Google Passes Microsoft’s Market Value as PC Loses to Web

http://www.businessweek.com/news/2012-10-01/google-passes-microsoft-s-market-value-as-pc-loses-to-web

by joshma • 14 years ago

90 62 14 years ago

businessweek.com

mtgx• 14 years ago

Google's long time dream of becoming a bigger company than Microsoft is becoming real.

cma• 14 years ago

They haven't quite done it on a dividend-adjusted basis yet though.

martythemaniak• 14 years ago

I think Google has a kind of purpose and drive which will take it very very far.

They want to "organize the world's information", but that's less than half the story - an even bigger challenge is making all this information not only understandable and usable to humans but making it all work seamlessly together - a monumental task they are barely getting started at.

Unrelated (but necessary) they also seem to be doing very well at the organizational aspect of absorbing new ideas and companies and integrating them into themselves.

malandrew2• 14 years ago

Don't forget the work on self-driving cars. Once that becomes more commonplace technology, I think you'll see the stock increase dramatically. Every industry with the logistics of moving stuff from point A to point B not on rail could eventually be affected by the work they are doing. Once you can automate that you've effectively reduced tons of problems to automated packet-switching.

tsycho• 14 years ago

And Glass, and Fiber, and Android, and whatever else GoogleX might be working on......Google is quite diversified in its strategies.

kmfrk2• 14 years ago

There is a lot I don't like about Google, but Google Maps, Project Glass, and the automated cars are nothing but inspiring.

Just the fact that they transported us to other countries so everyone with an internet connection could go to Paris is laudable. And now they're going to explore the final frontier of Earth underwater.

After iPhone and iPad, like them or not, Google is the one of the "big" companies the most involved in inventing the future.

disordinary• 14 years ago

It's not laudable it's laughable, you want to go to Paris? Go to Paris.

nsmartt3• 14 years ago

Though Glass is amazing, it will give a whole new meaning to tracking user information.

As you get information regarding what you're seeing, Google is logging everything you see.

A map with with a line detailing everywhere you've been over the course of years. A video displaying everything you saw on your real trip to Paris or wherever else-- not based on what you saw that day, but based on the information Google has about that area, those landmarks, etc.

Privacy could cease to exist while you're wearing Google Glass.

debacle• 14 years ago

That's something of a non sequitur, I would think.

ChuckMcM• 14 years ago

Funny APPL has a market cap (624B) that is bigger than Google (248) and "wintel" (248 + 115 = 363) combined.

Seriously, that Google has lapped the larger part of what was the Microsoft / Intel juggernaut of the last century is notable of course, but I wonder if its the wrong question.

cooldeal2• 14 years ago

Headline: Walled garden wins over PC plus Web.

Timothee• 14 years ago

Tiny correction since I see this mistake often (and I was making it myself in the past): the symbole for Apple is AAPL, not APPL. Not intuitive like Apple is supposed to be, huh? :)

rbanffy2• 14 years ago

You can blame NASDAQ for that, not Apple ;-)

recoiledsnake3• 14 years ago

PC loses to Web ads is more likely.

I think Google's got better at getting people to click on ads. For example, one of the following is a search result and the other is an ad. How many people can differentiate between them on various monitors?

http://i.imgur.com/Wmdd0.png

I remember the time when Google differentiated itself by clearly marking ads, now it's no longer true for high value keywords.

r3m62• 14 years ago

Yep. Google is still a one trick pony when it comes to revenue:

Advertising revenue in 2011 was 97 percent of Google's revenue!

thurn• 14 years ago

Up there with other one-trick ponies like Exxon Mobil, I guess.

jamesaguilar3• 14 years ago

It's quite clear to me which is which just from the color differences. You also cut the "ads related mesothelioma (?)" at the top of the section, which should make it even more clear. And there's the fact that people who understand the difference have already learned where Google ads are on the page.

r3m62• 14 years ago

Every HN reader knows that. But "normal" web users do not know it (anymore?). Every so often I see some anecdotal evidence of that when I watch people doing searches.

recoiledsnake3• 14 years ago

The color contrast from the white background is extremely low #FFF8E7 vs. #FFFFFF and there's deliberately a lack of border. The color difference is almost invisible based on monitor settings and the age of the user.

I believe these are relatively recent changes, earlier the background was blue or purple. I guess Google "optimized" the color and appearance to gain more clicks.

nhebb• 14 years ago

I've noticed that when I'm on a laptop with a glossy screen, the difference in background colors are a lot harder to distinguish.

betterth• 14 years ago

Saying that the PC loses to the web is like saying that cars lose to the new highway.

Sure, maybe everyone is replacing their car with a motorcycle, but then the car is losing to the motorcycle, not the highway.

rbanffy2• 14 years ago

It actually makes sense.

