When Will Google Pass Microsoft?

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I blogged an outrageous prediction a few months ago (it ended up being my most popular blog ever) that Google would pass Microsoft in market cap within 10-15 years. Yesterday I saw a CSFB report showing Google’s revenue will grow from $2.9 billion in 2004 to $4.3 billion in 2005. Meanwhile, Yahoo Finance shows Microsoft with revenues of $32 billion in 2003 and $36 billion in 2004.

So I had to do a little spreadsheet exercise. If Microsoft’s revenue continues to grow at 12.5% and Google’s at 48.28% then when will Google pass Microsoft in revenue?

Answer. In 2013

Google would have revenue of $100 billion compared to Microsoft’s $92 billion.

But this is silly, because we all know Google’s revenue won’t keep growing by about 50% per year. But I would also project that with all the competition from Open Source and elsewhere, that Microsoft may not maintain a 12.5% growth rate. In fact, is it possible that their revenues may some day actually decline!

I’m working on a paper that documents all the business model advantages that Google has over Microsoft and others for that matter. I’m extremely bullish on Google. Someone speculated recently that Hotmail is dying and someone else calculated that Google’s revenue from embedded email ads could pass its revenue from search ads.

Some of my own Google ad campaigns show a lower “cost per sale” from Google’s contextual ads than from their search results ads, which has surprised me.

I’m a huge fan of the way Google’s founders control voting rights over all other share holders, because I think it will allow them to run the company more smartly than other publicly traded companies, including Microsoft. They can always make decisions that are best for the long term.

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