Google Flying Past Windows

Google's revenues have surpassed Microsoft's revenues from sales of Windows for PCs for the first time according to SeattlePI.com.

This major shift demonstrates that the computing platform is transitioning from the desktop to the web. Microsoft's Windows division reported revenue of $3.808 billion in the quarter ended June 30. During the same period, Google posted revenue of $3.872 billion. Microsoft's Windows has an operating profit of $2.8 billion or 74% profit margin while Google's operating profit was $1.1 billion or 29% profit margin. Microsoft is projecting revenue growth of 9-10% in the Windows division this fiscal year and Google has been growing at 60% so far this year.

Google, which did not exist when Windows was introduced, is powering ahead and innovationing in many areas that Microsoft once ruled. Microsoft as a company still generates more money than Google, $50 billion versus Google's $14 billion. However, what is significant is Microsoft makes most of its money from licensing software while Google makes most of its revenue from advertising. Google is rolling out products that directly compete with Microsoft's core offering and a new generation of users are embracing Google's hassle free model where as Microsoft has had trouble making inroads into Google's strong hold in search and advertising.

Microsoft is trying to expand beyond its core Windows, Office and Server Tools business and into online services including search and advertising. Google is also making head way introducing onlines productivity solutions, mobile services, and data services that offer an alternative to Microsoft's offerings.