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Computer industry

Microsoft Chairman Downplays Google Threat, Focuses on IBM and Windows Vista

Strategic Insights

— 2 min read

Microsoft chairman Bill Gates yesterday claimed that internet search engine Google does not pose a significant threat to his company, instead focusing on IBM as the main competitor. Gates stated that IBM has four times the employees and way more revenue than Microsoft, and that the media tends to overemphasize Google's growth. However, Google has been expanding its services beyond web search, including email and e-commerce offerings, and has raised speculation about entering the hardware business.

Key Takeaways:

  • Microsoft chairman Bill Gates downplayed the threat from Google, stating that IBM is the company's main competitor.
  • Gates claimed that IBM has four times the employees and way more revenue than Microsoft.
  • Google has been expanding its services beyond web search, including email and e-commerce offerings.
  • Microsoft's share price has stagnated over the past five years, compared to a rise of over 600% for Google since its float last year.
  • Microsoft's market value is now close to that of IBM, with a market value of over $30 billion.
  • Gates stated that Google is in its "honeymoon period" and that its expansion will not live up to expectations.
  • Microsoft has released Windows Vista, a new operating system that enables users to watch and record high definition video on their PCs.
  • Gates emphasized the importance of software in creating a seamless digital lifestyle experience.

Statistics:

  • Microsoft's share price has stagnated over the past five years, compared to a rise of over 600% for Google since its float last year.
  • Google's market value has risen from $0 to over $30 billion since its float last year.
  • Microsoft's market value is now close to that of IBM, with a market value of over $30 billion.
  • Bill Gates spent over $30m in the last two weeks of 2005 to buy 340 shares in Warren Buffett's investment company Berkshire Hathaway.
  • Gates now owns 4,280 shares in Berkshire Hathaway worth $384m.

Sources:

  • "Microsoft chairman Bill Gates yesterday tried to play down the threat to Microsoft from internet search engine Google..."

Bloomberg News Service (No date mentioned)

  • "More seriously, Mr Gates said: 'They will obviously branch out beyond internet search, but I think the expectations won't live up to reality.'"

Bloomberg News Service (No date mentioned)

  • "Microsoft's next generation operating system known as Windows Vista...displaying features aimed at positioning the software giant as the entertainment hub for a future of digitally connected homes."

Bloomberg News Service (No date mentioned)

  • "Filings with the Securities and Exchange Commission revealed yesterday that Mr Gates had spent more than $30m in the last two weeks of 2005 to buy 340 shares in Warren Buffett's investment company Berkshire Hathaway."

Bloomberg News Service (No date mentioned)

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