Google's Market Value Now Greater Than Microsoft

Google's market value has topped Microsoft's for the first time in the history of the two companies. Right now, Google’s market value stands at  $249 billion, while Microsoft is at $247 billion, based on the companies’ stock prices.

Google is worth more than Microsoft on paper for the first time since Google splashed onto the technology scene in 1998, marking a financial milestone for the search engine company as it continues to grow.

Google's stock price rose 1 percent to $761.78 at the close of the stock markets in New York on Oct. 1, for a market capitalization of about $249.9 billion, according to a report from Bloomberg Businessweek. That's higher than the $247.2 billion stock valuation for Microsoft, which fell less than 1 percent to $29.49 per share, according to Bloomberg.

Among technology companies, though, both Google and Microsoft still trail Apple, which is ranked first in market valuation at $618.1 billion. Apple's valuation topped Microsoft's back in 2010 as iPhones and iPads began their marches to sales successes.

When Google was incorporated in September 1998, the fledgling company was all about providing better ways to search and find information on the vast and unsorted Internet. Today, Google is a powerhouse in a wide range of markets, from search to Android and mobile, tablets, advertising, high-speed Internet, cable television, application development and much more.

Google's rise has benefited from its choice of markets while Microsoft has remained tethered to its legacy in providing software for PCs. For Microsoft, that's been a radically changing path in the last decade as users have moved to laptops, tablets, mobile devices and other innovative ways to do their computing. Users still need software, of course, but they have been finding new ways of getting it and not always relying on Microsoft as they have done in the past.

“The PC hardware business is obviously struggling,” Martin Pyykkonen, an analyst with Wedge Partners Corp., told Bloomberg. “The transition here is pretty straightforward in terms of where things have moved to and certainly that’s cloud, that’s Web.”

Microsoft has also entered new markets over the years, including search with its Bing search engine, mobile with Windows phones and software, and the upcoming debut of its new Surface tablets in the still-growing tablet computing wars.

But there's been a big difference—as the hip young startup, Google, was able to change direction more nimbly to find innovative markets, then pounce and react quickly, giving it a huge benefit over the stodgy, mature and harder to turn glacier that Microsoft could be often in its history. That's not a bad thing for enterprise markets, where staying the course is often welcomed, but it likely hurt Microsoft in consumer markets where the company was initially slow to move toward an Internet future then to mobile opportunities.

Sometimes it's tough being a big, huge machine in a sea of darting, nimble, adventurous competitors.

The closest that Google came previously to going ahead of Microsoft in the market valuation wars was in 2007, according to an Oct. 1 story in The Financial Times.

"In the first flush of optimism that followed its IPO, investors nearly drove Google’s value beyond that of Microsoft in 2007," the story reported. "However, the stock later retreated as Wall Street grew worried that the company was pouring money into loss-making ventures such as the YouTube video site and Android mobile operating system in a vain attempt to head off a slowdown in search of advertising growth."

Google and Microsoft have been bashing heads in the technology markets for more than a decade. In September, Microsoft launched its humorous and catchy "Bing It On Challenge" that asked millions of Web searchers to break their longtime Google search habits and give the software giant's Bing search engine a new try. With the campaign, Microsoft is trying to get users to see the progress it has made with Bing and grow Bing's market share in the search wars.

Despite the new ad campaign, Bing sure has its work cut out for it to catch up to Google based on recent search engine usage statistics for the United States, according to the Web analytics firm ComScore. Though Microsoft's search engine usage in the United States increased slightly by 0.01 percent since June, Google still dominates Web search with 66.8 percent of the U.S. market, according to ComScore's July figures. Bing captured 15.7 percent of users, and Yahoo sites captured 13 percent of users. They are trailed by Ask Network sites, capturing 3.1 percent of users, and AOL, with 1.5 percent of the market, according to the figures. The numbers are for what ComScore calls explicit core searches, or those that exclude slide shows and contextual links in text.

About 17.7 billion overall searches were conducted in July by U.S. users, according to ComScore, which is an increase of 3 percent since June. Google search was used for 11.8 billion of those searches, an increase of 3 percent, while Microsoft search was used 2.8 billion times, for an increase of 4 percent. Yahoo search came in third with 2.3 billion searches, up 3 percent from June, while Ask Network was used for 548 million searches, an increase of 6 percent, and AOL was used in 264 million searches.

Yet despite the rankings change, there's no reason that Microsoft can't come back and once again overtake Google's market value in the coming months, according to a story in USA Today. That's especially possible due to a variety of new products Microsoft will unleash soon, including Windows 8 and its new Surface tablet computers.

"There's no reason Microsoft can't get back to No. 1," Andrew Lange, an analyst with Morningstar, told USA Today. "If Apple can do it, Microsoft can, too."