IBM Now Officially Worth More Than Microsoft 295
liqs8143 writes with news that IBM's market cap has surpassed Microsoft's, making it the second most valuable tech company. When the market closed on Friday, IBM was valued at $207.52B, while Microsoft was valued at $206.52B.
"At one point during the PC era, Microsoft's value climbed three times higher than IBM's. Apparently, this has been a long two decades in Armonk, N.Y., but Microsoft also is no longer the beast it once was. The guard is changing. Besides Apple, there is also Google. While Google is valued at about $170.59 billion, less than the other three, its $31 billion in annual revenue is half of Microsoft's $69 billion and less than a third of IBM's $101 billion. Waiting in the wings is Facebook, which has been valued in the private market for as much as $50 billion, on negligible revenue."
Re:First post (Score:5, Interesting)
First post - IBM ahead of MS? Big suprise considering OS/2 was such a flop in later years :p
Which is too bad, since OS/2 was vastly superior to Windows at the time. So much so, that OS/2 was the OS of choice in many applications where stability and security was important, such as ATMs.
Re:Name for DotCom bubble 2.0? (Score:5, Interesting)
How about 'Social Bubble', it sounds friendly too :-)
Re:capitalism fail (Score:5, Interesting)
The flaw is rooted much deeper. We're not comparing the revenue and industrial strength of companies anymore, we're comparing our expectations. Quite literally. The stock value of a company is tied to the analyst's expectations, not the money they earn. More bluntly, we're comparing whether we will find another idiot to sell those toilet papers to before someone notices their lack of value.
I guess it's obvious that a "honest" company that actually produces and sells goods cannot compete with this.
A couple of years ago I invested in a portfolio of alternative energy companies (top 1 or 2 in solar, wind etc.). ALL of these brought in tons of cash, consistently, quarter after quarter! Since then we had the GUlf of Mexico disaster and Fukushima, and the total amount of extracted oil has certainly not increased. And yet, I am down about 30% on my portfolio value.
After this experience, I learned that there's no point in investing based on fundamentals.
Do you have to be REALLY old... (Score:5, Interesting)
... to read the headline as "...IBM's market cap has once again surpassed Microsoft's..."?
Don't forget that IBM was a $70 billion turnover company (back when that was worth quite a lot) whose chairman regularly appeared at the shareholders' meeting and apologized for any inadvertent growth during the past year? That was because everyone knew if IBM grew any bigger the DoJ was committed to dismembering it as a monopoly.
At that point, there was no Microsoft.
IBM basically created Microsoft as a defence against the mortal strategic threat posed to it by the Apple Lisa. Yes, that's right: to protect itself against an utterly imaginary threat, IBM itself created the only serious competitor it would have for the next 30 years. Hmmm, maybe not as dumb as you might think... at least it got the DoJ off its back and onto Microsoft's...
Re:capitalism fail (Score:5, Interesting)
The question is whether someone will force you to invest -- i.e. whether the taxpayers will be made to bail somebody out for $50 bn. That has nothing to do with capitalism, and is just bad government.
There are other ways in which you can end up "forced to invest". An example is where you've got a company (or sector) that is so over-valued that pension funds feel they have to invest in it, otherwise they lag the overall market index. While the fund managers might know that the company is overvalued, there's no way that they're going to say it for fear of getting hounded out of their jobs. (This was one of the engines of the credit bubble.) Do you monitor every trade that your pension fund is doing? I know I don't; I have a real job to do. But what this does mean is that things can go badly wrong with your money.
The basic premise, that things can go wrong which you can do next to nothing about, remains the same. I just don't see that the conclusion you draw from it — that government is the problem — is sustainable. Nor would I say that government is the solution either; that would be foolish. Hanging 10% of all senior financial types on Wall Street from the lampposts of Manhattan to encourage the rest... I'm having problems seeing the down-side of that idea.
Re:capitalism fail (Score:4, Interesting)
Investors don't give Microsoft's earnings - past or future - full credit because the company has proven itself a spendthrift. They're like an idiot cousin any of us might have who hits it big in the lottery and can be expected to fritter it all away shortly. Except of course that they hit the jackpot every single day. Several times each day. It takes more foolishness than should be humanly possible to be reliably rid of that much excess. Somehow though, the company is gettin' her done.
Numbers on this scale are hard to grasp. To give you an idea of the scale of this foolishness, at a modest 8% APR the $7B [businessinsider.com] Microsoft has burned in their Online Services Division since it last turned a profit would return over half a billion dollars a year - forever. Five hundred and sixty million dollars a year interest is enough money to employ a small US town or a respectable city in India, China or Pakistan, full time for the rest of forever. Add the $8.5 billion they spent on Skype and the money from their other failed acquisitions [wikipedia.org] and it's enough money to migrate the entire US carbon-based electricity system to clean renewable next-generation geothermal energy over a decade just from the interest and have the principal and some capital growth left afterward too. Add the $100B in stock buybacks from the last decade that didn't achieve the goal of lifting the stock price and it's enough money to do those things, wire gigabit fiber to every US home, and fund commercially viable space exploitation too - without ever touching the capital. One Hundred Billion Dollars is the inflation adjusted price of The New Deal [wikipedia.org]. $100B is more money than the entire 2004 Gross Domestic Product of Pakistan when their population was 152 million souls and they commanded the natural resources of their 307,000 square miles of our planet.
All Microsoft has bought with that lost power is the right to throw more bales of money on that fire. It's sick. It's disgusting. It ought not be possible. It is possible though, and perfectly legal. That so many have done so little with so much is appalling. It's offensive. It's wrong. The stock market is not rewarding this behavior, which is right and good.
Re:Name for DotCom bubble 2.0? (Score:4, Interesting)
Facebook, damn that was sooo 2011! The "hard on" the Social Network movie has given the geek world today will eventually go limp. I'd say around the time MS does what it does best. Fuck all their partners when they least expect it, steal a sizable marketshare and borgify the general population.
They sink 240 mil into FB (salting its company value) and then FB lets MS implant their spies throughout the office, setup exclusive ad deals, and put a like button on Bing. Zuckerberg whose supposed to be this visionary doesn't even it coming.
- Take Nokia and factor in Skype. MS has made cell phone carriers obsolete.
- Take Skype and link it with MSN and Hotmail, build a FB import tool (which they could do in house). MS has made FaceBook obsolete.
- Take XBOX, Kinect, link it with PayTV, Skype and BlueRay. MS has just created an all in one black box that does everything for the home.
The history of the IT industry is about to repeat itself. Sell your shares in Apple if you've still gottem.