Reuters | May 24, 2011, 10.21am IST
SEATTLE: International Business Machines edged past old rival Microsoft Corp in market value for the first time since April 1996, marking the latest twist in the fluctuating fortunes of two of the world's most storied technology companies.
IBM ruled the computer industry for decades until it hired the tiny, unknown Microsoft to provide an operating system for its new range of personal computers in the early 1980s.
Bill Gates parlayed that breakthrough into industry dominance -- proving his theory that software would be more valuable than hardware -- so that by the end of 1999 Microsoft's market value was three times that of IBM's, and bigger than any other US company.
Throughout Seattle-based Microsoft's rise, IBM was pilloried as an old-fashioned, immobile Goliath that could not keep up with the computing revolution.
Since the Internet technology bubble burst in 2000, the tables have been reversed and Microsoft's stock has been stagnant as investors doubt its ability to move beyond its Windows operating system and Office suite of software, while younger rivals such as Google Inc and Facebook steal the limelight.
In the meantime, "Big Blue" refashioned itself as a specialist in business software, servers and consulting, jettisoning its PC business along the way, building on a turnaround engineered by CEO Louis Gerstner in the 1990s.
An investor putting $100,000 into both stocks 10 years ago would now have about $143,000 in IBM stock and about $69,000 in Microsoft stock.
Resurgent Apple Inc moved past Microsoft in terms of market value almost exactly a year ago, and is now by far the world's biggest tech company.
According to Reuters data, Apple's market value stood at $309.2 billion on Monday, IBM at $203.8 billion and Microsoft at $203.7 billion.
IBM is now ranked fourth in terms of market value in the United States, behind oil giant Exxon Mobil Corp at $397.4 billion, Apple, and industrial and finance conglomerate General Electric Co at $205.6 billion.
IBM shares ended down 1.1 per cent at $168.26 while Microsoft fell 1.3 per cent to $24.17.
Source
IBM ruled the computer industry for decades until it hired the tiny, unknown Microsoft to provide an operating system for its new range of personal computers in the early 1980s.
Bill Gates parlayed that breakthrough into industry dominance -- proving his theory that software would be more valuable than hardware -- so that by the end of 1999 Microsoft's market value was three times that of IBM's, and bigger than any other US company.
Throughout Seattle-based Microsoft's rise, IBM was pilloried as an old-fashioned, immobile Goliath that could not keep up with the computing revolution.
Since the Internet technology bubble burst in 2000, the tables have been reversed and Microsoft's stock has been stagnant as investors doubt its ability to move beyond its Windows operating system and Office suite of software, while younger rivals such as Google Inc and Facebook steal the limelight.
In the meantime, "Big Blue" refashioned itself as a specialist in business software, servers and consulting, jettisoning its PC business along the way, building on a turnaround engineered by CEO Louis Gerstner in the 1990s.
An investor putting $100,000 into both stocks 10 years ago would now have about $143,000 in IBM stock and about $69,000 in Microsoft stock.
Resurgent Apple Inc moved past Microsoft in terms of market value almost exactly a year ago, and is now by far the world's biggest tech company.
According to Reuters data, Apple's market value stood at $309.2 billion on Monday, IBM at $203.8 billion and Microsoft at $203.7 billion.
IBM is now ranked fourth in terms of market value in the United States, behind oil giant Exxon Mobil Corp at $397.4 billion, Apple, and industrial and finance conglomerate General Electric Co at $205.6 billion.
IBM shares ended down 1.1 per cent at $168.26 while Microsoft fell 1.3 per cent to $24.17.
Source
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