Why Google has blown past Microsoft as tech’s second most valuable firm

Google Market Cap Analysis

Microsoft CEO Steve Ballmer’s early critique of Android was that he didn’t understand how Google was going to make money from giving away software for other manufacturers to use. What he didn’t understand was that Google isn’t a software company so much as it’s an advertising platform company: The software it produces is just a means to draw in users and rake in advertising dollars. And now a new research note from Morgan Stanley shows us that Google is poised to become bigger, even now that it’s blown past Microsoft to become the tech industry’s second most valuable company.

Morgan Stanley projects that Google will actually add one percentage point to its total share of the global advertising market over the next three years, which Business Insider estimates will give it around a 6% share of all advertising revenues in the world. And keep in mind, we’re talking all advertising revenues everywhere in any medium, including television. This hold on the advertising market, aided by Google’s efforts in the mobile world, means that Google really doesn’t have to worry about making a profit from selling Android phones and may even give the flexibility to pump out super-cheap devices that it can sell at a loss if it figures out how to raise the cost-per-click rates on its mobile apps.

Source:
Business Insider
blog comments powered by Disqus