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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."
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?
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.
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.
English is easier said than done.
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.
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.
ich bin der musikant
mit taschenrechner in der hand
kraftwerk
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.