Google and Microsoft Financials
Strayer University Assignment 5 Financial management Bus 508 Google, aleader internet information searching, challenged big manes internet technology.Compare contrast Google's business model financial management Micrsoft's, launched Bing
Google and Microsoft financial and business performance
The increase in internet users and technological advancement has made Microsoft and Google record increased number of customers. The success of any company will entirely be dependent on the financial position and financial records it pose. "With intense competition, managers and stakeholders have to develop and adopt strategies that ensure growth in market share and growth in the profits" Foley, 2008.
Google is one of the companies that has recorded growth in performance and increased the number of users within the shortest period. It is also important to note that the company was not adversely affected by the economic recession that hit companies across the globe.
Discussion
In analyzing the financial performance of companies, financial ratios are used. Ratios can be classified into profitability ratios, liquidity rations, gearing ratios and valuation rations Porter, 2009.
These ratios are used in determining the soundness of the financial statements of a firm. The ratios of Google and Microsoft have been calculated and comparison and contrast undertaken to explain their financial performance. Both Google and Microsoft are both companies in the internet industry. These two companies are major competitors who have to compete for their target marker who are the internet users. The duo therefore has to ensure that their services and products compete favorably in order not to incur losses.
One of the core sectors where competition has to be immense is the innovation sector. Innovation is the creation of new knowledge or idea with the objective of improving efficiency and effectiveness. Google Corporation has outperformed Microsoft in the creation of new technology and successfully launched new products. Google maps, satellite photos, video search files and other innovation have worked in favor of the company. Microsoft on the other hand invests vast amounts of resources in innovation. Despite this investment, Microsoft has recorded significant loss of their staff that have moved and joined their competitor firm. The simple user interface of Google has also made the company preferred by the internet users Lowe, 2009.
Moreover, the growing number of internet users together with the advancements in technology makes innovation mandatory in the industry. Innovation and new product development is thus a core determinant in the financial performance of the companies.
Google, the leading search engine, has engaged in diversification strategies and started developing software. Diversification has therefore increased the revenue sources of the company. Some of the areas that Google has diversified its operation include wireless internet, operating systems, and e-commerce. The close monitoring and interaction with the internet users has allowed Google to develop user-friendly services and products that are supported by the diverse internet users Lowe, 2009.
Google has remained committed to providing products that other web users can use support business adverts and that. Robust innovation supported the growth and defensive strategy of Google Corporation. This posed a threat on the existence of Microsoft. To respond to the losses likely to arise, Microsoft reduced their units from seven to three as a way of reducing costs and making the company agile and competitive Foley, 2008()
Google and Microsoft core businesses
Both Google and Microsoft are in the tech industry. The two firms have engaged in the provision of software and search engines where internet users get the opportunity to get information of their interest. Google has posed a threat and challenged Microsoft in the technology industry. Both Microsoft and Google have competing products in as much as they have diverse core businesses. Whereas Microsoft main business is the provision of windows operating system for the PC and dominates in the desktops, Google main service is the provision of search engines that also displays adverts. Microsoft enjoyed monopoly status, which made the corporation realize large amounts of profits and it still enjoys monopoly in the selling of operating systems of desktops Rittinghouse & Ransome, 2010.
Google continue to experience growth in the technology sector specifically on the web. The company is the main provider of software that is used by businesses for advertisement and other information search. Google has further engaged in collection of their users' data and records to enable them increase their share in the industry.
The leading web provider, Google, makes its profits from the advertisement...
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