MSFT should be trading around $49 if it trades with the same PE ratio as GOOG does.
GOOG growth is kind of limited at this point as there is no new innovation, but MSFT has lot more to milk in with their new products. In other words, MSFT has more growth from now on as compared to GOOG.
Now coming back to the basics:
GOOG PE ratio is (704.51/45.87) = 15.35
MSFT PE ration is (27.25/3.19) = 8.54
If MSFT starts trading with the same PE ratio then MSFT should be trading 3.19* 15.35 = $48.99.
So we could easily see MSFT trading around $50 by end of this year, its almost a double from the current levels. I see that owning MSFT at these levels is much safer bet and a good investment.
Alternatively the two stocks would have the same P/E ratio and msft would be trading at the current price if their profits were half of what they are now.
But since there is no requirement for the two elements of the ratio to determine each other rather than be determined by market interest in the stock compared to profits then this is pretty much idle speculation. What will make more investors want to buy msft at the current P/E ratio? Like, what if God made a rock so heavy he couldn't lift it?
Do you propose taping on wings as well as applying lipstick? That might change the price. Or ...