Google Reports Increased Profits

typobox43 writes "According to Yahoo! News, Google has reported increased profits compared to the year-ago numbers in its first quarterly earnings report as a publicly held company. Google's revenue figures more than doubled, leaping to $805.9 million from $393.9 million. Google shares closed today at $149.38."

Comments

Good

[metlin]

Atleast, they deserve it.

But I just hope that after all this, Google does not turn into yet-another-evil-corporation. A lot of companies started out with benign ideals, only to be corrupted as they grew bigger and were taken over by selfish MBA types.

I just hope that that the Google share-holders realize that what makes Google important are not just its ideas, but also the nature of their ideas.

Kudos, Google! You guys deserve it.

Re:Good

[WIAKywbfatw]

99 percent of shareholders invest in a company for one reason and one reason only: to make money. They don't care about ethics, doing business in a friendly manner or the warm fuzzy glow inside that employees take home with them at the end of the day, they're only interested in the almighty dollar.

And, with the way that public companies have to operate by law in the US, that means doing whatever it takes: the boards of US companies are legally obliged to increase shareholder value as much as possible, and if that means no more Mr. Nice Guy, well, that's just tough for you, for me, and for anyone else that gets in the way of the bottom line.

Want to know the one way to keep a company from running into these sort of hassles? Stay privately owned rather than become a publicly traded company.

Of course, that means you can't properly compensate all the people (and venture capitalists, if any) that got you to where you are, and that presents its own set of problems including staff retention, but that's another story.

Bottom line: don't expect Google to be your best friend from mow till the day that you die.

Re:Good

[hunterx11]

I would argue that Google's credo has helped them to make money far more than it has hindered them. Not pissing off your customers and planning on succeeding in the long run might be a radical idea in today's business world, but it hardly constitutes a breach of fiduciary duty.

Re:Good

[DigitumDei]

Correct me if I'm wrong, but as I understand it the only way Google makes money is via paid ads. And the best way for them to sell those paid ads is by having tons of free applications that people WANT to use.

I think, in the industry they're in (that is search and anything they can link search to), that it really is in their best interests to NOT become yet another corporation. If they did, MS would eat them alive in no time.

Re:Good

[metlin]

I know exactly what you mean.

I'm the co-founder of a small technology startup, and it is for this very reason that we do not want to look out for VC investment.

But the unfortunate problem is that VC investment is quite inevitable, especially if you want to grow. And once VC investments come in, they would most certainly insist on an IPO, because that increases their profit margins, too.

That's a vicious circle - it's very hard for an entirely privately held company to make it big. The biggest thing that VC investments bring in is not just the money - it is the contacts and the pedigree. If you are a company in whom Vulcan or ING Barings have invested, then you must be good.

That brings in more business, and you grow. So yeah, I can pretty much relate to what you're saying!

Re:Good

[WIAKywbfatw]

The reason why Google has succeeded has more to do with the fact that it has an excellent product rather than the fact that it is a friendly company.

There are plenty of companies out there that have similar philosophies and that fail, you just don't hear about them because they didn't have a product good enough to stop them from failing.

Re:Good

[hackwrench]

But the people who buy ads are the real cuatomers

Re:Good

[Indy Media Watch]

I'm not sure why you were modded "informative" unless the moderator happened to be a card-carrying Communist.

99 per cent? Source please?

Has it occurred to you that many businesses, including public companies actually "make money" precisely by being ethical and friendly? I know those traits are my preference in business partners.

Re:Good

[shrykk]

Yes, but part of the excellence of their product is that their ads don't piss us off. They realised you will put up with a few ads in order to get an excellent product and the day they sell out peoples private data or start bombarding us with pop-ups is the day we'll walk away.

Re:Good

[CaptainZapp]

Correct me if I'm wrong, but as I understand it the only way Google makes money is via paid ads.

OK, I correct you :)

They generate revenue by selling business solutions and 3rd party access to their search.

But you're not far off in the sense that 90% of their revenues are generated by ads.

Re:Good

[packeteer]

Yes people will walk away if google did that but consider this; if google could make more money off selling private data and bombarding us with pop-ups even though people would walk away they would do it. Basically im saying its just luck that google happens to make the most money off being nice. If you disagree with that last sentance take a good long look at almost every other public company out there.

Re:Good

[nicke999]

There is no contradiction with VC investments and staying a "non-evil" company. Your investors speak the money of language and that language only. If you can convince them that adhering to open standards and not trying to lock in your customers is the most profitable way to go then they will invest. This is what Google have done. They have shown to their investors that their openness is a competitive advantage.

If you cannot show that staying away from "evil" methods is the best way to go then you are out of luck. They will find another company that don't care about being evil and you will find yourselves beaten out of business pretty quickly.

Personally, I think that adhering to open standards and not trying to fool your customers is one of the best competitive advantages a company can have. Don't try to push some philosophy on your investors, show them why your philosophy is a competitive advantage and they will come.

Re:Good

[scambaiter]

mhm, and there are a couple of ethical funds out there which will put their money in stocks and bonds of companies that behave in an ethical way. So there must be some investors out there who actually do care which kind of company gets supported by their money....

Re:Good

[Anonymous Coward]

is it just me or that no-one else thinks that www.gmail-is-too-creepy.com ??

p.s. i use gmail

Re:Good

[haus]

And don't forget their outstanding cat walking service...

Re:Good

[Fragglebabe]

I think that having big name VC investors behind you shows that they believe that you are a worthwhile company, but it doesn't necessarily mean that your customers will. At the end of the day, you have to prove to your customers that you deserve their custom. One of the best ways to do this is to be an ethical company with high standards and an open, honest ethos. However, another way to do this is to provide an efficient, cost effective service that is ultimately much better than your competitors' service. It is often easier and more profitable to follow the latter path, even if you do annoy some of your customers in the process. What we, as customers, have to decide is, do we prefer efficiency over honesty, and cost-effectiveness over ethics?

Re:Good

[Zemplar]

The reason why Google has succeeded has more to do with the fact that it has an excellent product

And one would hope that Google leadership also realizes the very low product switching costs should another competitor come out with a better product. Therefore, Google still needs to remain the best at what they do because it is not like most people have invested heavily in an intricate Google infrastructure and have an easy path to an alternate product should one appear superior.

Re:Good

[metlin]

Unlike during the DotCom boom, present-day investors do not invest first and wait for returns later. These days, getting investment is quite hard during the initial stages of a company's development.

You'd have to look out for either customers willing to trust a startup or angel investors, to kickstart your venture. VCs only invest when you've shown for a year or two that you can sustain development and profitability while staying afloat with a steady positive profit margin.

The days when investment for any technology venture would come flowing are over, so it is really hard to get any and all kinds of investment. Under such circumstances, companies are forced to make choices for survival even if it would contradict the ethos that the company was built on. Would you rather observe Open Source ideals, or cause the loss of jobs for a significant number of your employees? When it comes to questions like that, companies are often forced with hard decisions. Starting a company is hard, closing down one is harder :)

We've a policy to release all our work as Open Source at some point in time or the other, however we are not certain how long that would last as we grow bigger. I think that as we grow, we maybe able to do that to some of our products, but definitely not all. It's a hard choice, and one that we would have to make at some point of time or the other.

And I will answer your question for you - corporate customers do not care about anything except the bottom line. Hook or crook - give us what we need for as cheap as possible. If that were not the case, people like Fiorina would not be taking salary hikes for firing off a good thousand people and downsizing her own company while terminating or outsourcing the very foundations that HP was built on.

Re:Good

[metlin]

Unfortunately, it is not all black and white. Ideals are nice to an extent, but as you grow bigger you are not the sole person in control of your company.

You're right, your last statement just about sums it all up beautifully. Unfortunately, investors also have a set of principles that they think are essential to business - tried and trusted, so to speak.

In the present state of the economy, they would rather that their "old-economy" principles are tried and trusted, rather than the new "upstart hippie hacker ideals" (that's what one investor I know actually called Open Source).

Re:Good

[Anonymous Coward]

What startup? You call 4 guys sitting in their moms' basements (and a few code monkeys in Bangalore paid in peanuts) a startup? What have you been smoking, man? Gimme some of that stuff.

Seriously. Stop daydreaming and do some real work.

Re:Good

[i]

An example of a company that never got to an IPO: IKEA (ok, it's not an IT company).

It have been (and in practice still are), wholly owned by the founder: Ingvar Kamprad.
It's worth something like 55 billion dollars today.

(They have since a couple of Years begun establishing stores (and production) in Russia and are expecting losses in the next 10 years. As Kamprad have said: it haven't been possible if they had done an IPO.)

