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Google Execs Happy With $1 Salaries
DarkClown writes "ZDNet is on the one hand reporting that Google execs will keep their $1 salaries again this year, and on the other hand is reporting that the executives cashed in more than $160 million worth of stock last month." From the stock article: "Since the search giant went public in August 2004, Brin has sold about 6.5 million shares at a market value of $1.68 billion. Page has sold about 5.8 million shares at a market value of $1.4 billion, according to calculations from Thomson Financial. Chief Executive Eric Schmidt, who was brought in to run the company before it went public, has sold more than 2.1 million shares, worth more than $502 million." They could be getting a multi-million dollar salary *and* the stock money. Good faith efforts go a long way in my book.
But can we really say it's some amazing piece of good faith that they settled ONLY for 1.4 billion dollars in salary for the year?
Can we honestly say "good faith" is their motive and not income tax?
In addition to the billions they are making from their stock, their $1 salaries also allow them to qualify for food stamps. Just another perk...
Unknown host pong.
I believe that Capital Gains Tax is higher than Income Tax (at least from personal experience). I'd be willing to believe "Good Faith" based on that.
"Oh my God. This is terrible. This is the end of my Presidency. I'm fucked."; ~ Donald J. Trump
IANASME (I am not a stock market expert) so maybe someone can explain this too me.
The SEC has mandated stock option expensing methods because previously too many companies made executives' pay pretty much disappear - instead of paying them, they gave them options. Now that they are expensed, what is the difference? It just seems to me as if the executives are getting paid billions of dollars and Google's bottom line should reflect that with the new expensing procedures- whether it it direct compensation or stock options.
Thanks,
Jack
They pay tax on those stock sales
So, do they divy their one dollar up into bimonthly pay checks?
The news here is that the executives are selling their stock -- not normally considered a show of faith in the company. Brin and Page have each dumped over a billion dollars worth, and Schmidt another half-billion.
What I'm listening to now on Pandora...
In this case, the Google founders and executives are cashing in on their IPO. It's not really the same as the typical salary to stock option crap that's going around. Let's face it, if you could get paid via capital gains (15% tax rate, until it's not taxed at all...) instead of salary (38% tax rate), why would you want a salary?
Make dividends and true stock investments (investing in IPOs, new stock offerings, and startup stock payments) taxable at the capital gains rate and revert all the daytrading/recycled stock profits to the full tax rate; it will benefit new technologies and put the brakes on silly speculation trading (read: gambling for the rich).
Let us live so that when we come to die, even the undertaker will be sorry -- Mark Twain
So Steve Jobs pulls this stunt too, what about minimum wage laws? :} (seriously)
Can we honestly say "good faith" is their motive and not income tax?
Receiving additional income does not result in a situation where you're paying more in taxes than that income. So Page, Brin and Schmidt suddenly started making $1 million/year in salary, they would still be taking home more money after income taxes than if they weren't receiving that money. So there's no motivation based on income taxes to not receive additional salary.
Personally I think they take $1 salaries because they want to appear approachable at work and remain effective leaders. Steve Jobs does the same thing.
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Minimum wage laws refer to people making an hourly wage, "non-management" workers.
500GB of disk, 5TB of transfer, $5.95/mo
It isn't about tax evasion or good faith. It's a way to link productivity to company success. If stocks are high, they make more money, if they aren't they make less. Many companies have started doing similar things, as linking rewards to success is far more profitable for everyone. Shareholders benefit greatly, as the leadership has more invested in the company, so is more focused on its success. Paying someone a 500 million/yr salary with no difference if they do well or poorly leads to poor results. It's basic economics and psychology: proper motivation results in proper rewards.
Microsoft Sucks, F/OSS Rocks. I get mod points now right?
Steve stole the idea it isn't his either.......
Four months after Ford Chairman Henry Ford II fired Iacocca as president of Ford in July 1978, he took up with Chrysler and promptly figured out the automaker was in big trouble. He fired executives, bargained with the United Auto Workers union to lower salaries and benefits for hourly workers, lowered his own salary to a dollar a year, and secured loans from the federal government to bail out the company.
I believe that Capital Gains Tax is higher than Income Tax
OK. What about Google's payroll tax liability?
There is a difference between Stock, and Stock Options. These guys aren't just the CEO's, they are the founders. When they sell off stock, they are selling off their parts of the company they founded. You know, the one you use every day for searching, that has enriched your internet experience. Presumably they and their investors have some split of the available stock, and they are simply adjusting this ratio more toward the investors. They could quit tomorrow, and STILL sell that stock, or keep it, and just live off the work they've already done.
