SAN FRANCISCO —
Microsoft has tried to thwart Google by investing heavily in online services, to little avail. Since Google went public in August 2004, Microsoft's online division has accumulated more than $17.5 billion in operating losses. The losses include an accounting charge of more than $6 billion for Microsoft's acquisition of aQuantive, an online advertising service that didn't pan out.
Google, meanwhile, has been steadily increasing profits and share of the Internet search market. Google processes about two out of every three search requests in the U.S. and handles an even larger percentage of queries in many parts of Europe.
Although Microsoft has remained profitable companywide, the Windows franchise that provides its financial backbone has been weakening as a growing preference for smartphones and tablet computers undercuts sales of desktop and laptop computers. Besides doing damage with Android, Google is also trying to dent Microsoft by selling a less expensive, Internet-based alternative to Microsoft's Office suite. Google also is pushing a laptop operating system built on its popular Chrome Web browser in an attempt to divert even more sales away from Windows machines.
Microsoft has countered with a dramatic overhaul of the Windows operating system, one designed to bring tablet features such as touch screens to desktops and laptops. But Windows 8 has gotten off to a tepid start since its October release.