Google pips Microsoft to become number two tech firm and third most valuable US company
Investors are becoming more bullish on the growth opportunities ahead for Google, a company whose fortunes are predicated on the Internet
SEATTLE: For Microsoft, it was bad enough when Apple's stock market value surpassed its own in 2010. Now Google, a company that didn't even exist 15 years ago, just did the same thing.
On Monday, a slight bump in Google's share price and a drop in Microsoft's gave Google a market capitalization of $249.19 billion, just ahead of Microsoft's $247.44 billion. Google's market value also edged past that of Wal-Mart Stores, making it the third most valuable US company behind Apple and Exxon Mobil. Market value is determined by multiplying a company's stock price by the number of shares it has outstanding.
It was one more sign that the technology industry has entered what some call a post-PC era. Investors are becoming more bullish on the growth opportunities ahead for Google, a company whose fortunes are predicated on the Internet and, increasingly, on mobile devices and services.
Microsoft, meanwhile, has not been able to shake the view that its software business is still largely beholden, in one way or another, to the PC, a technology that is now looking stale next to younger, faster-growing devices like the smartphone and tablet. Microsoft's software business, though still highly profitable, is not growing the way it once was.
Microsoft once had one of the technology industry's highest-flying stocks, but its shares have stagnated over the past decade after many big investments by the company, especially in the consumer market, failed to pay off. Its Bing search engine is a big money-loser and a distant second in the market behind Google. Its mobile software business has been marginalized by Apple and Google with their iPhone and Android products.
Microsoft's Xbox video game business is a bona fide hit, but it delivers nowhere near the profits of venerable Microsoft franchises like Office and Windows. Brent Thill, an analyst at UBS, said that Microsoft had done a respectable job of delivering revenue and profit growth, but that the weakness of its newer products had clouded the company's future in the minds of investors.
"People have failed to give them a deeper multiple because everyone thinks they're on the downhill," Thill said.
Tony Imperati, a spokesman for Microsoft, declined to comment, as did Niki Fenwick, a spokeswoman for Google.
On Monday, a slight bump in Google's share price and a drop in Microsoft's gave Google a market capitalization of $249.19 billion, just ahead of Microsoft's $247.44 billion. Google's market value also edged past that of Wal-Mart Stores, making it the third most valuable US company behind Apple and Exxon Mobil. Market value is determined by multiplying a company's stock price by the number of shares it has outstanding.
It was one more sign that the technology industry has entered what some call a post-PC era. Investors are becoming more bullish on the growth opportunities ahead for Google, a company whose fortunes are predicated on the Internet and, increasingly, on mobile devices and services.
Microsoft, meanwhile, has not been able to shake the view that its software business is still largely beholden, in one way or another, to the PC, a technology that is now looking stale next to younger, faster-growing devices like the smartphone and tablet. Microsoft's software business, though still highly profitable, is not growing the way it once was.
Microsoft once had one of the technology industry's highest-flying stocks, but its shares have stagnated over the past decade after many big investments by the company, especially in the consumer market, failed to pay off. Its Bing search engine is a big money-loser and a distant second in the market behind Google. Its mobile software business has been marginalized by Apple and Google with their iPhone and Android products.
Microsoft's Xbox video game business is a bona fide hit, but it delivers nowhere near the profits of venerable Microsoft franchises like Office and Windows. Brent Thill, an analyst at UBS, said that Microsoft had done a respectable job of delivering revenue and profit growth, but that the weakness of its newer products had clouded the company's future in the minds of investors.
"People have failed to give them a deeper multiple because everyone thinks they're on the downhill," Thill said.
Tony Imperati, a spokesman for Microsoft, declined to comment, as did Niki Fenwick, a spokeswoman for Google.
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