Re:Good

[metlin]

http://highbrew.com/about/crew.html

Re:Good

[Anonymous Coward]

Google has jumped the shark. It really has. Google Desktop Search, Google Browser, Google Toolbar, Froogle, Google OS, Google Taskbar Search, Gmail. All have been implemented or rumored to be on the drawing board. Where's my Google Soda, Google Airline, Google: The Game and Google: The Fragrance. Google has fucking lost it and they're diluting their brand worse than Donald Trump.

The really sad thing is is that they've ignored what made them great in the first place: the search engine and now it sucks. I tried searching for my old high school and it took me 4 attempts at entering/rearranging search terms to get to a page where I had to scroll down to around the fiftieth result to find a page that I knew would link to the page I wanted. Even Google Local couldn't hack it. I tried Clusty and got the page I wanted in 3 clicks with a simpler search term. Entered the school name only then used the Clusters to narrow it down manually. Worked beautifully.

Google: Watch your back. Your days are numbered. Just like those that came before you. Besides, they haven't got far to fall now: they only account for %50 of web searches made.

Re:Good

[Anonymous Coward]

Is that not the meaning of a startup? D'oh! A startup means a new company. If he had said that it was an established corporation I can understand your indignation.
Slashdot: Where wannabes put down those who do any actual work.

Re:Good

[rednip]

if google could make more money off selling private data and bombarding us with pop-ups even though people would walk away they would do it

That's the 'screw the future approach', we want profits now! approach. Sometimes I am suprised that it's not taught in business school, it sure seems like it is.

Basically im saying its just luck that google happens to make the most money off being nice.

It's that 'nice' approach to advertising which got them the top search engine spot to start with, generally relevant ads which don't try to take over your pc, or trick you into clicking them. The search engine tech is impressive, but 'being nice' works for them, when I used Yahoo! I almost never clicked on an ad, but with Google, I am willing to at least check them out. I don't want my browser window to look like Times Square, or the Las Vegas strip, with each ad trying to outdo the visual impression of the last. I perfer the short 'classified' type ad on google, something that tells you how they will fullfil you stated need. Some people call this 'being nice', I call it knowing what your customer wants and consistantly deliverying it.

Re:Good

[qray]

Once you take the VC money you're basically tied to generating a ROI in 5 years. IPO is one way to do that, others are fairly hard as well. Obviously depends on the amount of investment.

I worked for a small consulting firm that was doing ok, making a bit of money every year. Then they decided to go the product route and accepted investor money. Many people thought, well if things don't go right we'll just go back to doing contracting since we were making money doing that.

What people didn't realize is that once the money was accepted they were committed to a make it or break it path. Either they launched a successful product and/or IPO'd or basically they were going to shutdown.

In the end they shutdown. A very great company to work for was no more. Was it a mistake? Many believed so. To its credit, the culture of the company did not change after the money came in. Unfortunately the dot com bust and many other factors spelled their demise.

Hopefully Google can keep their culture and style intact. They've made it this far, and that's difficult enough, hopefully they'll continue. I wish them well, I know several people who work there.

Re:Good

[Anonymous Coward]

Oh, I know about your little company. Leseeee....

Product list? "Coming soon".
Downloads? "Coming soon".
Whitepapers? "Coming soon".

From the list of founders, it looks like a bunch of college mates who got together in a chatroom and said "d00d.. lets start a company... yeah, d000d... that would be like... totally rad, man!"

Who are your customers? What have you delivered (other than vaporware, which reeks like the aftereffects of too much Taco bell)? What is your field of specialization? What do you DO ??

Is your aim to pickup chicks by impressing them with your "startup"? It is no wonder the VCs won't touch you guys!

But who am I to diss a good tokefest? Keep rawkin'!! And always inhale. ;)

Re:Good

[Anonymous Coward]

YHBT. Do not feed the trolls :)

Re:Good

[iabervon]

The boards of US companies aren't legally obliged to increase shareholder value; they're obliged to do what they say they'll do in the prospectus. Most companies say that they're a good investment and they'll increase your value. Google says that shareholder value isn't a concern of theirs, and investors who want to affect company policy can kindly take their money elsewhere.

Companies normally become publically traded in order to raise investment money, which requires attacting investors with promises of future wealth. They also usually don't have well-known policies and aren't usually already successful. Google, on the other hand, didn't care particularly much about raising money, and people knew what kind of policies Google had, and that they were doing well with them. So Google promised nothing about investment returns and promised that they would continue to be non-evil, which was making them money.

It would, in fact, be deceiving investors if Google started doing evil things, and they could get in trouble for that.

Re:Good

[DrCode]

This reminds me of a couple articles I read about Costco. Apparently, Costco pays its employees quite a bit more than other discount stores, with those who've been there 2-3 years making around $40K with pretty decent benefits.

The first article claimed that some investors were unhappy about this, because Costco's profits weren't quite as high as their competitors'.

But the second claimed that Costco is one of the companies that is holding its own against Walmart, because customers like the fact that the employees are happy and helpful, due to the fact that they're getting treated well.

Re:Good

[mrklin]

And once VC investments come in, they would most certainly insist on an IPO, because that increases their profit margins, too.

B.S. The new paradigm is to flip it quick i.e. Lookout sells to MSN, Oddpost to Yahoo, (insert name here) to Cisco instead of waiting for the possibility of an eventual IPO.

If you VC is insist on you going IPO, then your VC is an idiot and so are you for succumbing to quick cash.

Re:Good

[metlin]

Actually, no - we are not looking at VC money. That's the point I was trying to highlight there.

Although we could, we're not - we're just sustaining ourselves on services projects for the moment.

This was just something that some of the VCs that we had talked to had indicated to us about, nothing more :)

Re:Good

[metlin]

That's a story that I've heard so many times in so many versions that it's really sad.

Yeah, VC investment is a double edged sword and most people don't quite realize it, either.

Hopefully, Google will pull through fine.

Re:Good

[Q Who]

The boards of US companies aren't legally obliged to increase shareholder value; they're obliged to do what they say they'll do in the prospectus.

It's good to know that everyone who posts about how publically traded companies are legally obliged to increase shareholder value, and then goes on some rant, doesn't know what he is talking about.

Useful for skipping worthless comments.

Re:Good

[sean23007]

It's also when it won't matter anymore, because they'll have all your private data. It probably won't be much longer before Google has more on everyone in the country than the US Government. Oh well, I like them.

Google Moogle

[Anonymous Coward]

Hard to believe theres actually people clicking on googles ads! Is this their only source of income?

Re:Google Moogle

[metlin]

Well, I don't think it's entirely ads (emphasis mine)-

Google and rival Yahoo each get a significant portion of their revenue from Web search advertisements, a lucrative and fast-growing market.

That must mean that they have alternate sources. For instance, Google does sell search-boxes and the like. I'm sure there are other sources of income, too.

Re:Google Moogle

[Anonymous Coward]

Google has search results ads and website ads on third party sites. They're also marketing search related software products (not just the free gimmicks for the masses).

Re:Google Moogle

[Anonymous Coward]

I thought online advertising was dead... Who actually bothers to click those ads? And if they do they are usually tricked and don't buy anything anyway.

My brain is trained to recognise and ignore adds of all sorts. Even the big fullscreen ads you see on gaming sites I instinctivly know to look for the "continue to article" link.

Re:Google Moogle

[wargolem]

Not at all. Although advertising is still a major source of revenue, Google makes plenty of business offering enterprise solutions. For example, Amazon's new search engine is Google powered (previously reported here). I believe Yahoo's search engine has been powered by Google for a while now too, although I could stand to be corrected.

Re:Google Moogle

[mirko]

Google has region-based advertising :if I am looking for Korg from Switzerland, I'll get links to the music shops around me.
(This is the difference with many sites, incl. Slashdot who propose me some US-centric ads which I do not even care to read anyway because I am just so untargetted that it almost sounds unwelcoming.)
Anyway, it doesn't work that bad though I have one issue : people who buy advertising for their oiwn "search engines". At the end, you get their add for unrelated products and this is just polluting.

Re:Google Moogle

[marcuspl]

People tend to be very narrow minded when it comes to making money. Google has one of the absolute largest and probably best organized set of meta data of the internet today. The internet is probably the largest collection of semi-organized information around. They also have a kick ass search engine to help you receive just the particular snippet of information you want.

This has an great value for me as an individual. For a company? Huge!

I bet you could make a fortune just explaining why google can make as much money they want. I bet google could make a fortune just selling the information of how they got to where they are today. As a company as well as the technical side of it. Which happended to be published pretty much as a tutorial some time ago if recall my readings correctly.

