Product based - 
1. example yahoo is a product based company - they selling 
their product to outside - Features are analyzied by the 
market and develope the product
2. IBM,Google,microsoft(IE) also product base companies
WIPRO,INFOSYS - both product & Project based companies

Project based companies - application developed based on 
customer requirements 

I have answered upto my knowledge - please correct if i am 
wrong

Regards
Raghu

This is also one of the difference

Product - impact on groups(Requirement gathered from market 
study) 
Project - impact on users(requirement from users)

Regards
Raghu

is based on rerquriments

product: requirements defined by company itself

it is 4 market

Project  : requirements came from client

Beta testing 4 product and alpha testing 4 poject

Product-based company : Basing on all the users (not 
restricted to specific type of customers). All the users in 
the world can use their products.

Project-bases comapny : Basing on the specific customer.

Product based company develops the applications for Global 
clients i.e there is no specific clients. Here requirements 
are gathered from maket and analyzed with experts.

Project based company develops the applications for the 
specific client. The requirements are gathered from the 
client and analyzed with the client

Instead of summarizing what my above friends have done i 
would give u some examples, perhaps that would help you 
understand the same.

Product Based Companies:
Microsoft, Sun, Linux etc.

Project Based Companies:
TCS, Wipro, Satyam, Polaris etc.

Product:
        whole company/world will produced one s/w based on 
market requirement.

Project:
        s/w  will developed based on client requirement.

Actually Product-based company is the company which develop 
application by studying the market
and the Project-based company is the company which develop 
application according to the customer requirement

Project:
•Developing an application based on clients requirement
•It will be released only to the particular client
•Eg: TCS, CTS, INFOSYS
Product:
•SDU develops an application based on their own requirement
•It will be released into market.
•Eg: Microsoft, Tally

what jawahar said is exactly correct....

product based company means ,the ceo category people's 
themselves take the requirements or proposals depending on 
market needs & release into the markerts for drawbacks.
eg: microsoft products (os,.net)

projects based company means ,depending on a specific 
client/customer requirements these companies are develope 
the softwares.
eg:satyam(baking projects)

product based companies mainly analyze the future
requirements of market and they will come up with exact
solutions. There will be no client for product based companies.

But in case of project based companies, they will analyze
only the client requirements, based on those requirements
they will give solutions.

both are important.

Product Based Companies develop their own 
Products/applications based on the market requirements..

Project Based Companies develop the Products/applications 
for others i.e. their Clients based on the Client 
requirements