Eight years after going public, Google's (NASDAQ:
) market cap has surpassed Microsoft (NASDAQ:
). This impressive feat was accomplished after a summer of gains.
Since June, shares of the search engine giant have grown by more
than 35 percent. The company was expected to take a dive after
) announced that it will no longer feature YouTube and Google
Maps as default apps in iOS 6. After a
to replace the latter, however, Google has reclaimed the
During the first quarter, shares of Microsoft rose more than
20 percent. The stock has tapered off since that time, with a
six-month low achieved on June 1. Microsoft quickly rebounded,
but continues to experience minor fluctuations in its share
Analysts continue to argue over whether or not Apple -- the
world's largest company -- will become the first trillion-dollar
corporation. While the Mac maker faces an unprecedented level of
scrutiny from investors who are wary of its future, Google seems
to have finally hit a place of steady growth.
Google's success is an interesting mix of innovation,
reiteration and refinement. The company makes the vast majority
of its money from advertising, a business it cultivated just by
building a superior search engine. Through search -- and the
gradual implementation of other Web-based products such as Gmail
and YouTube -- Google has been able to increase its traffic,
retain visitors and expand its worldwide reach.
Google has benefited greatly from its mobile strategy. The
company got into mobile
it became an important computing platform. By inking a deal with
Apple and introducing its own mobile operating system, Google.com
and Google Maps quickly took over the world of smartphones. Now
that Google Chrome is on iOS and Android, its mobile browser
might do the same.
In July, Google released its first branded tablet -- the Nexus
7. Featuring a seven-inch display and $199 MSRP, the Nexus 7 is
regarded as the
premier Android tablet
Google is unique in that it can afford to stumble. While the
whole world seemed to be disappointed by the fact that the iPhone
5 (Apple's flagship product) only sold
five million units
, no one cared that
Google TV flopped
. No one seemed to notice when Google quietly backed away from
the Nexus Q, an overpriced
. Google's music initiative is trailing iTunes, Pandora (NYSE:
) and Spotify, but investors do not appear to be worried.
For better or worse, Google is able to get away with these
mistakes because its core business is very strong. The Android
maker is not impervious; many worry that with the shift to
mobile, Google's revenue will be reduced because the company
makes more money selling desktop ads. Nonetheless, its strength
cannot be denied.
That said, Microsoft is not to be underestimated. While many
critics believe that Windows 8 represents the company's biggest
gamble yet, the truth is that Microsoft has always taken gambles.
With every new version of Windows, the company has made at least
one change that users disliked. Regardless, people still
upgraded. They got over their discomfort and made the best of
what was available.
Windows 8 represents a change for the company -- and the
entire industry -- because it is truly the first and only
operating system developed for tablets and PCs. It will be a few
months before investors know if this strategy is successful.
Even so, at the rate that Google is growing, it may be
impossible for Microsoft to gain a significant lead over its
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