So, no, I don't think ads are their only source of income. If they really upped their money making intensions, which they probably will sooner or later, they could make the ads a disapearing part of their total income. Selling information, information analysis, customized search engines, white papers, meta data processors and information systems in general are just some ways for them to make the big bucks.

How about about Boogle - your on demand complete Bank Software System Suite? I would probably trust google over any other company when it comes to Information Systems.

Re:Google Moogle

[badrad]

Actually, a couple months back Yahoo switch away from Google to an internal search engine.

Re:Google Moogle

[lintux]

Yes, people certainly click on Google ads. Actually, I know some webmasters who have Google ads on their sites (as you possibly know, you can have Google ads on your site and you'll get a certain amount of money for every click), and some of them really make more money than just to pay for the hosting.

Remember that the ads are quite on-topic in many cases, which makes it more likely that someone will click on them.

Re:Google Moogle

[hachete]

Yahoo bought overture (which I think used to be AllTheWeb)

http://searchenginewatch.com/searchday/article.php /2234821

Re:Google Moogle

[anagama]

• I bet you could make a fortune just explaining why google can make as much money they want. I bet google could make a fortune just selling the information of how they got to where they are today.

P/E is over 200. It will take more than 200 years for GOOG to earn as much per share, as it costs to buy a share today. Don't get me wrong, Google is great, but at some point, investors are going to demand a little bit back for their money. That's when Google will start to backslide morally.

finance.slashdot.org

[Anonymous Coward]

Tune in tomorrow for the earnings reports from railroad and textile companies, and we'll discuss whether Amazon P/E ratio makes sense to hedge funds managers.

Thank you for being with Slashdot Finance. Buy LNUX!

Re:finance.slashdot.org

[metlin]

Actually that is not necessarily a _bad_ idea.

There are a lot of stories here on Slashdot that would qualify - this one, for instance. And I'm sure there are quite a lot of geeks out there with enough and more knowledge of finance.

Hey, if we can have IANAL, why not IANAE (economist) and the like.

Personally, I think finance.slashdot.org would be a good idea.

Re:finance.slashdot.org

[leereyno]

At the very least we'd be sure to hear some great war stories about .com's that went .bomb.

www.petfood.com... Why buy your cat food at the grocery store for $6 a bag when you can buy it online for $3 a bag and only pay $6 to have it shipped to you.

www.linuxone.com: Proof that imitation is the sincerest form of flattery. Would you believe I actually have a beta of their distro that never saw the light of day! I'm going to have to dig that up sometime...put it on my website.

Lee

Re:finance.slashdot.org

[daniil]

Proposal for a conspiracy theory:

Prove that the dotbomb was a terrorist plot (you could call it "suicide-dot-bomb") to hurt the US economy.

Re:finance.slashdot.org

[Anonymous Coward]

Oh yes, that poorly-rebranded copy of Red Hat.

Re:finance.slashdot.org

[metlin]

On the contrary.

The DotCom boom was necessary for the Internet to be made popular and the new technology economy to settle in.

There was simply no other way - it was just a means of the new economy setting in, and the dust is beginning to settle now. It could not have happened any other way - this is the only way large scale adoption would have been made possible.

And so, contrary to any and all assumptions, it has done a lot of good than bad. Today, despite anything, the US is numero uno in IT. If stupid politicians don't hurt it, it would stay that way too. Countries like India and China merely provide the equivalent of labour - very small amount of true innovation comes out. The real innovation happens at places like MSR or IBM or PARC.

So yeah, the DotCom has indeed done a great deal of good, too!

Re:finance.slashdot.org

[daniil]

Here goes my chance of making millions by selling half a dozen books (all with a different title but practically identical contents) full of logical fallacies, incoherent sentences, and forgeries. Eh.

Re:finance.slashdot.org

[kryptkpr]

So yeah, the DotCom has indeed done a great deal of good, too!

Yeah, some of us were foresighted enough to demand cash paycheques to go along with our "stock options"..

It's just too bad some people got blinded by the possibility of being millionaires within the next 1-2 years and lost everything.

Re:finance.slashdot.org

[nutznboltz]

Prove that the Bush administration was a terrorist plot to destroy the US economy.

Easy to do, there's evidence everywhere.

That's how IPOs goes

[Dancin_Santa]

Say you have a bank account. You are suddenly inundated with tons of cash (almost 2 billion dollars worth!) because you pimped yourself out. Then you stick all that cash in the bank account.

Even at a very low interest rate you can get a significant return on that money.

Obviously, you'd like to do stuff with it like buy jet planes for your managers and little stickers and baseball caps for your engineers, so your total return will be less than expected. But in the end, your huge pile of cash garners you a very nice gain just at basic interest rates. Couple that with some savvy investing (no-load mutual funds!) and you can have yourself quite a bit more "revenue" than before you sold yourself out.

Re:That's how IPOs goes

[bsdfish]

Ok, lets crunch some numbers:

2 billion * 1/4 (one quarter) * 5% (much more than you can get through safe investments) = $25 million. And how much did Google's revenues increase by? $400 million?

Re:That's how IPOs goes

[Anonymous Coward]

Seeing as how the actual numbers are not available online yet (unless you are linked into the conference call), I would assume that 400 million is the estimated 4 quarter revenue forecast (done by the Yahoo reporter, not Google).

If not, you are basically saying that Google will have revenues of 1.6 Billion dollars by year end. A little high for a search engine company with no salable products, doncha think?

Re:That's how IPOs goes

[hkmwbz]

In what way doesn't Google have "salable products"?

We are Google's product. We, the users of their free and popular services. And there are a lot of us out there. To me, Google Groups alone is invaluable in finding information. I use it several times a day.

And not only that, but people don't seem to be very concerned about blocking Google ads. They block banner as and popup ads, and all those nasty things, but Google's nice and unintrusive text ads are often let through.

I think you are underestimating Google's product line. You are one of its products, and Google is making money because millions of people like you and I use them, often every day. And as long as Google continues to be useful and offer something we want, we'll use it, and we'll spread the word, and more and more people will use it.

Re:That's how IPOs goes

[mOoZik]

What kind of a moron would put $2 billion in a bank?

Re:That's how IPOs goes

[Zinch]

If you take a look at their publicly filed 10-Q, you can see that's not the case.

First, their cash went from $149m to $255m, and their short term investments from $185m to $294m. So in total their interest-bearing assets went up by around $230m, not $2bn.

Also, their income statement shows that they had a net interest expense this quarter of $1.5m, so they actually spent money in interest payments overall. Probably on capital leases it looks like.

Re:That's how IPOs goes

[dasunt]

2 billion * 1/4 (one quarter) * 5% (much more than you can get through safe investments) = $25 million.

IANAA[0] but, the Vanguard 500 Index Fund has averaged about 12% annually[1]. Some market indices have been remarkably stable in the long term, and the overhead for a mutual fund tracking an indice is rather low, due to the simplicity of the fund. However, while such a habit of investing has been relatively safe in the long term (say, 20 years down the road), in the short term the returns are relatively unpredictable.

The problem with "safe" investments is that, in the event of massive inflation, the actual return isn't so "safe". Imagine what the inflation of the '70s did to "profits" from bonds.

[0] I am not an accountant (and thus this is not investment advice)
[1] Past performance, of course, is no guarentee of future performance.

Re:That's how IPOs goes

[DrSbaitso]

If the only way Google makes money is by investing their IPO cash, the stock would be worth about 10 to 15 bucks a share, tops. Why would you give money to a company if it was planning on lending it (or investing it)? Why not just invest it yourself and save on overhead? You think Google is better at managing money than Fidelity or Morgan Stanley? Of course not!

Google uses the money that we gave them to finance its growth. Its price/earnings multiple is so high because investors have expectations that the company will grow very quickly (although like a pre-bubble internet company, it would need to grow revenues by leaps and bounds to justify the multiple it now commands).

Re:That's how IPOs goes

[bigberk]

I think you are underestimating Google's product line

I agree, these guys are special. Their text ads (which I learned about here on a slashdot ad) are unobtrusive and extremely effective. I thought online advertising was dead; I was wrong. You see, advertising was dead to marketers that had no technical know-how, and no tact. Google knows exactly what people seek, and they will be a marketing information giant. Just wait...

Re:That's how IPOs goes

[Kevin Stevens]

The interest generated by cash in the bank is reported on earnings statements. As you can read here: http://www.sec.gov/Archives/edgar/data/1288776/000 119312504175503/dex991.htm , the interest generated was 3.8 million for the quarter. Not even a drop in the bucket.

Re:That's how IPOs goes

[ethanms]

Obviously, you'd like to do stuff with it like buy jet planes for your managers and little stickers and baseball caps for your engineers

It is frightening how accurate that is...

