Business

Google passe$ Microsoft for No. 3

It was a humbling day for Microsoft.

The software giant — once the dominant force in computing — watched yesterday as Google whizzed past it to become the third-most valuable company on the planet, behind Apple and Exxon Mobil.

“It’s a big milestone, like any milestone where the young kid beats the grown-up,” said analyst Colin Gillis with BGC Partners.

Google shares finished up 1 percent at $761.78, valuing it at $249.13 billion. For the first time, it edged out Microsoft, which closed down slightly at $29.49, giving it a market cap of $247.23 billion.

Google shares have been on a tear all summer as the 14-year-old company extends its reach and ratchets up the competition with Apple, Microsoft and Facebook.

While Wall Street is still concerned about Google’s spending, which cuts into profits, and its purchase of Motorola Mobility, investors are more focused on its growth.

Google’s ad business is booming, and the company is the leader in both search and mobile advertising. It also is on pace this year to supplant Facebook as the dominant player in display advertising, according to eMarketer estimates.

Google’s Android mobile operating software also commands the greatest market share in the fierce battle over smartphones.

Meanwhile, Microsoft is trying to adjust as the world shifts away from its software-centric model to a Web-based one. Its mobile strategy includes its new Windows 8 software, which works on tablets, smartphones and PCs.

The company has been trying to drum up enthusiasm for Windows 8, which goes on sale Oct. 26, for a year, saying it will be a game-changer. But early indications suggest that users are lukewarm on the upgrade, and already there is worry that it will be a flop.