The point is, they aren't being PAID in stock (That's not part of their current salary, reimbursement for their current work), that is the reward they have for risking their money, work, and reputations building this thing called Google in the first place.
Where are we going, and why am I in this handbasket?
Or to be more truthful-- another day another 0.0027378507871321013004791238877481 cents
Aren't they supposed to be paid minimum wage?
crazy dynamite monkey
I think you are missing the entire point. Most executives don't opt for similiar salaries, because they don't have faith in the stock price of the company. If I am an executive of a company where the value of the stock GOES DOWN, I could be making a whole lot of nothing if I am only paid in stock.
You have to be pretty confident in the value of your company to accept stock as payment.
In terms of business, Google so far is a great business that tries to do no evil and approaches a lot of problems from an academic standpoint. It makes them money and it makes people's jobs easier. Good for them and good for us.
But $160 million in stock options? $1.68 billion in 2 years? Damn! Do you know how much rice and grain you could buy for starving people? How many middle class and working class people you could employ with that? The 8th highest paid executive in the world is the CEO of ExxonMobil and he made $88 million this year.
It's good that these stock options are tied to performance, because if Google tanked, they'd get nothing. But let's put the amount of money into perspective. Can we tone down on corporate greed? Did these guys really need that much in stock options?
I'm just saying...
"All great wisdom is contained in .signature files"
>
> But not income tax, which is what the parent mentioned. They probably pay the (much lower) long-term captial gains tax.
In Kalifornistan, all income - salary, interest, dividends, and both short-term and long-term capital gains - is taxed by the State as well as the Federal government. Every dollar earned over $40000 is taxed at 9.3%. (Every buck over $1M is taxed at 10.3% starting January 1, 2006.)
So if you have, say, a $400M capital gain on a $500M hunk of stock, the Feds take $60M (to build a quarter of a bridge to nowhere in Alaska, or to blow up some Arabs), and Ahnold takes an extra $37M in state taxes (for the pensions purchased by the various government employees union' under the previous administration in exchange for campaign donations.)
And since the AMT threshold is measured in thousands of dollars, no, you can't deduct the $37M in state taxes from your Federal return, because you're so far beyond the AMT threshold that your accountant can't even see the AMT threshold without very long baseline interferometry.
Ask yourself what the various levels of government have done to earn a quarter of the wealth spawned by Google.
This isn't a right-vs-left issue. Wouldn't most Democrats be a little happier if the government wasn't able to take a huge chunk of your wealth in order to buy bombs to drop on brown people? And wouldn't most Republicans be a little happier of the government didn't take the rest of your money to spend on government employees' unions and welfare queens?
Hi I work for the RIAA, and I don't understand what this is about? My brain explodes every time I read it, but we have a fresh supply of donor monkies.
So could anyone give me a quick synopsis of how this one-dollar pay thingie works. Add supported synopsis is OK.
If you don't know what AltaVista is (was), get off my lawn.
Don't be greedy. There are plenty of us out here that would be more than willing to give them twice what they're currently making a year....
Ask yourself what the various levels of government have done to earn a quarter of the wealth spawned by Google.
On top of all the standard responses (cops, roads, an army, etc), they built the Internet, without which Google couldn't exist.
I don't fault the Google guys for their compensation or their decision to try and defer some tax issues. Hell, I don't even fault them for turning their pseudo-salaries into a miniature news event. They're in the business of growing Google, and part of that is playing up the "Google mystique."
Yeah, they make a lot of money no matter how you count it. But you know what? So can you, if you come up with an idea that's good enough and get people to buy into it.
We should look upon home-run successes like Google for inspiration, not class jealousy.
"It was a summer's tale: Just a boy, his Linux, and a head full of dreams..."
I'd never want another dime if I had that much. Hell, I could give half of it away, live off the interest, and give away most of the interest, and still live happily ever after. The headline "Google Execs Happy with $1 Salaries" is a gigantic DUH considering how much loot they have already. Working in a job they love in what has to be a relaxed, comfortable atmosphere doesn't hurt either, I'd guess.
Article moderation: -1 Duh.