Re:That's how IPOs goes

[inburito]

Well Microsoft has about $60B, $16B of which is directly in cash or cash equivalent. Dunno if they have some sort of vault back in Redmond, but that money has got to reside somewhere. Check here for more details.

Ad revenue?

[Nazmun]

Hmm... I might be a bit ignorant about google's business model but um... do they make all of this from ad revenue or something? If so, thats one hell of an accomplisment.

Re:Ad revenue?

[identity0]

No, they also sell search services like a "search appliance" and custom website searching services. See here for details.

I believe they've also licensed their software to some companies who want to build more specialized search tools as well.

Re:Ad revenue?

[Indy Media Watch]

I believe they've also licensed their software to some companies who want to build more specialized search tools as well.

http://a9.com/ is a particularly good example.

Re:Ad revenue?

[mkro]

No, ad revenue is just a (weak) cover. They get their money from DARPA. You see, Google is part of the TIA program, with the main focus on mapping social network. That's right, the search engine, Orkut and GMail are just part of a project to filter out who will be the next McVeigh and Nichols. Or who will vote the Green Party.

Remember, you read it on Slashdot first.

Re:Ad revenue?

[Anonymous Coward]

Seriously, i've been thinking this for a little while now, ever since my perception that the current government adminstration IMO is breaching the extent of individual privacy and choice of religion. No flames please.

Targeted advertising is a business's dream, and individual-based information is what TIA needs. All it will take is for a "national emergency" to occur for the government to seize Google's data, privacy be damned. War-time powers suspension of the Constitution. It could happen.

Count me out: I won't use g-mail or google's desktop search, and I have gotten leary that google might be storing individual search history. Besides, the "web" search on Google has gone to pot -- the first page is all links to online stores, when all I want is information.

Glad to see it

[Bill_Royle]

Despite the guaranteed criticism any company that "makes it" gets, I think Google's a good example of good ideas paying off.

Do I worry that they'll become another Microsoft or Oracle? Sure - but the best way to prevent that is to support the good that they do, while expressing directly to their feedback lines the things you don't like.

Thus far, they seem to be listening. I hope they keep up the good work!

Re:Glad to see it

[mOoZik]

Google, like any other high-tech company, will soon fade and merge into nothingness. Maybe they'll dominate for another half-decade, but it ain't gonna remain forever, so express you joy until that fateful day.

Sorry, I have to...

[Anonymous Coward]

Step 1: Free search engine
Step 2:
Step 3: Profit!

Hell, it worked!

Re:Sorry, I have to...

[Anonymous Coward]

Step 2: Advertisements.
Step 2.5: IPO.

Me too stupid to understand the stockmarket

[Anonymous Coward]

So say if i bought google shares for $100 and waited... the article says they are worth $160 now. SO would I of been able to sell them now and made a 160% profit? Or is it not that simple?

Thanks - wannabe google bandwagon shareowner.

Re:Me too stupid to understand the stockmarket

[Professeur Shadoko]

In all cases, that would only be a 60% profit.

Re:Me too stupid to understand the stockmarket

[Anonymous Coward]

Yeah i meant come out 160% of my original investment.

Any idea if this stock is gonna keep on going? I might grab some as long as the trend is likely to continue.

Re:Me too stupid to understand the stockmarket

[Anonymous Coward]

It's really simple: If people believe it will continue to go up, it will go up. Whey they stop believing it will go up, it will stop and turn around. A lot of people in the business didn't think Google was worth the IPO price before it was slashed. Now Google trades well above that price. Either those guys were wrong or there are a lot of stock owners right now who are wrong. Your choice.

Re:Me too stupid to understand the stockmarket

[hunterx11]

Stock broker: Okay, now before I execute this order, are you sure you understand the risks of stock ownership?

Homer: Absolutely!

Zoom into Homer's brain, with a bunch of people in a dance line singing "We're in the money." Curtains open, revealing a roaring King Kong.

Homer: You heard the monkey, make the trade!

Copernicus Center

[kngthdn]

Gosh, if Yahoo bows down like this, I wonder what Google news says.

I hope this means they'll be finishing construction on their new research center soon.

Re:Copernicus Center

[aardvarko]

You're aware that Yahoo News is merely running a Reuters story, right?

Re:Copernicus Center

[kngthdn]

Yes.

Don't Be Evil

[MojoReisen]

Its nice to see a technology gorilla succeed while retaining their humanity, as in their ethics statement "don't be evil".
Hopefully, more businesses will follow their lead.

Dot-com boom in a single corporation

[melted]

For the life of me I don't see how Google can be worth this much. Yes, the profit is pretty darn good (and deserved), but its market cap is just absurd right now.

Re:Dot-com boom in a single corporation

[spagetti_code]

I've got to agree, this smells of dot-com euphoria. The company has a market cap of 40bn on 52mn of net profit. Despite all the good things google is doing, their core revenue comes from web ads which is a fickle business. They've done a hellofa job, providing a better product (web ad delivery) than anyone else has before, but it sure is a risky lifestyle. I'd really be interested in overall click-through rates.

I haven't seen anything that will create a more solid/reliable/long term revenue stream yet. I'd bet that the day they start charging for gmail or desktop search, their loyal customer base would desert them.

Perhaps we could open the floor to slashdotters - where do you think google could up their revenue stream without annoying us loyal customers?

Re:Dot-com boom in a single corporation

[transformer_dp]

First of all, google will NEVER EVER charge the public for their email or their desktop application. They will shut these projects down if they can't make money from advertising. Secondly, did you examine their income statement? The 52mln is a low ball estimate when you consider they had a 201mln 1 time charge for their yahoo lawsuit (check it out). Lawsuits are bound to occur and there will always be legal expenses but I'd be willing to wager against another 201mln dollar charge in the near future. So if you take away the charge and recalculate the income, you're looking at a company that absolutely obliterated their year-ago quarter. What made the internet bubble so crazy was that companies like priceline, VA Linux Systems, Amazon, and even yahoo were being given ridiculous valuations with very little earnings and huge losses. Google, on the otherhand, is clearly growing at a tremendous rate, they're enormously profitable, hugely popular, and in the possession of proven technology that few large scale players have been able to top. I agree their valuation is very high, but there is at least a token of logic behind it.

Re:Dot-com boom in a single corporation

[Anonymous Coward]

I'd have thought it was obvious. It's because people didn't learn the first time. (1996-2001).

And since they're a business...

[physicsphairy]

I wonder what they're going to do with the extra money?

As far as the search engine wars go, well, I think they've pretty much been declared the winner for now. It will take something very innovative and different from existing engines to have a chance at dislodging them.

So maybe that's where you see things like Gmail and Google Desktop Search coming from? Theres not a lot of room to expand in the search engine arena; not a lot they can do other than branch out into places where there's more room to innovate and expand.

Re:And since they're a business...

[magarity]

I wonder what they're going to do with the extra money?

What "extra money'? When a stock price goes up, the company doesn't get a penny. A company could issue yet more stock at near the newly high price, but that isn't what's happening here.

As far as the search engine wars go, well, I think they've pretty much been declared the winner for now

Please see: AltaVista, Yahoo!, Netscape, and InkTomi all of whom were declared "the winner for now" back in their respective days. Of these, only Yahoo! has transitioned into a major portal. Google is buying up a lot of miscellaney technologies so might be transitioning into an all purpose portal as well.

Re:And since they're a business...

[demachina]

Turbo10 did appear to have some innovative ideas with the deep net concept, in particular going deeper into online databases most search engines were passing over. Not sure where they are on the success curve though.

They tended to fail in my book because:

- their web page are ugly and complicated, dark purple yuck
- You have to have javascript enabled
- Web page doesn't work in Konqueror so I stopped using it.

They generally made searching a little to complicated when everyone is just used to typing in keywords and getting pretty good answers from Google.

Re:And since they're a business...

[pawnIII]

Step 1: Dominate Search Engines - check Step 2: Dominate webmail - currently working on it Step 3: Create Desktop applications - check Step 4: Create Google OS I wouldn't be suprised if Google in the next 4 years would just go ahead and create their own OS. Might as well, they seem to be entering all the other software markets.

Re:And since they're a business...

[physicsphairy]

What "extra money'? When a stock price goes up, the company doesn't get a penny. A company could issue yet more stock at near the newly high price, but that isn't what's happening here.

If you read the excerpt, "Google has reported increased profits compared to the year-ago numbers in its first quarterly earnings report as a publicly held company. Google's revenue figures more than doubled, leaping to $805.9 million from $393.9 million". I hope that answers your question. The only part of the excerpt that even mentions stock price is the last sentence.

Please see: AltaVista, Yahoo!, Netscape, and InkTomi all of whom were declared "the winner for now" back in their respective days.

