IBM Tops Microsoft in Market Value for First Time Since 1996

Bloomberg. by Sarah Frier - Sep 30, 2011

Sam Palmisano, chief executive officer of International Business
 Machines Corp., divested the company’s PC business six years ago,
calling it commoditized, to invest in software and services.
Photographer: Joshua Roberts/Bloomberg

InternationalBusiness Machines Corp. passed Microsoft Corp. in market value based on closing share prices to become the world’s second-most valuable technology company, according to data compiled by Bloomberg.

IBM is now the fourth-largest
 company by market value.
 Photographer: Sean Gallup/Getty Images

IBM rose $1.62 to $179.17 at 4 p.m. on the New York Stock Exchange, giving it a market value of $214 billion. Microsoft fell 13 cents to $25.45 on the Nasdaq Stock Market, giving it a market value of $213.2 billion.

It’s the first time since 1996 that IBM closed ahead of Microsoft, though IBM had passed the software company on an intraday basis in May. Microsoft was worth three times as much as IBM in 2000.

IBM Chief Executive Officer Sam Palmisano divested the company’s PC business six years ago, calling it commoditized, to invest in software and services. Microsoft, whose Windows and Office software are used primarily on PCs, lost its spot as the most valuable technology company last year to Apple Inc., as sales of iPad tablets and iPhones crimped PC demand. Apple is now the world’s most valuable company, with a market value of $422.9 billion.

IBM’s stock has gained 22 percent this year, while Microsoft’s has dropped 9 percent.

To contact the reporter on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net