Google replaces Microsoft as second most valuable tech Co.

by Mark Tyson on 2 October 2012, 10:30

Tags: Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL)

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The value of Google has now surpassed the value of Microsoft according to stock market capitalisation figures. Sub one per cent movements in stock values in New York last night finally tipped the balance in favour of Google, valued at $249.2 billion, compared to Microsoft with a $248.7 billion valuation. (Apple is currently valued at $632.9 billion)

A report on Bloomberg Businessweek headlines the story as “PC Loses to Web”. Google started out as a search engine created by university students and now that search engine is the most popular on the web, controlling 66 per cent of the US search market. Google also make the world’s most popular mobile OS; Android, which powers 64 per cent of smartphones. Google’s income is mainly from online advertising revenue.

Microsoft also operates online businesses but these are relatively unpopular compared to rival Google offerings. Microsoft still makes most of its money from Windows and Office software on PCs. As Microsoft try and push into Google’s strong territories of web search and mobile operating systems Google has sought to create alternatives choices to Windows and Office. The two companies appear to be battling on many fronts. The way that Google’s and Microsoft’s share valuations are trending it looks like the market believes that Google is winning this war.

Google has had the advantage recently of backing industries that are growing. The most obvious examples are the smartphone, tablet, search and cloud computing markets which seem positively vibrant compared to the PC based market upon which Microsoft bases its core business. Microsoft has seen these Google successes and tried to make a move but earlier movers always have an advantage.

Microsoft has come from behind before, notably with the Xbox series of games consoles, in a very competitive market. With strong hardware, software and cloud offerings the Redmond, Washington based software giant has a good chance of taking over in some of the markets in which Google (or Apple) is currently the leader. Microsoft has a lot of product launches coming up in the near future, perhaps it will be able to retake second position again soon?

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Posted by TheNiceGuy - Tue 02 Oct 2012 12:24
I don't really care about who is better betwenng microsoft and google, I just want them to beat Apple, which I really don't like.
Posted by AlexKitch - Tue 02 Oct 2012 12:37
The bigger they are, the harder they fall.
Posted by aidanjt - Tue 02 Oct 2012 12:43
Yeah, about that. If Apple vanished overnight… would the world come to a crashing halt? The market can be really brain-damaged stupid sometimes.
Posted by TheAnimus - Tue 02 Oct 2012 12:58
aidanjt
Yeah, about that. If Apple vanished overnight… would the world come to a crashing halt? The market can be really brain-damaged stupid sometimes.
But would google? Very few businesses use google for anything important, many can not use gmail because of the advertising. Google search? So people end up having to try harder and take longer on Bing, no biggie.

Microsoft, well it wouldn't really matter, some 3rd party would patch the established software.

It's only really hardware firms which would cause that to happen.
Posted by aidanjt - Tue 02 Oct 2012 19:42
TheAnimus
But would google? Very few businesses use google for anything important, many can not use gmail because of the advertising.
Actually Google Apps for business does give you the choice of a fee-based service. And it's not exactly a rare thing for companies to be taking Google up on the offer either. But obviously they're nowhere near MSO/Exchange market share. But on top of business, there's also a very large number of consumers who depend on Google for communications. They'll probably get around to switching at some point, but again, not without disruption and loss of data in all likelihood. Kinda one of the reasons I'm opposed to ‘cloud computing’ (*gag*) in general to begin with.

TheAnimus
Google search? So people end up having to try harder and take longer on Bing, no biggie.
There's a big productivity impact from everyone having to deal with a lesser search engine and doing more scrolling and keyword changes, and that'd be for the ones who know about them. Changing to Bing or DuckDuckGo or whatever would hardly happen overnight. For a very non-trivial number of people, ‘Google = The Internet’, even using it to finding websites they frequent because they get confused with all the .com, .net, .org, .co.uk, etc. DNS TLDs. For those people, they'd be well and truly screwed if they load up their browser and get ‘google.com can not be found’. Eventually they'd adapt as their clued in friends and family changes their default browser home page, and show them the ropes, but it'd be very painfully disruptive.

TheAnimus
Microsoft, well it wouldn't really matter, some 3rd party would patch the established software.
You can't seriously be suggesting that binary mangling is going to be a viable method of maintaining the code bases of Windows, Office, Exchange, IIS, SQL, etc.? And would you really trust 3rd party mangled binaries? And will end-users be using the same mangled libraries as you, etc.? Yeah eventually companies and consumers would move all their computing off the Microsoft platform, but it'd be far from pain free.

TheAnimus
It's only really hardware firms which would cause that to happen.
Reintegrating components from other manufacturers isn't that big a deal in a lot of cases as even packages are completely standardised for important stuff. I mean I agree if a big player like Intel or Samsung vanished that'd be pretty shocking, and prices would obviously surge, but manufacturing would be ramped up by other companies in no time flat to snap up all that new market share and heightened prices and after a few months things would settle down again. There's very little in the way of vendor lock-in in the hardware world, even changing RAID cards would at worst require a little machine downtime to swap out the last backup HBA with one from another company, recreate the array, and restore from a backup. And if you're not running a mickymouse network, it'd be no disruption at all for end-users.

But all this gets away from the point, besides a lot of Apple cultists hurling themselves off bridges, which may raise the global IQ somewhat, and the rest of the Apple drones not being able to buy music from iTunes, Apple disappearing wouldn't really effect the world in any significant way. Losing either Google or Microsoft on the other hand would be hugely disruptive. Their real value to the world is much greater than the market has derived. Not because they made the ‘wrong’ choice from an investment standpoint, it's simply because the investors idea of value isn't based on practical utility for the world, but rather fiscal returns for themselves. Practical utility is just sometimes a nice side benefit.

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