Microsoft is no longer the world’s biggest company by market capitalization. There other U.S companies have overtaken the software giant in terms of stock market value. The firm’s value has gone down sharply by 41% so far this year, from nearly $600 billion to $358 billion. Much of the reason for the fall has been the uncertainty prompted by the on-going anti-trust case. It has been overtaken by General Electric, now worth $506 billion, Intel, worth $441 billion and Cisco Systems, $436 billion.
Over the past year Microsoft shares have moved downwards from a high of $120 to $68 in early trading on 7 June. Meanwhile rival Cisco has seen its share price rise by $25 to more than $60 as the company has gained its role in providing the hardware for the Internet. And for most of the year it has been competing with computer chip maker Intel for the second place. Intel’s Pentium chips are widely used in personal computers worldwide.
The company that now holds the title of the world’ biggest company is an industrial giant which makes everything from toasters to jet engines. GE has sales of $110 billion — nearly ten times that of Microsoft and 340,000 employees worldwide. It has seen its profits grow by 15% a year to $11 billion. GE Capital Services, its financial subsidiary, make up nearly half its sales. GE produces power generation systems, locomotive, medical imaging equipment and electrical appliances. It also own the U.S television network NBC and its financial news subsidiary, CNBC, and ironically, a joint venture with Microsoft to provide news on the Internet.
Microsoft’s shares now face a further period of uncertainty as the company’s legal battle continues. It could also face difficulty in recruiting and retaining employees whose pay has been boosted by their share options. The Seattle based firm is likely to go to an appeals court on any rulings. It could suffer further losses from lawsuits brought by competitors, who would be able to claim triple damages for any losses suffered. And with its energy and resources tied up in the lawsuits, the company may find it difficult to continue to innovate in the future, or move so aggressively to buy up competitors.
1. Microsoft’s shares are devalued drastically owing to（ ）.
2. Cisco System’s share price has risen considerably（ ）.
3. Which is now the second biggest company in the United States?
4. Which of the following companies is owned by General Electric and Microsoft together?
5. Why is it difficult for Microsoft to retain employees?
