Under any circumstances, a 75 percent profit margin is simply unheard of. Most companies would sell their soul for a 50 percent profit margin. With all of the expanses and acquisitions that Google has made over the last seven year, one might be interested in knowing where does the all-powerful Google stand now as far is profitability is concerned.

A Quarter by Quarter Snap Shot

According to The Verge, Google is currently rated number three among the big-boys of technology – Apple, Microsoft and Google. Google’s number three ranking is in both, revenue generation and profitability. In the second quarter of 2013 Apple generated $35.3 billion in revenue and posted a profitability report of $6.9 billion in that same quarter, equating to 19.5 percent profit margin. For that same quarter, Microsoft generated $19.9 billion in revenue, while reporting $5 billion in profits, placing them at a 25.1 percent profit margin. Google generated the least revenue among the three for this quarter with their revenue total standing at $14.1 billion for the quarter. Their profits for the second quarter were reported to be $3.2 billion, placing them at a 22.9 percent profit margin.

Making Comparison

Although all three of these companies play a major role in the distribution and function of communications and computing technology, their roles and strengths are different. They co-exist more than they compete. Microsoft’s strength is in developing and distributing software and operating systems. Apple’s strength is product driven, and Google is built more around services. They can be compared because they each have mastered their markets and built profit monsters because of it.

Google is not as profitable from a percentage standpoint as they were in 2007. The expectation of consistently maintaining a 75 percent profit margin over the course of seven years is unrealistic. What Goggle has done is increase their revenue and their bottom line profits. In 2007, the 75 percent profit margin that Google reported netted them 1.1 billion per quarter. The 23 percent profit margin they reported for the second quarter of 2013 netted a profit of $3.2 billion. This means that the bottom line profits more than tripled during that seven year period.

The Simplicity of it All

It is no secret that you must spend money to make money. Google has spent a great deal of money to build their machine and the end result is a machine that is generating revenue at an annual growth rate of 15.5 percent. At this consistent rate of growth, Google has no reason to feel insecure about its future and dominance on the web.

Clarification

To ensure that the comparisons that have been made are fair, it is important to know that the figures that were compiled for this report include a $6.19 billion dollar write-off for Microsoft that is directly associated with acquisition costs. This simply means that for the reporting period, which covered all of 2011 and 2012 as well as the first two quarters of 2013, $6.19 percent of what was reported by Microsoft was not generated revenue, but a write-off.
When it comes to profitability, Google has their feet firmly planted and progressively moving forward.

For more information, check out “Google: Behind the Numbers“.