Google is bigger than Microsoft

The search engine giant continues its march

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published October 2, 2012 12:40 pm AEST

Eight years after going public, internet search giant Google, is now bigger than Microsoft for the first time. Google's market cap is now US$249 billion compared to Microsoft's US$247 billion.

There are several reasons why Google has overtaken Microsoft in size. It's no longer just the de-facto search engine for the web, but Google has expanded its range of services and products massively, churning out the Android operating system that powers many mobile devices, office productivity software, internet TV products and virtually monopolised online advertising – to name but a few.

The massive growth in mobile computing and the slow decline in use of personal computers (desktops, notebooks and the like), has seen Microsoft lose its dominance and Google's ascendancy. Microsoft still makes a large chunk of its revenues from its ubiquitous Windows operating system for personal computers and its Office suite, both largely tied to the use of personal computers. Its forays into mobile computing haven't exactly been market leading – Microsoft's smartphone operating system is tied to Nokia's mobile products that have a low market share compared to Apple and Android devices.

Microsoft's Bing search engine has yet to take any market share from Google as well. But there's potential for Microsoft yet. The company will release its latest operating system, Windows 8, later this month, and a version for smartphones is also due this year. Updated internet versions of its office products are in the wings, and its first tablet computer, called Surface, will launch on the 26^th October.

Google is not having it all its own way though, facing competition in search from Facebook, which has close to 1 billion users, and Apple's products, including the new iPhone 5, are eating into Android's dominance of the smartphone market.

Google, Apple, Microsoft are likely to be at the forefront of the next big trend in mobile gadgetry, but if history is any guide, it could also be a relatively unknown company rising to become the next dominant internet/mobile player, after all, its only taken Google 14 years to get where it is now.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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