Friday, April 15, 2011

Quick Thought About Google (GOOG)

From the WSJ article on Google Earnings

But what stood out was Google's surging costs as the Mountain View, Calif., company seeks to stay ahead amid an increasingly competitive and fast-changing Silicon Valley scene.

Google's operating expenses—what it spends on salaries, marketing and research—rose 54% from a year ago and represented a third of its quarterly revenue.
It's interesting to think that two grad students started the entire company relatively cheaply, but now they have to invest over $1 billion per quarter in R&D to maintain position / make marginal improvements. Diminishing returns!


Taylor Conant said...

I wonder how intelligent their growth is, as well. I met a younger person earlier this week who is moving to Pittsburgh to work for Google. This is apparently an outpost that was originally on campus at Carnegie-Mellon and is now going to be its own standalone office of another 1500 people. I don't know how many of that 1500 are actually hired already but this guy told me "they're paying people whatever they have to to fill the place up as soon as possible."

CP said...


I can't imagine anyone will look back on the slides connecting different floors of the google offices as a good idea.

Another thought: if someone is paying to fill a place up with people as fast as possible, be one of the people.

I think Gary North would agree with that.

Taylor Conant said...

I can't get over how every single tech start-up that gets featured in the media allows their employees to bring dogs to work and features a bit about how people ride fun scooters around the office.

Scooters have been around a long time. You think it is only the edgy tech start ups who were smart enough to realize their productive potential inside an office environment?

These places are a dime a dozen these days. So are comp sci majors and computer programmers. Sometimes I feel like everyone I meet is involved in web development or computer programming. Are all of these people going to look like "scarce" geniuses with valuable skills 10 years from now?

CP said...

I'll bet that the valuation of lawyering and social network site building are at a high water mark.