Question: Do you recall ever saying something like "Just a moment, I'm going to altavista for it?" or "Why don't you try yahooing the answer?" It's true that different search engines have been in the lead in the past, but you are wrong to assert that one has ever enjoyed the same degree of internet hegemony as Google.

Re:And since they're a business...

[adpowers]

There may not be a lot of room to expand in the search engine arena, but there is a /ton/ of innovation left in searching.

I went to a talk by Google on my campus yesterday (by the guy who wrote the MapReduce paper mentioned in the Rob Pike interview a few weeks ago) and it was very interesting. I had heard much of it before, but a lot was still new. He mentioned some problems they are working on that still plague search engines. Currently search engines just look for the words you typed. Google has advanced this a little by searching words that are almost the same as the word you typed. If you search for "burn man" (without the quotes) in Google, the first result is Burning Man. Google knows, probably using machine learning, that that burning, burn, burned, burns, etc. are all pretty much the same idea or concept. This way you don't have to run your search multiple times with different, but similar, words. The example they used in the presentation was [bay area cooking classes]. They had three results that would be relevant, but that would not be shown in the results. One of them was San Francisco cooking class. Another was Berkeley vegetarian cooking course. He showed us an internal program which would return groups based off the words you searched. It looked like it could have been what Google Sets is based off. This technique still has problems, though. He is an engineer, so he typed in "rolling hash," but more than half the results were about weed. He added "functions" to the search and became much more relevant (well, to him :) ). As you can see, there a lot of problems left with searching, and the solutions aren't trivial.

Also, when searching for [bay area], you don't know if they mean San Francisco or Tampa Bay. There are a lot of options for customization as well.

I was talking to some engineers from Google later in the day and one guy was talking about how Google in five years will be much more (and different) than you imagine Google being today. I'm not sure they will release an OS. Their mission statement is "making the world's information searchable and accessible," and an OS doesn't seem to fit in there. Another thing I've heard mentioned (from someone at Google, I think) is that currently we have the problem of having a website between you and the data you want. You still have to type in your quotes and try to think of how to find what you want. Who knows, I'm talking out of my ass here, but maybe Gbrowser does exist, but it isn't like we might imagine. Who knows, maybe it is a browser of information (not websites).

In closing, there is a lot left for Google to do. They still index only a fraction of the world's data, but they just recently branched into printed text. From talking to the Google employee, I got the impression that Google has a lot left to release under its iron curtain. They remind me of the NSA... they are farther ahead in technology and research than most give them credit for.

Andrew

Damn! I knew I should have bought some GOOG...

[fugas]

To be totally accurate, GOOG soared even higher, to 161.79, in After-Hours trading. That's a nice 14.67% increase over the previous close.

Re:Damn! I knew I should have bought some GOOG...

[TopShelf]

And it's even climbed above $170 this morning before the open. Watch the lemmings go!

Don't take this as a troll, but..

[mumblestheclown]

• Closed source
• Multi-Billion dollar corporation
• Single point of information control
• Monopolistic Practices
• Secretive

Explain to me again why we should be cheering for them? Yes, it's a useful service. But MS stuff is likewise useful (despite what many of you think). So what if it's free for you to use? They still have a business model.

The best thing I can say about google is that it is unsustainable. Consider if the company is worth X billion dollars now. Well, even the most armchair businessman here will tell you that it wouldn't take a billion dollars to build a duplicate google system. It wouldn't even take a twentieth of that. And, while google is nice and popular now, if a better search engine came along with slightly fewer ads or whatever else perceived benefit, it would seriously erode google's traffic and cause actualy *gasp* competition and choice for advertisers.

and no, Yahoo and its overture systems are not an alternative.. they are a different service that targets different markets.

What I am suggesting is that google is selling a very generic, easily duplicatable service if somebody just got the funding to hire the right engineers. Google knows this.. that's why they are trying very hard to build all sorts of peripheral stuff like gmail and so forth, but the fundamental (99%+) business is still the search engine.

Re:Don't take this as a troll, but..

[mpoulton]

it wouldn't take a billion dollars to build a duplicate google system. It wouldn't even take a twentieth of that.

Really? They have a LOT of hardware. Lots of it. It's specialized, too, not all off-the-shelf stuff. More importantly, though, they have intagible assetts worth much more than their equipment -- code. Googlecode is about as non-trivial as it gets. To write it all, they have some of the smartest engineers in the world, and those engineers aren't cheap. Just as important as their technology itself, they have a massive user base that no other search engine can match without years of media exposure and word-of-mouth. They have an established reputation for fairness and avoidance of underhanded manipulation of results. I believe those factors make it impossible to compete with Google in the short term, even if their hardware and code could be replicated for a few hundred million dollars (a more likely figure than $50M).

Investors like short-term results. Try telling your VC's that they should invest $150M in a search engine project that replicates something already in existance, and won't be a moneymaker for at least 5 years. Think they'll bite?

Re:Don't take this as a troll, but..

[mumblestheclown]

Investors like short-term results. Try telling your VC's that they should invest $150M in a search engine project that replicates something already in existance, and won't be a moneymaker for at least 5 years. Think they'll bite?

Sure they would. Five years is only unreasonable for such aproject if you have a dot-com mentality. Five years is perfectly normal.

But the real question is whether you could convince them to invest into making a market competitive. In this case, I think they would, since google's exaggerated numnbers show that there's plenty of room for at least two players.

Even if we accept your $150m number, this is still a far cry from the billions that is google's valuation. So, let's double your number to $300m. A lot of money, yes, but I think most investors can see that spending $300 to get something that is valued at $1m + is not much of a stretch.

Notice also how from an investor's standpoint it's a pretty safe bet since there is a natural alternative - companies that do someting innovative with search tend to be bought be google or yahoo and a well funded company would be particularly buyable since with all that cash any threat to enter the market as another search engine would be credible.

But it starts with that you have to hire (or hire away) top quality computer scientists and the like.. not A+ Net+ certified technicians.

Re:Don't take this as a troll, but..

[xenocide2]

Well, I find it hard to cheer for a convicted monopoly and market bully. I think the industry atmosphere after the DoJ let MS off easy has been such a hinderence to innovation and startups that its been a disservice to the economy on the whole.

Re:Don't take this as a troll, but..

[Anonymous Coward]

You're right. Eurotunnel was never built. So silly of me. Also: private equity doesn't exist. It's hallucination shared by me and a few million of my closest friends. Oh yes, and also large companies who have the resources on hand never invest their own money in large engineering projects, because as we all know, no satellites have ever been launched.

I would mention my credentials in money raising to you (but I have sat on both sides of the table), but, I mean, what's the point? This is slashdot. You learned a little about VC funding during the dot com days and now everything looks like a nail to you, as it were.

Investors are highly unlikely to give that sort of money to an unproven bunch of slick speaking types with a foosball table in their office but not much else, but there are certainly very real situations where such things can be funded, despite your thumbnail of knowledge.

Re:Don't take this as a troll, but..

[Anonymous Coward]

Incidentally, dumbass - google "VC Investment Timeframes" duh. I could look more for you, but what's the point? You're all hat.

Re:Don't take this as a troll, but..

[TinyManCan]

As someone involved in large Enterprise Scale operations, I can say that Google has certainly done something that is not easily duplicated. They managed to get an application running on 10,000 servers that could easily handle a load and dataset that is massive.

Google's strength is not in their search engine, or in gmail, but their ability to execute new appications in a highly available and supportable manner. Google has developed an Operating System for the web so to speak that is head and shoulders above any other system out there currently.

If Google continues to keep delivering solid and functional applications that meet my, and other users needs, we may see a future where the only OS you need on your local computer is a web browser.

That is why this stock is going through the roof. This company has capital, resources and manpower to deliver a Microsoft Killing blow, and is aquiring the skillset and experience needed to pull it off each day they run 'the worlds biggest application.'

Re:Don't take this as a troll, but..

[marc252]

No, I think you miss the whole point. It's not about hardware or software, it's never been. I think it's about launching a product better than your competitors and making people aware of your name, brand and style.
If you launch a google clone it won't work if it's not much faster or much precise, google has the experience and the market base, when someone comes with a new engine it will need to attract peoples attention and that is worth billions!

Re:Don't take this as a troll, but..

[gfody]

you can't compete with google. they've bought every single engineer with a phd in modern information retrieval.

Re:Don't take this as a troll, but..

[Anonymous Coward]

hyperbole anyone?

Re:Don't take this as a troll, but..

[Zemplar]

"But MS stuff is likewise useful (despite what many of you think)."

Remember not to long ago when a search for "XFree86" on msn.com resulted in an error for adult material? But of course, a search for any "XFree8x" went as anticipated.

