File picture: Tobias Schwarz/Reuters

IBM has edged past old rival Microsoft in market value for the first time since April 1996, marking the latest twist in the fluctuating fortunes of two of the world’s most storied technology companies.

The move marks another unhappy milestone for Microsoft, which has failed to persuade investors that it can dominate the future of technology as it did in the past, and has seen its share price stagnate over the past decade.

An investor putting $100 000 into both stocks 10 years ago would now have about $143 000 (R997 500) in IBM stock and about $69 000 in Microsoft’s.

Microsoft is now the third-largest US technology company by market value, after a resurgent Apple roared past a year ago to take first place. Apple’s market value stood at $309.2 billion on Monday, IBM was worth $203.8bn and Microsoft $203.7bn.

IBM ruled the computer industry for decades until it hired Microsoft to provide an operating system for its personal computers in the 1980s.

Bill Gates parlayed that into industry dominance – proving his theory that software would be more valuable than hardware – so that by the end of 1999, Microsoft’s market value was triple that of IBM, and bigger than any other US firm.

Throughout Microsoft’s rise, IBM was pilloried as an old-fashioned, immobile Goliath that could not keep up with the computing revolution. IBM was losing billions of dollars a year in the early 1990s and was close to a break-up before a turnaround engineered by chief executive Louis Gerstner.

Since the internet bubble burst in 2000, the tables have been reversed.

IBM is now ranked fourth in terms of market value in the US, behind Exxon Mobil at $397.4 billion, Apple, and General Electric at $205.6bn. IBM lost 1.1 percent in New York on Monday and Microsoft fell 1.3 percent. – Reuters