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Google Passes Microsoft’s Market Value as PC Loses to Web
- bencxr 14y agoYet another "market value defines losing/winning" article between 2 products that don't even compete.
- drhowarddrfine 14y agoYou're right. Microsoft can't compete with Google. If the two didn't compete, Microsoft wouldn't have search and Google wouldn't have an office suite or an operating system or a browser.
- JumpCrisscross 14y agoWeak 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 14y agoIt'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 14y agoyes 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 14y agoIt 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 14y agoThey 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.
- JumpCrisscross 14y 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 14y agoI guess search is a business after all :)
- YokoZar 14y agoAlternative 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.
- mtgx 14y agoGoogle's long time dream of becoming a bigger company than Microsoft is becoming real.
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- cma 14y agoThey haven't quite done it on a dividend-adjusted basis yet though.
- martythemaniak 14y agoI 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.
- malandrew 14y agoDon'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 14y agoAnd Glass, and Fiber, and Android, and whatever else GoogleX might be working on......Google is quite diversified in its strategies.
- malandrew 14y agoOh yeah, forgot those too. I'm especially bullish on Fiber. I made this comment about Fiber a few weeks ago: This isn't about bandwidth. It's about content. The only thing standing between YouTube and the CableTV providers is bandwidth. If Google cracks the bandwidth nut, they can essentially replace TimeWarner, Comcast, etc. in one fell swoop because they can easily replace 100% of the services those companies offer at a fraction of the cost. ... http://news.ycombinator.com/item?id=4491695 http://news.ycombinator.com/item?id=4491695
- josh2600 14y agoI think that you're ignoring the reality of getting into the telco business. Google is hardly the first company to jump into the bandwidth market, but without the corporate welfare they got in KC, they wouldn't have been able to build their network. The reality is that as long as we have privately owned and operated metro networks, google's bandwidth access will be limited to the few metro areas that consent to their access requirements (and that's assuming the big telcos aren't able to successfully lobby against this incentive, as they've been successful in doing in the past). The answer is publically owned, and privately operated metro networks. This is a dream that will never come to pass in America, and Google's ambition will remain just that: an unrealized dream. Sorry for being such a Debbie downer, but bandwidth in the US is a really massive problem that won't be solved by one search engine or one company. We really need a national reform effort.
- debacle 14y agoThat's something of a non sequitur, I would think.
- ChuckMcM 14y agoFunny 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.
- cooldeal 14y agoHeadline: Walled garden wins over PC plus Web.
- drhowarddrfine 14y agoThere was no question.
- Timothee 14y agoTiny 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? :)
- rbanffy 14y agoYou can blame NASDAQ for that, not Apple ;-)
- recoiledsnake 14y agoPC 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 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.
- r3m6 14y agoYep. Google is still a one trick pony when it comes to revenue: Advertising revenue in 2011 was 97 percent of Google's revenue!
- thurn 14y agoUp there with other one-trick ponies like Exxon Mobil, I guess.
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- jamesaguilar 14y agoIt'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.
- r3m6 14y agoEvery 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.
- jamesaguilar 14y agoThere are limits to the amount of due diligence companies should have to do to ensure that people know they are clicking on ads. Anyone who is interested in avoiding clicking on ads will easily identify Google's, or not see them at all via a software solution. For the rest, there's not much short of an acknowledgement overlay that will get the message across reliably (for text ads -- image ads are easier, but google doesn't have them).
- zmmmmm 14y agoIt'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 14y ago1) 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.
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