Google Surpasses Microsoft as Most Valuable Tech Company

Google now ranks as the No. 2 most valuable technology company, according to financial assessments today.

The uptick for Google was noted by the New York Times. Apple still reigns supreme among technology companies with its No. 1 market capitalization of $618 billion, followed by Google at $249 billion and Microsoft at $247 billion, according to Yahoo Finance measurements, which were taken near the close of the trading day.

Microsoft once was the top technology company for a while, but it got knocked off that pedestal by Apple in May of 2010. At that time, Apple's market cap stood at $222 billion with Microsoft at $219 billion. Now, according to financial market assessments, Apple's narrow consumer market hold is worth almost three times more than Microsoft with its diversified consumer and enterprise product lines and services.

Despite Apple's superior valuation, Microsoft still predominates in the desktop operating system world, with about 92 percent share vs. Mac OS at about seven percent, according to Net Applications' desktop data. However, that picture gets wholly turned over when comparing mobile/tablet OS stats, where Apple iOS use predominates at about 63 percent vs. Android at 22 percent. Microsoft's mobile OS, Windows Phone, isn't even listed in Net Applications mobile/tablet OS data.

Microsoft is attempting to address future OS demand and market growth with Windows 8, which will have a tile-based touch user interface for tablets and PCs that looks like the one used in Windows Phone. Projections from analyst firms such IDC have shown a general flattening of the PC market in the near future, even while growth takes off in the smartphone and tablet markets (see chart).

Chart: Worldwide Smart Connected Market by Device Type, 2Q 2012Description: The data in this chart comes from the following IDC Trackers: WW Quarterly PC Tracker, WW Quarterly Tablet Tracker, and WW Quarterly Mobile Phone Tracker. PC data includes Desktop PCs and Portable PCs. Tablet data does not include eReaders. Mobile Phone Data does not include Feature Phones. For further information contact Kathy Nagamine at Smart Connected Devices, Q22012, 2012Q2, PC, Tablet, Smartphone, IDC, Apple, Samsung, Galaxy, Nexus, Mobile Phone, notebook, tracker, 2Q 2012, smart phone, market, sizeAuthor: IDCcharts powered by iCharts

Microsoft's slip in valuation compared with Google represents even more of an uphill battle. Microsoft essentially competes with Google in one area, search-advertising, in which Google has long retained the No. 1 position. Even after Microsoft established a deal with Yahoo in 2009, in which Microsoft inserted its search technology onto Yahoo's sites, it still hasn't been able to catch up with Google. According to an August 2012 comScore report, Google hold 66 percent of total U.S. core search activity, with Microsoft trailing at about 16 percent and Yahoo at 13 percent.

Microsoft may be feeling other pressures with its search-advertising business, which has typically been a loss leader on the company's financial sheets as it pursued Google's lead. Microsoft's recent write-down of its aQuantive acquisition, as well as the recent loss of executive talent, has an Adweek article speculating that Microsoft is not long for remaining in the search-advertising business. Microsoft execs, though, are denying that speculation, according to the article.

About the Author

Kurt Mackie is senior news producer for the 1105 Enterprise Computing Group.


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