Microsoft and Google Return to Basics
Microsoft and Google have lot in common than the dominance of their respective markets. Both have utilized their cash flows to pursue many side projects in order to move into wider segments.And neither of them have had much success.The recession has had a severe impact on their efforts. Google,just cancelled its print advertisement ambitions,and Microsoft have managed to sell its long-held stake in the cable operator Comcast.
Microsoft’s main expertise still in software – its operating system and other programs. These hold around 82 percent of its revenue and nearly all of its operating income. The company has used a lot of those profits to diversify into products like video games and online search,though they haven’t obtained much profit from these areas.
Microsoft’s Xbox game console just had had its first profit last year after being for nearly 7 years on the market.Microsoft’s online search effort has also not been very successful. Its MSN portal has a dismal 8.5 percent share of American search market, and the unit which holds it lost around $480 million last quarter.
Google makes virtually all its revenue from advertising related to Internet searches. Still, that has not stopped it from pouring money – and employee time – into online video, cloud computing and lobbying for renewable energy projects. Analysts say the video site Youtube remains barely profitable.The same goes for Google’s free online software initiative, in which it has invested a huge amount.
Source: Google news
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