The world is changing and that applies to–and to a large extent is caused by–massive transformations in the technology sector. A good example of this transformation was seen in the stock market yesterday when Google (GOOG) ended the day with a larger market cap than Microsoft (MSFT). Midday on Tuesday, at least, the tide had changed at least briefly– Google currently has a market capitalization of $246.44 billion (US) to Microsoft’s $248.00 billion. This will fluctuate over the next few days depending to the stock valuation of the two companies but regardless of the exact pricing levels the significance of this occurrence is still the same: Google dominates the tech world today in much the same way Microsoft did in the 1990′s.
The growth of Google relative to Microsoft has even larger implications–it is indicative to systemic changes within the tech world. Simply put, what Google does is more important to and reflective of how the masses use technology today than what Microsoft does. Microsoft became a power due to their control of the PC desktop via the Windows operating system and the desktop PC is losing relevance. Even laptop computers are losing ground to tablet PC’s and smartphones. A secondary Microsoft profit are is office computing via Microsoft Office and more and more people are using open source products like Open Office and web based equivalents.
Google, on the other hand, controls the web and the content within it and that’s where the power is today. They dominate search, which allows users to access the content and media on the Internet. At the same time Google’s advertising programs not only allow them to turn a profit but allow content creators and owners to monetize their assets. And Google’s dominance doesn’t end there–they’ve got their hands in countless web based services like GMail and YouTube and they’re having great success in smartphones with the Android OS. The Google branded Nexus 7 tablet is very popular and helping the company finally gain traction in tablet computing.
Microsoft is having a hard time maintaining relevance in the current technological paradigm. They’ve struggled for a long time to gain traction in search although their Bing search does have fans. Their struggles in the mobile OS marketplace are legendary with a series of failures. They’re now trying to get into the tablet game and although the Surface tablet OS has promise it has little more at this point. They’re having a hard time keeping their legacy PC products relevant with countless alternatives available for Internet Explorer, Office, Outlook, etc.
Google should continue to grow over the next few years while Microsoft is desperately trying to maintain marketshare. Google continues to innovate with revolutionary products while Microsoft is, to a large extent, playing catch up. History demonstrates that things can change quickly the the tech world and the decisions that Google makes today can determine whether they’ll be a growth company in the next decade or in the same boat that Microsoft finds themselves in.