Microsoft beats Google to become world’s third largest company

Satya Nadella has led Microsoft to third place in the most valuable company list

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Microsoft has surpassed Alphabet, the parent company of Google, in the market capitalisation for the first time in three years, becoming the third most valuable firm after Apple and Amazon globally.

According to a report in Investor’s Business Daily late Tuesday, Microsoft is also hot on the heels of Amazon, the second largest company in the world – sitting at $782 billion (£588 billion). At the top of the pack is Apple – which, with a market valuation of $923 billion (£694 billion), isn’t going anywhere soon.

As The Verge points out, Google generates around 90% of its revenue directly from advertising, and 60% of Apple’s entire revenue is also attributable to iPhone sales which could see billions wiped from its valuation if sales slow.

Microsoft, however, has grown much of its business through hardware, software and services. In its latest earnings report, Microsoft’s Windows, Surface and Xbox divisions chalked up to around 35% of its revenue. Cloud services clocked in at around 30% and Office and productivity solutions at another 30%.

“We are innovating across key growth categories of infrastructure, AI, productivity and business applications to deliver differentiated value to customers,” Nadella said. Office commercial products and Cloud services revenue increased 14 per cent – driven by Office 365 commercial revenue growth of 42 per cent. The Azure cloud offering had 93 per cent revenue growth. Revenue in Productivity and Business Processes was $9 billion and increased 17 per cent in the quarter.

 

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