These guys started at the bottom of the pile, right? Just like the great majority of us, they were workers. Then they had a great idea, and now years later, they're billionaires because of it. It's the american dream. Why does everyone assume that just because they've made money they've turned to the dark side? 99% of you put in the same position wouldn't be turning down the billion dollars from stock sales. You'd have earned it fair and square, and you'd be very happy with yourself. I'm happy for them too, they've created probably -the- most useful tool on the internet, IMHO. Dave
Specialization is for insects. -Heinlein
What they've effectively done is told their employees: We care about the company
actually what I gather is they told the employees "we care about Wall Street" which can be quite different from caring about the company (lay off half of your workforce and outsource and the stock will go up, be conservative with your numbers and projected earnings and the stock will go down).
I personally wish the stock market just disappeared, but fat chance of that happening.
-- the cake is a lie
Me culpa.
Minor correction: A stock option is properly the option to buy or sell a given number of shares on a given date for a given price. See Wikipedia for a more thorough discussion, but in short what a stock option as a means of compensation entails is this: The company gives you an option to buy N shares for X dollars each on D date. If the stock price on the open market is greater than X dollars per share (call it Y), then you can exercise your option by spending N * X dollars to buy N shares of stock. Actually, you can do that even if Y < X, but that would be equivalent to buying a gallon of gas for $2.50 when it costs $1.50 across the street. Once you buy the N shares of stock, you can (as most people do) sell them back into the market for their going rate, Y dollars each. So your profit from fully exercising your stock option is N * (Y - X).
If you hear someone say their stock options are "under water," it means that Y < X and the options are worthless. Also, note that most stock options given as compensation for work are not freely transferable, whereas stock options purchased on the options market can be sold back into the market. That's most of what options traders do.
But the other people pointing out that this story is not about stock options but rather about actual stock shares are probably correct, at least as far as the company's founders go. They already own shares of stock and are just selling the shares off into the market for cash. Bill Gates and Steve Jobs both do this from time to time with their respective companies. How it works is you form a company, call it Acme. You incorporate it as Acme Inc. and, in the articles of incorporation, grant yourself 1 million shares of common stock. Then you later make an initial public offering and the Acme Inc. board authorizes the issue of 1 million more shares of common stock, which get sold through the stock market (probably covered by an underwriter or something initially and sold from there). So now you own 1 million shares and other people own 1 million shares. All you have to do to get rich is sell your shares out into the market.
that some CEOs get for getting fired that really pisses me off!
Enron. Enron. Enron. Ummm... Enron?
Does anybody here really believe that a CEO's perspective changes if they get a $1 salary versus a multi-million dollar salary when they have a ton of stock and options? Good CEO's will feel a vested interest in the company's performance, and bad CEO's will not. Awarding them scads of cash may keep them on board with your company, but that's all it buys you.
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Since Bush's tax cuts, Capital Gains tax on any stocks held over 1 year is a paltry 15%.
I make next to nothing, and I pay more income tax than that.
It's not what you know, or even who you know- It's how many people recognize your damn
According to yahoo finance:
http://finance.yahoo.com/q/pr?s=GOOG
Eric Schmidt gets $82,000 and Sergey Brin and Larry Page get $45,000.
No Sigs!
They are NOT stock options, these are stocks that the founders owned because they inested their life into the company when they founded it.
Suits will come, and suits will go.
Just make sure Guido is well compensated. The world really needs Python.
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
Wrong.
Nowadays, that depends on whether it's long-term capital gains tax or short-term capital gains tax. Long-term capital gains are usually taxed at a much lower rate.
No, stocks are not paper money. Stocks represent a "share" of ownership the companies assets (and a share of the company profits as dividends) - the assets could be something tangible, like machinary, or something intagible, like "marketshare" or "name recognition". People pay money for shares because they percieve they are getting something of value.
But even assuming the value of the stock is "inflated", this has absolutly nothing to do with monetary inflation. They use the same word, "inflated", but they are completly different things. It might be bad to "inflate" the value of stock (meaning, decieving people to the real value of what you are selling), in the same way it would be bad to sell cut glass as diamonds, but this is not what you are talking about.
The "inflation" you are talking about in your first post (cost of goods and services rising, most likely faster than wages) isn't the same thing as a stock being inflated (people thinking a company is more valuable than it really is). It is like saying that a "sweet" 72 Camero is going to raise my blood sugar! We use the word "inflation" to describe different things. "Inflation" simply means "bloated".
The things that cause monetary inflation as you mention it in your post: an increase in the money supply (or lowering of interest rates, which in the U.S. is the same as increasing the money supply), or a decrease in the goods and services in the market. Overpriced stocks don't increase or decrease the money supply at all, they simply reallocate money that is already in the economy. (And, if you are a Marxist: They are reallocating money away from one set of Capitalists to another set of Capitalists, so it wouldn't really have much effect on the workers from a strictly theoretical Marxist perspective).
