Google Set to Surpass Microsoft in Value; Facebook is Next

Brace yourself for the next passing of the torch in the tech industry.

Google, the leader of the Internet era of computing through the aughts, now has a $200 billion market capitalization and is on the verge of passing Microsoft's market cap of $215 billion. Microsoft was the leader of the PC era of computing and continues to dominate the desktop, notebook and server software market for Intel-based x86 computers.

I've been closely watching the relative valuation of these two companies for almost four years--ever since I predicted that Google would exceed Microsoft's valuation. The recent stock moves must come as a high note for Google chairman Eric Schmidt, who competed with--and lost to--Microsoft at both Sun Microsystems, as its CTO, and Novell, as its CEO.

Google's market capitalization (orange line) is creeping up on that of Microsoft (blue line).
Source: YChart

IBM, which led the mainframe and minicomputer era of business computing and now provides software and services around such hardware, recently passed Microsoft's market capitalization as well and is now worth $221 billion.

Oracle, which led the client/server era of business computing is worth $146 billion, but early this year was near parity with IBM, Microsoft and Google. Apple, the leader of the post-PC era of smart phones and
tablets, is an exception with a market capitalization of $353 billion. However, Apple is currently at a peak level of accelerated growth and some Wall Street analysts are predicting that it will settle.

Facebook is reportedly planning a public offering next year at a valuation of $100 billion. Although many question this valuation as high, it is likely that the leader of the social era of computing will be worth as much as the companies that drove the mainframe, desktop, client/server and Internet eras.