“As has been duly noted elsewhere, Apple passed Google in total market cap,” Peter Burrows reports for BusinessWeek.
Related MacDailyNews articles:
• Apple again worth more than Google – July 22, 2009
• Apple now worth more than Google – August 13, 2008
Burrows continues, “At the close of the day’s trading, AAPL is worth $147.56 billion, while GOOG is worth $144.2 billion… That’s already bringing plenty of mano a mano comparisons as to which company is better situated for the future. [Google CEO Eric Schmidt’s] departure might have led to gradually changing perceptions about the heat of this rivalry, the fact that Apple overtook Google in value so soon after will only accelerate the trend.”
Burrows wonders, “So have we just witnessed a real changing of the guard for the No. 2 spot on the list of tech’s most valuable companies? Is Apple now the nearest rival to Microsoft, which remains far ahead with a market cap of $208.69 billion? Or is this a short-term phenomonon [sic]?”
Full article here.
MacDailyNews Take: This is the second August in a row where Apple’s value exceeded Google’s. Only time will tell if Apple can keep it ahead; with iPhone’s gigantic future revenue potential — along with Mac sales that continue to outgrow the PC industry as a whole — becoming apparent to more and more investors with each passing day, Apple has a shot at staying ahead of Google’s market cap. And, Microsoft is actually not that far ahead; not given how rapidly Apple’s market cap has been known to change vs. how stagnant Microsoft’s is by comparison.
I could care less about market cap, I just want them to continue making good products and take care of their customers like they re now.
If Apple continues to build “insanely great” products, people will always come to Apple.
Really big giant with a really small [PC] realm. Reminds me of the dragon from “The Hobbit”. Except steeling this dragon’s golden trade secrets sounds a much more dangerous proposition.
Psystar your thoughts?
Can someone educate me a little about market cap? I mean, if Apple were to buy, say, Netflix or Adobe (I’m just hypothesizing… don’t go cramming the thread with hate), would that company become part of their market cap or would their cap diminish by the amount they spent on the acquisition? And obviously their stock would rise or fall some depending on how people viewed the acquisition…
I thought Cisco was still up there as well. Guess I’m mistaken…
From the graph in the article, and the back MDN articles referenced, it seems that AAPL and GOOG have been trading the lead for a few months.
Report back when the lead becomes bigger and does not change for several quarters. Then it will be worth analyzing.
Right now you are just reporting market noise.
#2 Market Cap. With that and an iPhone you can make a phone call.
aka Christian:
It would depend on how Apple were to acquire that other company. If they were to spend some of their own cash (now around $30B), it wouldn’t directly affect market cap, other than what the perception of the stock value would be after such an acquisition (i.e. if the investors would start dumping AAPL stock, or accumulating it, lowering or raising its price in the process). If it were to be through some stock swap, the total number of outstanding shares may change, and market capitalisation may be affected as a result. But not by much, though.
@ aka Christian
Market capitalization (cap) = price per share * (multiplied by) the number of outstanding shares.
If a company, like AAPL, buys another company for cash, then the number of outstanding shares would not change. However, Wall St. would react and the price per share would likely change.
If the acquisition was made with a stock swap, then the number of outstanding shares might change, and that new number of and any Wall St. reaction would affect the market cap.
To directly answer your question, yes, the acquisition would be added to AAPL’s market cap. However, Wall St. has the final say on the value.
Hope this helps.
Actually if Apples market cap grows bigger than Microsofts, and stays there, it could be a real stock value changer.
It would point out just how close in size Apple is to Microsoft. And when the GIANT is no longer so big, maybe people will see how the giant is really been shrinking all along.
could be a real game changer.
Just a thought. en
@bildad
You mean you couldn’t care less.
I should also add that AAPL’s cash on hand goes into Wall St.’s calculation of how much the stock is worth. Spend that cash on an acquisition, and the stock price will be recalculated.
All these explanations are simplifications, the stock market is a complex, interconnected system, colored with emotion.
It is no surprise that Apple is now worth more than Google. The latter was always a play based on hype. It makes most of its money off advertising, while Apple sells a broad mix of products. Apple has higher revenue and higher profits. What’s Google offering that will make it MONEY?
As to Microsoft being “far ahead”, that’s a matter of perception. Just consider where Microsoft was ten years ago and today (hint: market cap is way down), and the same for Apple. So looking at the numbers and trend lines, Apple is behind, but coming up fast.
Google is not a technology company. It is an advertising company that pretends to be a technology company.
Ever tried Google apps? Yikes!
Google is no friend of Apple. In Google’s world both Apple and Microsoft are irrelevant.
qka and Predrag: Thank you, folks.
I have learned more about the stock market, its workings, the impact of analysts, and so on, by reading MDN than I have ever learned anywhere else. I appreciate getting the education.
Given how much Apple and Google an fluctuate in shareprice, it’s inevitable that they will crisscross any number of times.
Especially, since Google only has one revenue source, ad-based, and that is driven by macroeconomic factors. Apple like all retail businesses is driven by macroeconomics, but not to the same extent as Google.
All Google has at this point is organic growth. They haven’t been able to add a single significant revenue stream in the last ten years.
On the other hand Apple is inventing or re-inventing whole industries every few years. Looks to me like Google is a blue-chip (the Yellow pages for the 21st century) whereas Apple is still a real growth stock. Which is worth more to an investor?
I don’t get it. What are they guarding?
Seriously, if someone had told me this would happen even five years ago I’d have told them to take their meds.
It used to feel like Apple would NEVER catch Microsoft in market cap. I would not say it feels inevitable now, but I just wouldn’t be shocked to see it happen in the next five years.
Go Apple!
(the only thing that sucks is that I had to sell some Apple at $89 a few months back to buy a business. I knew it would double fairly soon, but I needed the capital. Damn it!!!)
By January earnings MSFT’s market cap will be under $200 Billion.
My price target for AAPL at the same time is $7.00 below that needed to match MSFT. I think it is very realistic to expect Apple to surpass MSFT by July earnings 2010.
The quickening is coming. There can be only one.
“That’s already bringing plenty of mano a mano comparisons as to which company is better situated for the future.”
Apple. Google only has one significant revenue stream—advertising—and it’s not subject to control by them. Diversity equals flexibility equals strength. Google could try to monetize their various apps, but would they retain their popularity if they weren’t free?
41.4% difference and closing. Assuming M$ treads water in terms of market cap, Apple will surpass M$ when AAPL reaches the $230s.