systems.

Despite the marginal movements with Google and Microsoft’s share prices, Apple remains the world’s most valued company of all time based on nominal prices. With a market capitalization of $618.12 billion, it is nearly 25% more valuable than Google and Microsoft combined.

  1. […] Monday Google overtook Microsoft to become the world’s 2nd most valued company after […]

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