Today: Google (GOOG) moves into the No. 2 spot of tech's most valuable companies, overtaking Microsoft in the run-up to Windows 8, but Apple (AAPL) falls as tech stocks have an up-and-down trading day. Also: Facebook makes big ad push, and Workday files for big IPO.
Google tops Microsoft amid PC industry struggles, Apple falls again
Google continued its hot run Monday on Wall Street, reaching a new all-time high and catapulting past Microsoft in market capitalization, but Apple's cold streak continued in a mixed day for tech stocks and the market in general.
Google shares increased 10.1 percent to record highs in September thanks to analysts' contention that it is set up well for long-term growth. Gains continued Monday, with the Mountain View search giant's stock rising another 1 percent amid reports that Google has agreed to buy facial-recognition software maker Viewdle for about $45 million.
With Monday's increase, Google surpassed Microsoft in market capitalization -- the total worth of all shares in a company -- to become the second most valuable technology company. Experts see it as yet another example of the Web becoming more important than hardware.
"The PC hardware business is obviously struggling," Wedge Partners analyst Martin Pyykkonen told Bloomberg News. "The transition here is pretty straightforward in terms of where things have moved to and certainly that's cloud, that's Web."
The struggling PC business led to Microsoft losing 0.9 percent off its share price Monday, as Bloomberg reported that a delay at Santa Clara chipmaker Intel (INTC) is causing development of Windows 8 tablets to stall, despite Hewlett-Packard's (HPQ) announcement of a Windows 8 tablet offering. The report follows last week's report that Intel CEO Paul Otellini told employees that Windows 8 is being released later this month despite bugs in the operating system. With a Monday downgrade for sales of Intel's much-hyped line of "Ultrabooks," the recent news shows even more discord in the PC industry and especially in the "Wintel" alliance that has driven the sector for decades.
"The PC channel is in chaos right now," San Francisco-based JMP Securities analyst Alex Gauna told Bloomberg. "They don't know what to do. They don't know what to design for, they don't know what the consumers are going to buy. Tablets have stolen their growth trajectory, plus the macro situation, plus Wintel has made a mess of their ecosystem."
Meanwhile, the company that originally threw the PC industry into that chaos with the introduction of mobile devices that consumers currently crave far more than desktops and laptops continued to struggle. Apple, the only technology company worth more than Google, fell 1.2 percent to close at its lowest level in nearly six weeks, $659.39.
While undergoing its regular round of obsessive media coverage that follows the launch of a new mobile device, Apple slid 4.8 percent last week as investors showed concern about production problems with the iPhone 5 and users' furor about the mapping application on the newest iteration of Apple's popular smartphone.
On Monday, reports of a release date for Apple's much-rumored 'iPad Mini' and an Apple-administered hedge fund that is the world's largest couldn't stop the slide, helping to create a mostly break-even day for tech stocks. While Intel (up 0.4 percent) avoided a fall amid the PC uproar, and HP's announcement of an enterprise tablet offering sent it up 0.9 percent, the tech-heavy Nasdaq was the only one of the three major U.S. stock indexes to decline Monday. While a rise in manufacturing helped the Dow Jones and Standard & Poor's 500 indexes, the SV150 index of Silicon Valley's largest tech companies declined 0.3 percent.
Facebook continues positive momentum with focus on online ads
Facebook's positive run continued on Wall Street, as the Menlo Park social-networking company gained 1.5 percent Monday after jumping at the end of last week.
While last week's growth was based on Facebook's ability to find a new revenue stream through an e-commerce platform called Facebook Gifts, Monday's rise could be attributed to Facebook focusing on its bread-and-butter, Internet advertising. The company told advertisers that they should not be as concerned about the number of clicks an ad receives from viewers in judging the overall effectiveness of a Facebook ad campaign, with the social network instead pushing its ability to report the number of times a user has actually seen an ad.
Facebook's sharing of users' ad views is already causing an uproar among privacy advocates, however, as they say that the company must receive express consent from its users before collecting and sharing that data because of a consent decree Facebook agreed to after previous privacy missteps.
Monday's advertising push was part of a concentrated effort by Facebook, as Chief Operating Officer Sheryl Sandberg gave her first big interview since the company's initial public offering. While Sandberg spoke with CNBC's Julia Boorstin, cofounder and CEO Mark Zuckerberg jetted to Russia, where he was asked to expand the company's operations in that country.
Facebook closed at $21.99, a gain of 33 cents. Other notable Silicon Valley market movers Monday included Yahoo (YHOO), which lost 0.9 percent as CEO Marissa Mayer celebrated the birth of her son; Netflix (NFLX), which gained 3 percent as a onetime critic changed his tune; and Splunk, which dropped 2.2 percent after a hedge fund manager called it an "undifferentiated product."
Fourth-quarter IPOs ready to jump off with Workday filing
Silicon Valley's next big IPO is on its way, as Pleasanton cloud software company Workday filed for its public debut Monday. The company, which offers human-resources software and was founded by former executives of PeopleSoft, expects to be valued at almost $4 billion, according to Monday's filing.
Workday plans to sell 22.75 million shares at a price ranging from $21-$24; at the high end of that range, the company would bring in $546 million and be valued at $3.85 billion. After strong debuts from Silicon Valley companies such as Palo Alto Networks, Trulia and Qualys in the third quarter, Workday should be the kickoff for fourth-quarter IPOs, as it expects to set the final price for its initial shares on Oct. 11, which would put the stock on the New York Stock Exchange the next day.
"This is in the Palo Alto Networks arena -- very high demand, long-awaited," IPO Boutique senior managing partner Scott Sweet told The Wall Street Journal on Monday. "They have exponential top-line numbers, their growth is just off the charts -- but they are losing a lot of money, mainly due to [research and development]. But you're going to see that in many IPOs."
Silicon Valley tech stocks
The tech-heavy Nasdaq composite index: Down 2.70, or 0.09 percent, to 3,113.53
The blue chip Dow Jones industrial average: Up 77.98, or 0.58 percent, to 13,515.11
And the widely watched Standard & Poor's 500 index: Up 3.82, or 0.27 percent, to 1,444.49
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.