Microsoft Corporation (MSFT) or Google Inc (GOOG)? Who’s Better?

On the other hand, Yahoo! continues to lose market share and its revenues keep dwindling: in the first quarter of 2013 the company’s revenues from display fell by 11%, while revenues from search declined by 9.7%. The silver lining of the company was its growth in operating profitability from 14% in Q1 2012 to 16.3% in Q1 2013. Most of the growth came from the company’s cut backs on traffic acquisition costs and sales and marketing costs. This might keep the company’s profit margin from sinking. But if it doesn’t come up with new ways of augmenting its core business in search engine, its revenues will continue to dwindle.

Another factor is that Google’s Network Members’ websites segment continues to grow and account for nearly 27% of its total sales in advertising. Bing and Yahoo! Inc. (NASDAQ:YHOO) are still far behind on this front, and if these companies wish to give a good fight to Google in the advertising business they will need to find ways of expanding this sector.

Another way of augmenting advertising is via smartphones and tablets platforms, i.e. the war between Android and Windows 8. Currently, Google still has the upper hand with nearly 52% market share, compared to 3.2% for Microsoft. In the past several months, however, there were some signs of growth for Microsoft. But entering into a market that is already dominated by Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG)’s OS will be very difficult for Microsoft Corporation (NASDAQ:MSFT).

I didn’t even look into the geographical parameters in which Google has a much stronger reach in Asia and other regions than Yahoo! or Bing do. So in terms of growth in other places outside of Europe and North America, I think Google still has the upper hand. Moreover, I didn’t even consider the new products that will come up in the near future, including Google’s glass.

I think that in the main sectors that I have covered, including advertising and search engines, Google Inc (NASDAQ:GOOG) still has the upper hand. Microsoft is still a great company that keeps dominating the OS in the PC markets, which will maintain its profitability and growth. But based on the above, I still think that Google has a much better chance of maintaining high growth than Microsoft has.

The article Is Microsoft Better than Google? originally appeared on Fool.com is written by Lior Cohen.

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