The PC as a platform for running your applications and holding your data is on its way out, being replaced by the web. The PC, the box you run your browser on, will remain, but the applications you run will only see the browser on one side and their Unix-like OS on the other.

ajross2• 14 years ago

It might be easier to tell the ad from the search result if you hadn't cut out the part that reads, and I quote:

"Ads related to mesothelioma:"

Stop this trolling. You're quite simply lying to people with that kind of nonsense. It doesn't belong anywhere, much less here.

qq662• 14 years ago

I looked at the original search and while this text is there, and there's a colored highlight over the ads, I could imagine myself clicking the ad accidentally in a hurry, or someone less knowledgeable about the way Google runs Adwords to confuse the two.

recoiledsnake3• 14 years ago

Relax, why not post a full screenshot yourself? Sorry I am on a mobile device right now or I would, but the point is that the text you quoted is two ad results above. So while scanning results, it's easy to not notice the subtle background change between those two results. It's hard to see where the ads end and the results begin, that's why I highlighted the part between the ad and the search result.

If someone can post the full screenshot, please do.

mladenkovacevic• 14 years ago

It's worth mentioning that Bing ads are even less apparently demarcated. At least with Adwords there's a significant contrast created by the use of the yellow which human eyes are particularly sensitive to. I am looking at a Bing ad right now and I am really struggling to see where the ad ends and the white of the search results begins. Not to mention that Adwords has a "Ads related to {}" text along with an information icon next to that. Bing ads just have a small "Ads" in the top right corner of the ad (away from where the eyeballs are likely to be).

bencxr• 14 years ago

Yet another "market value defines losing/winning" article between 2 products that don't even compete.

JumpCrisscross2• 14 years ago

Weak signal given the size of the companies and their volatilities.

Let's observe the quoted, albeit stale, Google market capitalisation of $249.2 billion with a current vega-weighted mean implied volatility (market's opinion of what Google's volatility will be) of 31.12% and the quoted Microsoft market cap of $248.7 billion with an IV index of 22.51%. The question is, assuming these two Gaussian random variables vary independently [1], what is the probability that GOOG is still bigger than MSFT in one year? The answer is a hair above 50%. Plugging in $249.65 billion for Google and $248.02 billion for Microsoft (closer to present values) this probability rises closer to 51%.

Conclusion: insufficient evidence that this is more than random market jittering just yet.

[1] If this were more than a quick, stylised analysis I'd construct a covariance matrix or copula to describe the dependency structure. Given the razor thin odds, however, it is unlikely that correlation will help the OP's case too much.

paul• 14 years ago

It's still a rather remarkable milestone. In a relatively short amount of time, the #1 "unstoppable" company in tech was passed by both it's smaller competitor (Apple) and an entirely new company (Google).

veermishra0803• 14 years ago

yes indeed, i agree that many times, what people referred as Small Bubbles, create a Huge dynamic impact on the world. The same is the case with Google. And for Apple, only Hats Off :)

nostrademons• 14 years ago

It makes me wonder if both Apple and Google will, in a relatively short amount of time, be surpassed by a company that doesn't exist yet.

photon137• 14 years ago

They are not Gaussian random vars - a very dominant growth factor ("mu" as you would call it in a stochastic process) applies to both - which is higher in Google's case - without a doubt.

JumpCrisscross2• 14 years ago

"without a doubt"

I have, unfortunately, seen a great many things beyond the shade of doubt come back and bite people.

Note, too, that GOOG has a 9% higher beta than MSFT and that we are in a rising market. We cannot let our ex ante biases colour our attributions.

EGreg• 14 years ago

I guess search is a business after all :)

YokoZar• 14 years ago

Alternative headline: Google passes Microsoft's market value as Microsoft gives gobs of cash to shareholders rather than hold onto it to inflate market value.

Still, it's a significant thing I suppose. But we tend to ignore the cash position of companies in stories like this. If Google suddenly paid out 100 billion to shareholders tomorrow then it's market value would rightly drop by about 100 billion, but that wouldn't mean Microsoft was suddenly winning again.

zmmmmm• 14 years ago

It's funny to call it "PC loses to Web" when MS doesn't actually make the PC but the software that runs on the PC. Whether you use Google or Microsoft, you are using a "PC" in the terms of the article. One might say that it is more about a three way contest where MS is losing mainly to Apple, depressing their price down lower than Google, and Google is going up for other reasons.

To the extent it is about Google, this is really about commoditization of software : Google is commodotizing the whole OS into the (free) browser. They are commodotizing office software into free Google Apps. They are showing that if you do it at scale and over the web you can operate at such efficiency that you basically give people all this stuff Microsoft charges for and still make huge amounts of money from the advertising revenue, or you can have pay model where the costs are an order of magnitude less than what MS needs to survive in its current form.

jebblue• 14 years ago

1) PC stands for Personal Computer. It is not synonymous with Microsoft or Windows. Personal Computer.

2) The web is useless with out Personal Computers or personal computing devices such as smart phones so the web hasn't lost to the PC and the PC hasn't lost to the web, they need each other.

Google Passes Microsoft’s Market Value as PC Loses to Web

Related Stories