Private Clouds: Google Inc (GOOG), Microsoft Corporation (MSFT), and Facebook Inc (FB) Need Not Worry

Google’s gross margin of 58% is well below that of Facebook Inc (NASDAQ:FB)’s 73%, but trumps the social networking giant’s operating margin of 10% with 25%. Microsoft, on the other hand, has a gross margin of 75% and an operating margin of 36%.

Google’s P/E ratio stands at 26.71 times, compared to Microsoft Corporation (NASDAQ:MSFT)’s 17.53, and Facebook’s 522.24. However, in terms of price to earnings growth ratio (PEG), which factors projected earnings growth rates, Google appears the cheapest among the three companies with a PEG ratio of 1.27 times, compared to Facebook Inc (NASDAQ:FB)’s 1.45 and Microsoft’s 1.46.

The bottom line

The NSA’s data monitoring activity has definitely cast doubt over the integrity of these three companies, along with others like AOL, Inc. (NYSE:AOL), and Yahoo! Inc. (NASDAQ:YHOO). However, the overall impact on revenue is likely to be insignificant considering that the companies have diversified portfolios, bar Facebook, which largely relies on ad revenue. Google is already getting into the smartphones and tablets business and, therefore, can easily hedge that risk, while Microsoft Corporation (NASDAQ:MSFT)’s ad revenue has had little impact on overall income. The probable shift to private cloud computing is also likely to be limited due to the high costs involved in setting such a platform.

Nicholas Kitonyi has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook, Google, and Microsoft.

The article Private Clouds: Google, Microsoft, and Facebook Need Not Worry originally appeared on Fool.com.

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