At least I've not seen blatent censorship in Google site - especially to competing technologies.

Re:Don't take this as a troll, but..

[Anonymous Coward]

No blatant censorship with google? have you been reading any slashdot stories over the last year? Google has no problems putting profits over principle when it comes to working hand in hand with informationally (and otherwise) oppressive regimes.

Re:Don't take this as a troll, but..

[nmk]

>> I believe those factors make it impossible to compete with Google in the short term, even if their hardware and code could be replicated for a few hundred million dollars (a more likely figure than $50M).

I, quite frankly, don't buy into any of this. I believe that Microsoft is currently the biggest threat to Googles search monopoly. Their intention has always been to control as much of the users internet experience as possible. I think MS missed the Internet boat with XP, and hence allowed a lot of brands to be established. However, with Longhorn, they are taking OS/internet integration to a new level.

Despite what Geeks would like to believe, MS has a lot of credibility with regular consumers. The MS search service is going to be pushed very aggressively in Longhorn. You'll most likely see a search bar integrated into the Longhorn desktop. If you see the Longhorn beta's, there is a large vertical bar on the right side of the screen, which gives the user access to a variety of local and remote services. Who wants to bet that an Internet+local file search bar will be a permanent resident on this bar.

With this level of integration, MS doesn't have to provide a much better serviced than Google. All they have to do is provide a service that doesn't suck, and Google will have major problems on their hands.

Re:Don't take this as a troll, but..

[gtoomey]

Its well known that
- Google has from 50,000 - 100,000 servers
- they run linux on "barebones" machines (1u cases with no sides/top) to cut costs
- This paper by Google engineers documents how Google's distributed, fault tolerant system works.

Re:Don't take this as a troll, but..

[MicroBerto]

Why should I cheer for google? Because they have an awesome product and have done great things for our community.

Why should you be so sour at google? Because they did it, and you didn't? Because they're brilliant, and maybe you're not?

Go and "duplicate" their service, I dare you. You stand no chance.

Google deserves every dollar they make, because they are the best ones doing it. Until you or anyone else can beat them, then put up or shut up. Or don't support them. I gladly will.

A9.com

[Antony-Kyre]

I could have sworn I was logged into a9.com with my GMail account. It's not happening now, but it's weird. I could very well be wrong.

Monopolistic practices?

[Chuck Chunder]

Where?

MOD PARENT DOWN: TROLL

[SlashdotMeNow]

Excuse me but where and how exactly is Google employing monopolistic practices?

Re:MOD PARENT DOWN: TROLL

[Anonymous Coward]

Limit Pricing, for advertisers, for one.

"Phase 2"

[Vollernurd]

Google's recent run of new products and financial results is starting to remind me of that old Onion story about how "Starbucks Starting on Mysterious 'Phase 2'". All their outlets were closed and boarded-up and Starbucks management were readying their mind-control devices.

Now Google is getting ready for its own "Phase 2" having made me sign up for Gmail, that desktop search thing, etc.

Time to put my tinfoil hat back on.

Re:"Phase 2"

[themusicgod1]

Please tell, how exactly you were made to use GMail/Google Desktop? I think Google may turn out to be frightening someday, but for the time being they are completely optional. This being-optional will keep them straight for now. In the short run this means demanding an open source linux client for the Google Desktop. As a potential ..er...source of data you should at least be able to ask for that much.

Yahoogle

[zobier]

Has anyone else noticed the similarities between this and this? Hell, it even has the 'did you mean' and calculator features!

Re:Yahoogle

[Anonymous Coward]

Holy crap!

Hey, if Windows can sue Lindows just cause it is spelled similarly, cant Google make them stop doing that?

I mean that is almost identical except for the logo change.

Re:Yahoogle

[ghettoboy22]

Yeah, but they don't have built-in FedEx tracking!

I just wish I would have bought more GOOG. I bout 2 shares on IPO day... $100.xx.... not too bad a return so far, but to think at this rate I could have sunk everything in and made some bank....

yeah yeah OT

Re:Yahoogle

[Dr Kool, PhD]

2 shares?? Is that a typo?

What are you paying on commission, $10 probably?? $20 to buy and sell, that's 10% right off the top you paid for your investment. I'm glad that it's worked out for you so far though.

Re:Yahoogle

[Underholdning]

I'll see your Yahoogle and raise with a Microsoogle

Re:Yahoogle

[dasunt]

Google has potential, but at the same time, there is nothing to prevent the share price greatly declining in value after the peak.

Note how that linked graph is logrithmic -- if you bought Yahoo at the top (say, around $120/share), your investment would have declined to just over $35/share.

Two questions you might want to ask yourself is how risky is google's long term future, and if you are investing for the short term, can you predict google's peak and get out near enough to it to justify the investment? [Remember there are broker fees out there if you are buying in small quantities!]

I expect people to get rich quickly off of the GOOG stock. But I also expect people to lose their shirts in GOOG.

Re:Yahoogle

[Anonymous Coward]

Yahoo did a stock split earlier this year, so it would be more like $70 - which is a great recovery from around 5-7$ per share (split adjusted) a year and a half ago. (ObDisclaimer: I own Yahoo shares. Got mine at $35 pre-split, or $17.5 per current share I hold split adjusted)

Re:Yahoogle

[dasunt]

Yahoo did a stock split earlier this year, so it would be more like $70 - which is a great recovery from around 5-7$ per share (split adjusted) a year and a half ago. (ObDisclaimer: I own Yahoo shares. Got mine at $35 pre-split, or $17.5 per current share I hold split adjusted)

Unless I'm greatly mistaken, the graph is adjusted for splits.

Re:Yahoogle

[lifer_red]

Yep - but the yahoo one's worse. Try viewing with a default background other than white; the google page stays white, while the yahoo page has a white square around the "Yahoo!" graphic and the rest of the page with your default colour. Unprofessional, I reckon.

Re:Yahoogle

[ThJ]

Oooh... This is new. Microsoft top ranks my site for the search "thj paintchat". *suddenly starts liking them*

Re:Yahoogle

[TheBoostedBrain]

They are missing some interesting features like the 'ooooooo' representing the result page number, the 'I'm feeling lucky' button and the content sensitive ads.

Re:Yahoogle

[Peldor]

Hey, if Windows can sue Lindows just cause it is spelled similarly, cant Google make them stop doing that?

So you WANT Google to be like Microsoft?

Re:Yahoogle

[adpowers]

Don't diss small investors, man. I bought my first stock when I was in 8th grade. My dad encouraged me by matching my input funds and, since he worked at a bank, he was able to get me commission free (or like $1 commission trades).

The stock went up for a while before BAM!, the .com bubble burst. I learned my lesson... invest smarter. Since then I have been more cautious when investing, which has paid off. I bought Apple a year and a half ago, right around its two year low. Since then it has gone up over 200%, greatly improving my portfolio (and dominating the NASDAQ and Dow).

The most powerful force in the universe is compound interested, and the sooner you invest, the more you can make in the end. Well, that kind of turned into a post about buying stocks young, but it isn't completely off topic. Most young people don't have much money, and you don't know anything about him, so Judge Not, because when you talk about him, someone else is judging you. People shouldn't be prevented from investing just because they don't have much money. $200+ is a lot to some.

Andrew

Re:Not so rosey

[kahei]

If your father's on the board, that narrows down your identity pretty well -- I don't think posting AC will help much!

Which leads me to suspect that either

a) Your father is not on the board because you are Supertroll (trolls at a rate of 3 billy goats per minute!) or

b) Your father is going to have harsh words with you if he ever reads slashdot :)

I agree with what you said, though. It's cute the way geeks randomly divide companies into 'good' and 'evil' while the companies just go on trying to make a profit -- kind of like primitive man personifying the thunder and rain.

Say it with me people

[GiveMeLinux]

Irrational exuberance.... irrational exuberance....

The future is gloomy.

[Anonymous Coward]

I say this because anytime you get a company that has a board, you will have people just wanting to be on the board for the "cludbness" and the money. They don't meet too often, and are so far away from the business they don't have a clue. I can understand why the Google founders did it- a heck of a lot of money! Any how the board will decide where to go with the compnay, just ask Steve!

Re:The future is gloomy.

[gtoomey]

The founders ARE on the board, and ther board is elected by shareholders.

If you were a major shareholder with $100M invested you want a say in how things are run.

Limit Pricing

[R.Caley]

Given they are rakeing in truckloads of money, in a market (web advertising) which most people consider dead,they can't be pegging their prices down so very low.

Only when there is a downturn...

[Dr.Knackerator]

Will we see what the company is really made of now. If it follows standard public company practice it will layoff staff and cut back on things that aren't immeditaly earning revenue.

