Microsoft's main rival is not Amazon, but Apple (CLNE), and there it's being beaten badly, as Wired explains. The historical roles have fully reversed, with Microsoft offering the niche product in the Surface tablet, while Apple controls the mass market through the iPad. This is even reflected in the PC niche, where sales are not just declining but where the iMac is gaining share steadily.
So, sure, both companies had a disappointing quarter. Google's results are still too tied to advertising. Google had to absorb both the cost of acquiring Motorola and of downsizing it.
But Google will survive. Its cloud leadership is not threatened. Its problems lie entirely in how it can monetize its advantages.
By contrast Microsoft has lost its advantages. It's Azure cloud is more costly than the clouds of Google and Amazon. Its "moat" -- the PC and enterprise server software that keeps competitors at bay -- is losing its edge in the face of competition from IBM (IBM), Oracle (CLNE) and other cloud-based technologies.Even if Windows 8 turns out to be much better than expected, it's unlikely to gain a double-digit share of either the phone or tablet market. This time next year, Microsoft will be increasingly threatened by the cloud, its Windows 8 will have peaked, while Google will be fully engaged in monetization. I have shares in both Microsoft and Google, but I'm likely as not to take my lumps on Mister Softee and put that money back into Google, maybe soon. Time may have passed Microsoft by, but the age of Google is just beginning. At the time of publication, the author was long MSFT, AAPL, and GOOG Follow @DanaBlankenhorn This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV