Microsoft about to overtake Coke as world's most valuable brand

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Coca-Cola is just weeks away from being knocked from top spot as the world's most profitable brand by a young pretender - Microsoft.

Coca-Cola is just weeks away from being knocked from top spot as the world's most profitable brand by a young pretender - Microsoft.

At the grand old age of 114, the most famous label of all time is being hotly pursued by the 25-year-old computer company, a study published yesterday suggests.

The soft drinks giant's brand value had plummeted 13 per cent to $72.5bn (£48.6bn), while that of the company founded by Bill Gates had shot up by 24 per cent, narrowing the gap between them from nearly $40bn to just $2.3bn.

Coca-Cola's apparent fall from grace was revealed in a report by Interbrand, a consultancy. It calculated the values with a proprietary formula, taking into account the expected future earnings of the branded business, the role of the brand in generating those earnings, and the risk profile of the earnings. Not for profit brands such as the BBC and the Red Cross were not considered.

"Although Coca-Cola still heads the rankings, its rapid decline in value is remarkable for a brand which was once unassailable," said the analysts. "We can't say hand on heart that Coke won't be top next year but Microsoft has made huge gains over the last year and it has dropped. If the trends continue, Coke will lose the top spot within weeks," the consultants said.

The analysts put the drop down to a difficult period for Coca-Cola, which has included a massive product recall in Europe, weak sales in the US, a racial discrimination law suit from employees and an announcement of 6,000 job cuts.

Andrew Coker, the director of communication for Coca-Cola, said: "I think everybody knows that 1999 was a difficult year. In fact, our chief executive, Dough Daft, called it a 'wake-up year'. The important thing, however, is what we do for our customers, not brand valuations."

While Microsoft's past 12 months have also been rocky, the analysts predict the US Justice Department is unlikely to succeed in its efforts to break up the company in the next year or so.

Microsoft's success is seen as a triumph of new over old. Four out of the top five brands are technology companies with IBM, Intel and Nokia all showing double digit rises alongside Microsoft.

Yahoo! boasted the highest growth in the top 75 at 258 per cent, gaining it a place at 38 with its brand value of $6.3bn. followed swiftly behind with a 233 per cent and a spot at 48. However, few companies have made it on to the list because of a lack of foreseeable earnings.

Some of the most classic brand names of all time - Kodak, Heinz, Guinness and Wrigley's - show falls though others are fighting back. Louis Vuitton, Chanel and Rolex all had their values rise more than 30 per cent.