(becauase apparantly they asked 1000 shareholders what the solution to reduced profits was and they all said layoffs. or maybe that didn't happen)

who knows what will happen when (if) that happens?

Oblig John Burr William quote

[bojanb]

"A business is only worth the profit it will generate from now until doomsday, discounted back to the present, adjusted for inflation."

So there.

GOOG vs. SCOX

[Anonymous Coward]

> http://finance.yahoo.com/q/bc?t=6m&s=GOOG&l=on&z=m &q=l&c=scox

Here's to hoping this trend continues : )

Re:GOOG vs. SCOX

[Anonymous Coward]

Clicky... GOOG vs SCOX

All is right in the world.

Re:Not so rosey

[madaxe42]

Son??? What have I told you about disclosing our uber sekrit evil world domination plans? I for one, welcome our... selves. Now go to bed. No milk and cookies for 20 minutes for you! Shame!

Nobody knows

[nuggz]

The price is only determined by what someone is willing to sell AND buy a share for.
If everyone knew it was going to go up a lot more, why would they sell their shares to someone else?

I think it will go up because of momentum investors, but I don't think it's worth 40 billion dollars. This isn't BUD.

Re:Not so rosey

[Oddly_Drac]

"It's cute the way geeks randomly divide companies into 'good' and 'evil' while the companies just go on trying to make a profit"

Who said anything about 'random'? I tend to follow quite a few companies fortunes and Google is one that hasn't made many compromises in it's run up to floatation, but it's going to be interesting to watch what happens if a controlling interest goes to a slightly less ethical entity.

The important point is that corporate entities have no possible reason to act in an ethical manner, except for public opinion and dumping their products faster than meat-flavoured icecream. My choice of bank now has an ethical investment policy, and I've been shifting my stock portfolio to avoid any companies that hover around the grey areas. And you know, it can be effective.

Re:Not so rosey

[Anonymous Coward]

But we can classify them as evil, due to their actions.
Sony is evil... Google is not.
Fox is evil... Transmeta is not.
Disney is evil... Red Hat is not.

It is quite obvious that the cause of evil or good behaviour from a company can be traced back to the executives in charge - as they change, the direction of a company changes, and companies can go from mostly good behaviour to mostly bad and vice versa.

There's no harm in seeing them as good or evil - these are useful distinctions that can be used on any human-related endeavour.

Just because the companies are trying to make a profit does not excuse them from being judged for their actions.

How do you think Google became number 1 anyway?

[Bloke in a box]

Back in 1998/99 Altavista was one of the webs largest search engines and also Yahoo were larger than they are now.

Then good ol' Google came along with a very refreshing clean, crisp interface, an unbelievably quick search time (compared with the page loading time of AV), and no pop ups, image adverts and most of all the search results were more relevant.

Those are the reasons that people flocked to use Google so quickly. I run several sites that run Google Ad-Words and one of the options for presenting these ads is to use images - but what the Google team realised a long time before the majority of other ad-networks did is that regular net users mentally block out image ads (I know I have done for years) but those of us that skim read will still take into the information of a text advert.

I disagree very strongly that Google isn't sustainable as the growth in profits for Ads proves (especially as thousands more people are getting access to the internet every day).

There are now plenty of clean, crisp quick search engines available - especially with the number of open source spiders available, but Google has a reputation good enough that people have no reason to swap engines. Until someone comes up with an idea that Google hasn't thought of, I see no reason why Google will be knocked off the top spot.

Re:How do you think Google became number 1 anyway?

[Anonymous Coward]

Yahoo were larger in percent of the audience at the time. However Yahoo in terms of pageviews, revenue, earnings and unique visitors are many, many times as large now as it was back then.

Nice gain

[nuggz]

I don't think "basic interest rates" can give you a very nice gain.
I consider 0-5% for an investment poor, under 5-10% is okay, and over 10% is very good, but I'm conservative.
Assuming google did have 2 billion in the bank, at even 10% bank interest, that is only $200 million, with a market cap of 40 billion, that is works out to 0.5%, not even enough to cover the brokers commission when you buy the stock.

Where's the evil?

[JaredOfEuropa]

Closed source

So? I can see why they wouldn't want to be too free with their search engine technology. For once, someone might easily duplicate it, but more importantly, people might exploit inside knowledge of the system to bump their own webpages up in the ranking. Pageranking has to rely on certain 'tricks' rather than a fully objective and fair mechanism, and in this case, obscurity is way to go.

Multi-Billion dollar corporation

I don't see this as a reason to stop cheering for them. Nothing wrong with financial success.

Monopolistic Practices

The question is: do they simply have a monopoly on certain things, or do they use their monopoly to illegaly control prices or keep out competitors? For one, I don't really see where the monopoly is... advertising? I wasn't aware that advertisers have to go through Google these days...

Secretive

See my first point.

Google has a good and eminently useful core product which they provide for free. They make money off ads like so many free web services, but they choose to do so in a rather low-key manner. In addition they are starting to offer other free services, not by copying the competition, but by listening to the customers and raising the standard for everying else. Compare GMail to other free email services, and you'll see what I mean.

I guess many people are cheering for Google because this appears to be a company with good ideas, but also with good ethics, a drive to do things right, and attention for their customers; qualities that other companies often see as cost centers and something that they have to pay lip service to, to further their public image. With Google it seems that these very qualities are the things that made them succesful. It's nice to look at a company that works because of these good practices rather than despite them, because it reinforces our belief that the world works as it should, and that the good guys can finish first. (Yes yes, it sounds melodramatic, but I don't really have any other way to put all this).

Re:Where's the evil?

[Anonymous Coward]

> Compare GMail to other free email services, and you'll see what I mean.

Yep. I cannot subscribe to gmail.

That's the main diffference.

Timing.

[ear1grey]

Google has attemped a pre-emptive strike in many of their ventures by running very large scale beta services (distinctly different from beta applications).

The Google Desktop beta focuses directly on Microsoft Desktop products to the exclusion of others in a direct attempt to beat Microsoft to market.

Google are using time-to-market to their advantage. Their services may be duplicable, but their ability to roll out beta's and garner market awareness with great speed is far more difficult to ape.

Why Google did their IPO...

[ites]

You imply that companies have a choice in the matter: stay private, go public. Google had given out share options and reached the maximum number of shareholders that a private company can have (500, iirc). The IPO was a legal requirement. I don't think, but I may be wrong, that boards are legally obliged to increase shareholder value; they are obliged to answer to their shareholders, but this can mean many things. For instance, taking a long-term view to value can often mean being less pushy in the short-term.

Re:Why Google did their IPO...

[gomiam]

Actually, that wasn't the reason for the IPO (according to a Newsweek report I read some time ago).

The reason was they would have to present their accounting books to the Administration, since they have gone over some profit limit (or something like that). The funny thing is, if they really wanted to keep the company out of Wall Street's hands, they could have just incorporated it (I think that's the term for a private society-owned company -the Spanish term is sociedad limitada-) and they would probably get the best of both worlds: a known company with known stock value, yet not publicly sold and bought.

Excuse me if my writing isn't too good, but my knowledge of economic English terms is quite scarce.

So I am one of their products...

[Anonymous Coward]

and people use me, often every day? :S

Your re-definition of product is broken...

Google vs. Microsoft

[karnat10]

But MS stuff is likewise useful...

I don't think so. A "Google by Microsoft" would be cluttered with assistants, "you have new ..." messages, ActiveX components, and vulnerabilities.

Google loves simplicity, while most applications M$ releases look bloated and ugly. They may be good marketers, but their products are technologically mediocre, and they've got no style.

We're in the money!

[AIX-Hood]

$161 in after market trading you say? (giggles like a little school girl upon realizing that my google shares is now worth double within a month)

Sony Includes Google Toolbar

[Anonymous Coward]

I work for Sony (Not outsourced..yet)...(Last stop for your problem PC help desk hell)

Google Toolbar has been added to all new desktops and notebooks. It's installed by the default Factory HD Image I believe.

Would this be something Google got paid for by Sony to include or the other way around since Google Toolbar has the means to generate revenue for Google?

Revenues

[HotshotXV]

According to DeLoitte and Touche, Google's revenues have increased over 430,000% over the past 5 years. If that rate continues, Google will own every search engine by '09.

yes, it is ads

[nothings]

Not at all. Although advertising is still a major source of revenue, Google makes plenty of business offering enterprise solutions.

