Google and Microsoft reveal massive rise in profits as they shift their attention to mobile and tablet devices
- Clever strategic shifts saved Microsoft and Google from poor performance
- Both are adapting to the declining popularity of desktop computers
- On Friday Google shares were trading at £512 and Microsoft at £19.50
- Google's net profit climbed to £2.2billion while Microsoft made £4billion
- Microsoft announced COO Peter Klein was leaving as latest executive to quit
By OLIVIA WILLIAMS PUBLISHED: 21:09 GMT, 19 April 2013 | UPDATED: 22:19 GMT, 19 April 2013
Both Microsoft and Google revealed soaring profits after adapting their businesses to meet the rise of mobile and tablet devices.Google's profit climbed to £2.19 billion while Microsoft made £3.93 billion.Google's profit was up 16 per cent from a year ago thanks to its internet business softening the effect of a sharp decline in its Motorola mobile phone division.
Hits and misses: Microsoft's Windows 8 system met a lukewarm reception, left, but the Google Glass, right, is hotly-anticipated to do be a big seller when it comes out later this year
Shares in Google, which reached an all-time high of £550 in March, were up to £512 on Friday. Despite being the world's most popular search engine, it has needed to adapt to consumers browsing through mobile devices instead of PCs by shifting its focus to mobile advertising.
Google's profits have been under pressure as advertising rates on smartphones and tablets are lower than on PCs. However, it managed to improve its cost-per-click, the price that advertisers pay, in the first quarter.
'Google eked out an acceptable quarter, but it wasn't easy,' said Stifel Nicolaus analyst Jordan Rohan. Google's core search advertising business remains solid but unexciting, Rohan said. Positive developments include its Android operating system overtaking the Apple iPhone and iOS software to power some 70 per cent of devices. New products such as the Google Glass wearable computers and high-speed fiber networks are priorities to ensure the company's future success.
Something to celebrate: Eric Schmidt, Executive Chairman of Google, (right) with popstar Psy
Google's Larry Page said the new lineup of Motorola devices would offer a variety of improvements over current smartphones, with features such as longer battery life and better resistance to shattering or damage from spilled drinks. For now however, the Motorola business continues to be a drag on Google's results. Microsoft enjoyed revenue that was up 18% year-on-year, at one point on Friday trading its shares at £19.50
Shake up: Microsoft co-founder Bill Gates has been an anchor at the company but many chief executives have left over the past few years
Microsoft's strategy of selling more corporate software contracts eased the effects of personal users turning their back on PCs and a lukewarm reception for Windows 8. Microsoft no longer relies on a new PC to make money from software.Microsoft said its profit made a jump of more than 17% from a year ago. For the past ten years, Microsoft's shares have remained essentially flat.
Shifts at the top of Microsoft has left the top of the company looking fragile. Chief Financial Officer Peter Klein is leaving at the end of June after 3 and a half years in the post. He is the latest in a line of top-level executives to leave the company, following Windows head Steven Sinofsky last November. Microsoft said a new CFO would be named in the next few weeks from within its ranks.
However, showing a very clear sign of confidence in the future, Google executives have just secured a 29-acre airport terminal that will largely service their jets in San Jose.The new airport will be capable of accommodating the largest jets, including Boeing 737s and 767s, owned by the top executives.
Both Microsoft and Google revealed soaring profits after adapting their businesses to meet the rise of mobile and tablet devices.Google's profit climbed to £2.19 billion while Microsoft made £3.93 billion.Google's profit was up 16 per cent from a year ago thanks to its internet business softening the effect of a sharp decline in its Motorola mobile phone division.
Hits and misses: Microsoft's Windows 8 system met a lukewarm reception, left, but the Google Glass, right, is hotly-anticipated to do be a big seller when it comes out later this year
Shares in Google, which reached an all-time high of £550 in March, were up to £512 on Friday. Despite being the world's most popular search engine, it has needed to adapt to consumers browsing through mobile devices instead of PCs by shifting its focus to mobile advertising.
Google's profits have been under pressure as advertising rates on smartphones and tablets are lower than on PCs. However, it managed to improve its cost-per-click, the price that advertisers pay, in the first quarter.
'Google eked out an acceptable quarter, but it wasn't easy,' said Stifel Nicolaus analyst Jordan Rohan. Google's core search advertising business remains solid but unexciting, Rohan said. Positive developments include its Android operating system overtaking the Apple iPhone and iOS software to power some 70 per cent of devices. New products such as the Google Glass wearable computers and high-speed fiber networks are priorities to ensure the company's future success.
Something to celebrate: Eric Schmidt, Executive Chairman of Google, (right) with popstar Psy
Google's Larry Page said the new lineup of Motorola devices would offer a variety of improvements over current smartphones, with features such as longer battery life and better resistance to shattering or damage from spilled drinks. For now however, the Motorola business continues to be a drag on Google's results. Microsoft enjoyed revenue that was up 18% year-on-year, at one point on Friday trading its shares at £19.50
Shake up: Microsoft co-founder Bill Gates has been an anchor at the company but many chief executives have left over the past few years
Microsoft's strategy of selling more corporate software contracts eased the effects of personal users turning their back on PCs and a lukewarm reception for Windows 8. Microsoft no longer relies on a new PC to make money from software.Microsoft said its profit made a jump of more than 17% from a year ago. For the past ten years, Microsoft's shares have remained essentially flat.
Shifts at the top of Microsoft has left the top of the company looking fragile. Chief Financial Officer Peter Klein is leaving at the end of June after 3 and a half years in the post. He is the latest in a line of top-level executives to leave the company, following Windows head Steven Sinofsky last November. Microsoft said a new CFO would be named in the next few weeks from within its ranks.
However, showing a very clear sign of confidence in the future, Google executives have just secured a 29-acre airport terminal that will largely service their jets in San Jose.The new airport will be capable of accommodating the largest jets, including Boeing 737s and 767s, owned by the top executives.
