Financial Marketing | Google and Microsoft Business Model

1.Core business
Core business of any organization is simply the essential or the main activity carried out by the organization. Microsoft Corporation develops licenses and supports a wide range of software services and products through hardware design and selling. The company also delivers online advertising to its customer audience across the globe. 
Google Inc and Microsoft Corporation Business Model
The company’s core business is therefore to develop and market soft wares, hardware and services which will bring new opportunities with high convenience to the customers while enhancing the value of lives of the people.
Google Inc provides a variety of tools which help all kinds of businesses to succeed. With the company’s technologies which range from Google chrome to Gmail, the company aims at making it possible for the users to find the required information in order for them to get thing done. The company also offers advertising program which help businesses to find their customers. The main activity of Google Inc is to organize the information of the world to make it useful and accessible across the globe.
2.Leading products and/or services
Microsoft Corporation has many leading products include personal computers, phones, servers and other intelligent devices like server applications, tools for software development, desktop, tools for server management and video games among other many products. the products offered by Microsoft Corporation can also be categorized as business solutions which include Ms Office, Ms project, Live meeting, share point and one note, Developer tools which include expression web, visual studio and web matrix. MSN which include security essential and Microsoft Network, mobile comprising of smart phones and servers which comprises of Commerce Server, NET Framework, BizTalk Server and SilverLight among others.
Microsoft Corporation is also a leading company in the provision of cloud based solutions which provide the customers with services, software and content over the internet. The company also provides consultations and product solution services around the globe as well training and certifying integrator s of computer system developers. Google Inc has a variety of leading consumer goods and services in the market. These products are categorized as the web, mobile, media, social, specialized search, innovation and search. Google chrome, Google plus, Google search, Gmail and Google translate are some of the leading products offered by Google Inc. other leading products include Google alerts, Blog search, Google finance, Google News and Google groups.
3.Management/leadership style
Bill Gate was the co-founder of Microsoft Corporation. Autocratic and delegation style are the two leadership styles used in the company. In the autocratic style, Gate used control as his management practice. He has been working so hard to monopolize the software market with his obsession of checking up for every detail in the software market.  In the delegation style, Bill Gate and the entire Microsoft Company has been paying a great attention the recruitment of the people with the best talent into the software industry. The company looks for individuals with the ability to acquire knew knowledge quickly when recruiting its employees. The company also delegates authority to its managers for them to run the independent departments. Google Inc highly uses the delegation style of leadership. Since its inception, the company has employed over 30,000 employees across the globe with experienced management teams and team of technology professionals. The senior leadership delegates authority and duties to the employees who are highly trained and qualified in the industry. Just like Microsoft Corporation, Google has been using the autocratic style of leadership as a way of trying to get a command in the market.
4. Innovation track record
Microsoft Corporation has an innovation track record of being committed to accessibility. Since it was founded in more than 20 years ago, Microsoft Corporation has been highly focused in the making of computers which are easier to use. The company has been offering competitive advantage in all its technological innovations. The company has also been offering the rights time by strengthening IT through technology. Since it was established, Microsoft Corporation has had a technological strategy which has enabled business innovation. Google Inc has a track record in the provision of top Google products and services to its clients by using innovative web promotion and research and development. The firm has an international exposure in internet marketing and search engine optimization. It has also a track record in the provision of search engine. The innovative search technologies provided by Google Inc has been connecting millions of users across the world with daily information.  

Financial ratio analysis

Microsoft Corporation has a current ratio of 2.9:1 while Google Inc has a current ratio of 5.8:1. This indicates that the current assets of Google Inc are more able to cater for its short term liabilities than Microsoft Corporation. Google Inc is more liquid than Microsoft Corporation therefore able to withstand major recession than Microsoft Corporation.  Profitability ratios for Microsoft Corporation are higher than those of Google Inc. this means that Microsoft Corporation was more profitable than Google Inc during the 2011 financial year. Higher profitability means that the company may be able to survive during economic slow down.
Microsoft Corporation seems to be more risky than its competitor Google Inc given by the high debt ratio of 47.5% as compared to 19.9% in Google. Operating performance ratio for Microsoft Corporation is higher than that of Google Inc which indicates that Microsoft Corporation’s fixed assets were more productive during the 2011 financial year as compared to its competitor. Price/earnings ratio for Google Inc was higher than that of Microsoft Corporation which means that the investment in Google Inc has high values than those of its competitor. In general, Microsoft Corporation is better able to withstand major recession than Google Inc. Microsoft is in a better financial performance than Google hence able to withstand recession.
Profitability ratios
Profitability ratios are used to measure the ability of a business or company to generate income in comparison to other costs and expenses. The return on assets for Google Inc is 14% and return on equity is 17.53% while the return on assets for Microsoft Corporation is 19.8% and return on equity is 34%. The return on equity of Microsoft Corporation is higher than that of Google Inc an indication that Microsoft is more efficient in the utilization of its equity and has better return to its investors than Google. This information will encourage investors into the company as they are assured of good return for their investment. The Return on assets for Microsoft Company is also higher than that of Google an implication that Microsoft employs its total assets well in profit making than Google Inc. high profit attracts investors hence affecting investment decisions in Microsoft Corporation positively.
Primary financial based guidelines
It is important for an investor to consider several factors before selecting which of the two companies to invest in. These factors include:
1.      Liquidity and Marketability
This is the ability of an investment to find the ready market for disposal to be done at the right price. It is easier for an investor to invest in a company with liquid assets as it would be easier for the investor to get money out of his investment. The investor should therefore look for a company with liquid investment as they provide high return that is high dividends or interest. When choosing on whether to invest in Google Inc or Microsoft Corporation, the investor should look at each of the company’s liquidity ratios to determine the liquidity of each company then make a choice depending on the company with high liquidity.  In this case, Google Inc is worthy of investment as it has high current ratio. In addition to liquidity and marketability, the investor should consider or factor the amount of investment to be made on that particular company, diversification, ease of management, hedging against inflation and the risk tolerance level.
2.      Risk and return
The main aim of any form of investment is to earn a return and profit on the money invested which may in the form dividends, interest, capital appreciation and rental income. A company with increasing total returns entails greater investment risks. Microsoft Corporation has high return on equity and return on assets as compared to Google Inc. Microsoft Company also has a high debt ratio as compared to Google Inc and this made Microsoft Corporation to be operating in a risky environment. In this case, the investor has to choose the company which is less risky to invest in and the one which will bring him or her good returns for his or her investment.
3.      Price earnings ratio
 Price earnings per share are obtained by dividing the share price by the profit per share. An investor should compare price earnings ratio between the two companies in order to make an investment decision. It is also important for the investor to look at price earnings ratio based on the current earnings of the two companies and the future earnings and not the any earnings from the previous years. The higher the price per earnings, the better it is for the investor to invest in that company.


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