Not significantly. At least not by sources of data available to me (do you have a cite?). At least not according to their IPO and their quarterly report ending June 30:

several attempts to get a reasonable faux table, prevented by ECODE's inutility and stupid lameness filter, deleted

Revenues, by revenue source, as a percentage of total revenues three months ending June 30 2003 Total advertising revenues: 97% Licensing and other revenues: 3% three months ending June 30 2004 Total advertising revenues: 98% Licensing and other revenues: 2% six months ending June 30 2004 Total advertising revenues: 98% Licensing and other revenues: 2%

See page 21 of the above link for the nice table with that and more.

So, yes, grandparent was right, this all comes from people clicking on google text ads. Of course, grandparent shouldn't be surprised, as this isn't new information; the same information (ending in March 2004) is available on page 40 of the old IPO prospectus. The new numbers are bigger, of course, but the old numbers were not insignificant.

Google teams up with RIAA and MPAA

[Ingolfke]

In late breaing news Google announces that it's Google Desktop Search tool not only provides outstanding local file search capabilities, but also relieves the burden on consumers of questioning whether all of your digital media is properly licensed. Google's search tool quickly identifies all digital media on your local machine and validates this data against a secure registry maintained by the RIAA/MPAA. If any unlicensed media is found Google Desktop Search will automatically protect consumers from legal action and financial liability by searching through Microsoft Money and Intuit Quicken files for a valid bank account. Electronic requests are sent to the consumers bank and funds are automatically transferred to the RIAA and MPAA to ensure the files are correctly licensed. Google only charges a $1 service charge per piece of media, a small price to pay for peace of mind.

An RIAA spokesperson noted that in some cases media is double or triple licensed using this system. She went on to explain that "the issue is being looked into", but in the interim to ensure that everyone is treated fairly an easy to use refund* system has been put into place. All that is required is that you send your name, address, social security number, daytime and evening phone numbers, bank account number, a sample of your hair, and a self addressed stamped envelope to

Quick-E Payment Processing
27/28, Phase II
Udyog Viharl
Gugoan - 122016
India

Please only send communicaiton if you have downloaded and installed the RIAA/MPAA enhanced version of Google Desktop Search, included the piece of your hair and the self addressed stamped envelop (with enough postage for the return trip from India) and have verifiable proof that the digital media you were charged for is properly licensed.

Please expect 6-8 months before recieving a response. All requests for the status of an inquiry should use the method listed above.

* - The term "refund" specifically means a credit will be provided equal to the amount that was charged for already licsensed media. This credit may be applied to any purchase of media from the American Top 40 charts or movies on VHS that made less than $15 million at the box office. Purchases must be made within 60 days of the issuance of the credit. The credit is only redeemable at Sam Goody locations in Kansas and Wyoming. The credit is non-transferrable. Internet purchases are prohibited. A valid RFID enabled passport will be required for authentication.

Overpriced?

[Anonymous Coward]

So, I'm the only one here who thinks its overpriced? I don't think this will last long. We've seen PLENTY of other tech stocks with this kind of behavior and most them turned at some point.

Don't get me wrong, I love Google, but stock prices just don't go up for no reason unless its pure market speculation (like the bubble). Once it drops by about 10%, I think I'm going to short it!

My Ad Was...

[darkmeridian]

..A google ad saying "Can you boost the profitability of your business?"

I don't know, google, can I?

IPO Price Not Crazy After All

[ZenFu]

I guess this explains the initial IPO price of almost $135.

I guess this also explains why the insiders decided to sell less shares when the price was lowered.

Or is the stock going up just because there is no bad news and no major investors have been dumping their stock. Yet.

Re:IPO Price Not Crazy After All

[jtwJGuevara]

No, the IPO wasn't too crazy, but the newly projected stock price is well beyond crazy. I was viewing CNBC this morning and heard that one investment firm (I forget which) upgraded google's stock to perform in the $200 dollar range. That would give google a P/E of about 100. Such a price to earnings ratio is way too much, regardless of how well the organization is performing. Such speculation is the reason we had the late 90's bubble and the '29 crash.

Still overpriced

[Fished]

Disclaimer: I own some GOOG, and I've done pretty well with it.

But I wouldn't buy any more at current prices. Even with a 100% increase in profits (which is what they've done) they're trading at a P/E of 180. My general rule is that the earnings growth needs to be less than or equal to the P/E - which means I'd buy GOOG at a P/E of 100, or maybe even 120. (The odds change a bit when earnings growth is truly phenomenal.) But 180 is overpriced by 30-40% at least. Worse, I think that we have to expect their earnings growth to slow down a little in the next few years.

You can't make money in the long run by overpaying, no matter how good the company is.

Several ways to look at this

[bigberk]

Given the way the stock price has increased, I think many of us were correct when we identified the blatant poo-pooing of google's IPO as a deliberate strategy by the organized "analysts". It seemed out of place at the time.

• Rule #1: Analysts are full of shit. They always have been, they always will be. You should have gotten suspicious when you kept hearing 'headlines' about experts warnings against GOOG. Do not ever act based on analyst opinions you see on finance.yahoo; recommendations on CNN, CNBC. Take these opinions with a scoop of salt.
• Rule #2: The periodic earnings report mean next to nothing. You think I'm joking? Ask any real accountant. Periodic financial statements are not audited, nor do they reflect an entire operating cycle. Expenses might be deferred to later on. The real story is to be seen when a year or two has passed. After such a period, you will have seen two audited reports and the period is sufficiently long that revenues and expenses can't be shuffled to look favourable. In other words, if something bad is happening it can't be hidden forever.

Those are my recommendations, as an accounting student and someone who has done decently with market investments.

gBay?

[GeorgeH]

Did anyone else notice that both Google and eBay posted $805.9 million in revenues in Q3? (spotted at Signal vs. Noise)

P/E of 230

[peter303]

Annualized earning of $208M with cap of $45.59B. Sounds like a classic InterNet bubble to me.

Re:Not so rosey

[metlin]

Well, while you are at it, why not.

Intel is evil, AMD is hot.

There!

HAHA sure they DID it VANILLA !

[dindi]

yep, they slashed all the RELEVANT results with the vanilla update, so all those who are serious now have to fight over $1+ US /click on googleads.

They make extra with adsense too ...

in the meanwhile I tend to search on yahoo more and more since on google the usable results fall back on the 10+ page range many times ..

I really keyword/title my sites so it is relevant to the search and content, and still I see results that are not even about the subject ....
seems that they are using a "reverse ranking" the more relevant the further from the top ...

yes mod me down I am just a looser whoi lost his rankings, and now I am upset ....

but wait, no .... I really use yahoo now ..

What makes Google different

[scrappy64]

Here is a paper written by Sergey Brin and Lawrence Page the basic composition of google's search engine. You can find the article here. Makes for an interesting read and gives a little insight on what makes google tick.

It's official. Google investors are insane...

[EmagGeek]

I would like to know just what google investors are thinking. It must be wild speculation, because I don't believe any rational investor will pay 364 times earnings for a share of stock, in any company - least of all one that has only been on the exchange for a VERY short period of time...

Someone please convince me to spend $175 on a share of stock that is going to earn 19 cents...

Re:It's official. Google investors are insane...

[Anonymous Coward]

The only question that Google can't answer right now is how many times their stock will split before settling down.

You can buy it now before it splits, or buy it later after it splits (don't buy after the third split, though).

Of course their revenue is up...

[museumpeace]

its all Roland's fault. I you google for "roland piqu"...not even the whole name, the top link returned is roland's ratings. The guy is on a quest to draw more hits than cnn.com but as a side effect of nobody remembering how to spell his name, the lookups pump a lot of traffic through google.

Google is alreafy YA Evil Corporation....

[spentrent]

...what makes you think it's not? Google is an advetising EMPIRE. The new television.

Ever seen the movie Minority Report? Advertising is only a fraction of a percent of how intrusive it will be in five years.

Why do you think they acquired Blogger, for one?

GBrowser

[Adam9]

Reminds me of GBrowser and Google hosting the Mozilla Conference..

Re:Yahoogle and Msnoogle

[tchalvak]

Now the only question is whether they (both yahoo -and- msn) can follow the -meaning- that underlies those search pages. Simplicity of interface. A purpose directed at -exactly- what their users want, with only the minimum obtrusiveness for self-interest (i.e. the text-based ads) getting in the way.

Anyone who has seen their portal pages would assume that a simple interface ranks very low on their priority list.
If they haven't really grasped the overall concept of simplicity, then they will simply continue to follow after google like a loyal puppy or shoot their attempt at simplicity in the foot somehow.

Personally, I can only hope that they follow but do not unrightfully pass by google's lead. Spreading the best aspects of google can be good for everyone that uses the internet, but stifling google's innovation would be a good means to a bad end.

Even more interesting, though, will be the fact that as the competition grows more unruly, google will have to keep being innovative to stay ahead.

In the end, I'm looking forwards to what they all will do next.