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Tech Wars – The Winners and Losers, Starring Microsoft and Google

Tech Wars – The Winners and Losers, Starring Microsoft and Google

As Microsoft announces the first quarterly loss in the company’s history, Google reports a boost in sales and profits.

On a day of mixed fortunes for two of the world’s biggest technology names, made headlines for completely different reasons.

After writing off some of the value of its online advertising business, Aquantive, computing giant Microsoft announced the first losses in its history. The advertising business Aquantive struggled to compete with Google, forcing Microsoft to write down the value of the company by $6.2billion (£3.94billion, 5billion euros).

This brought about a $492million loss in the three months until the end of June, compared with a profit of $5.9billion just one year ago.

It is the first time that the company has announced a loss since they joined the stock market in 1986.

By contrast, Google enjoyed an increase in sales and profits in the same three month period until June. It was the first results statement released by the search engine giant since the company’s takeover of Motorola Mobility Holdings (MMH).

Since the deal Google revenue had increased by 35% to $12.21billion for the period.

The same period also included the launch of the Nexus 7 tablet computer, which Chief Executive Larry page claimed had received ‘rave reviews’.

Unlike Microsoft, Google generates a huge amount of advertising revenue, through advertising based around its searches. The company also makes the popular Android operating system for mobile phones.

Excluding the Aquantive write off, Microsoft profits actually exceeded expectations, plus a slowing down of sales has been attributed to customers holding out for the forthcoming release of Microsoft Windows 8.

HitSearch Director Andy Redfern commented "There are lies, damn lies and statistics. Look deeper into the initial headline of this story and you will find a company still reacting to acquisition decisions made pre-world crash in May 2007.

"Microsoft paid the right price for Aquantive, pre-crash, with large businesses still spending heavily. The advertising world looked rosy, but post-crash advertising revenues fell; and the full effect has of that is finally trickling through to the company balance sheet.

"Looking beneath the headline shows that Microsoft is still a business growing at a great rate and the recent rolled out of Windows 8 will prove very popular. Google on the other hand still growing at stunning rate and people can expect that rate to continue next year as it monetizes aspects of its service that were once free; Google Shopping for example."

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