Practical Ecommerce

Chart of the Week: Microsoft Dominates Google

Google released its earnings last week for the Sept. 30, 2009 quarter-end. The formal SEC filing will come this week, presumably.

For a ten-year-old company, Google’s revenues and profits are astoundingly high. The company last week reported quarterly revenues of nearly $6 billion and quarterly net income of roughly $1.6 billion. That equates to a 27 percent profit margin, which very few publicly-traded firms ever reach.

In fact, those profit margins put Google in the same league as, well, Microsoft. For the quarter-end June 30, 2009, Microsoft recorded a profit margin of 23 percent, rivaling Google’s 27 percent.

But, by almost every other financial yardstick, Microsoft remains a much larger and much more profitable company than Google. Comparing recent quarterly results, Microsoft recorded revenue of $13 billion to Google’s $6 billion. Microsoft’s quarterly net income was roughly $3 billion to Google’s $1.6 billion. As of June 30, Microsoft held roughly $31 billion of cash and investments, versus Google’s $19 billion. And Microsoft’s recent market capitalization (price of the common stock times the number of shares outstanding) was $236 billion to Google’s $174 billion.

Competing in the search engine market, Google dominates Microsoft. But comparing the financial strength of both companies, one could say that Microsoft dominates Google.

Practical Ecommerce

Practical Ecommerce

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  1. Tag44 October 20, 2009 Reply

    Microsoft is a giant in internet and computer business while Google is only providing services as a Search engine and other web related so definitely the earnings of Microsoft would be higher.

  2. eoschlotz October 22, 2009 Reply

    You ignored another little known technology company called "Apple" that just announced larger profit than Google. With only about 10% of the PC market they have a profit level over half of Microsoft’s. Oh, yeah, they do have a couple of other products that they excel at that Microsoft has tried unsuccessfully to compete with.

    I don’t think I agree that "by almost every other financial yardstick" Microsoft dominates Google. For instance, Microsoft has over twice the revenue and profit of Google but their market cap is only 36% higher. They have twice the revenue but only about 63% more cash in the bank. Where they dominate is the sheer size of their earnings. Google has come from nothing to half their size in 10 years. That is probably keeping some people at Microsoft awake nights.

  3. Kerry Murdock October 23, 2009 Reply

    All good points, eoscholtz.

    Thank you for the comment.

    Kerry M.
    PeC

  4. kimbie October 27, 2009 Reply

    Here’s one way to tell. One of these companies is so witless it doesn’t know what "Family Guy" is. The other is Google.