If I was an employee of Google and my stock options were worth over a couple of million, I would dump and run.
This is precisely why you can only dream of having a couple million. The people you mention became rich because, among other things, they love what they do.
Capital gains tax rates are higher than income tax.
7 ,00.html):
And you're higher than a kite!
From the IRS (http://www.irs.gov/taxtopics/tc409.html):
"You may have to report capital gains and losses on Form 1040, Schedule D (PDF) . If you have a net capital gain, that gain may be taxed at a lower tax rate. The term "net capital gain" means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. The highest tax rate on a net capital gain is generally 15% (or 5%, if it would otherwise be taxed at 15% or less). There are 3 exceptions:
The taxable part of a gain from qualified small business stock is taxed at a maximum 28% rate.
Net capital gain from selling collectibles such as coins or art is taxed at a maximum 28% rate.
The part of any net capital gain from selling Section 1250 real property that is due to recapture of straight-line depreciation is taxed at a maximum 25% rate. "
The important part is that your long term capital gains are pegged based on your tax bracket. If you would normally pay more than 15% in taxes, your capital gains are 15%. If you would pay less, you pay only 5%. Short term capital gains are just figured as normal income and taxed as below.
And here are the tax schedules (http://www.irs.gov/formspubs/article/0,,id=13351
"If taxable income is over-- But not over-- The tax is:
$0 $7,300 10% of the amount over $0
$7,300 $29,700 $730 plus 15% of the amount over 7,300
$29,700 $71,950 $4,090.00 plus 25% of the amount over 29,700
$71,950 $150,150 $14,652.50 plus 28% of the amount over 71,950
$150,150 $326,450 $36,548.50 plus 33% of the amount over 150,150
$326,450 no limit $94,727.50 plus 35% of the amount over 326,450 "
So, if you earn $1 billion from the sale of stock held over one year, with only $1 dollar in actual income, you pay ($1 billion * 5%) $50 million (since the tax rate on $1 is 10%, which is less than 15%). If, however, you earned a $1 million salary, then cashed out $1 billion in stock, you'd pay ($1 billion * 15% = $150 million) + ($94,727.50 + (1 million - 326,450)*35% = $330,470) = $150,330,470.
By paying themselves $1 per year, they saved themselves over $100 million. Yeah, it was completely altruistic. Altruistic like a fox!
God invented whiskey so the Irish would not rule the world.
Do you honestly think these guys consider what they do as work? Do you think they have a morning commute ala Michael Bolton in Office Space? Hell no. When you've created and an empire such as google your job is probably more like a rousing game of risk. You're making decisions and setting the direction of a company where hundreds of employees and billions in stock hangs in the balance. Sounds like fun to me! No way i would quit.
It would not be surprising that they would quit in a few years, but right now working at Google would have to be one of the most interesting jobs in the world. And this is for an outsider, can you imagine if you'd created the company yourself?
Well, to sum it up... ;)
They only get the nominal 1$ as a yearly salary, and instead get paid in stock and stock options.
This means that they have strong faith in their company (if the stock crashes they'd lose alot of money compared to just having a ordinary 6-7 digit salary)
And regarding the sale of stock - its stock they already own, so they are taking nothing away from the company. Its like turning part of your coin or stamp collection back into cash. Well, its a tiny bit bigger than that but the principle is the same.
+++ MELON MELON MELON +++ Out of Cheese Error +++ redo from start +++
Much of Getty's fortune was tied up in the many buisnesses he owned. Ultimately he didn't know how much he was worth in dollar terms, nor did he care. Money is power of sorts and some people choose to use it to provide a service. Buisnesses don't just produce money you know.
http://www.amazon.com/gp/product/0515087378/qid=1
...Capital Gains tax on any stocks held over 1 year is a paltry 15%.
If you hang on to if for less than a year, you tack the amount to your income and pay that rate. Holding it for 12 months helps, as that 'income' gets taxed at a fixed rate rather than what you make at a normal income. But no worries on the tax front. Once you break a certain threshold where you get to play with the glorious ATM (alternative minimum tax) codes, which these guys certainly hit... No changes there at all...
+++ UGUCAUCGUAUUUCU
If I was an employee of Google and my stock options were worth over a couple of million, I would dump and run.
Perhaps, and as an EMPLOYEE of the company that might be something you would want to do. Keep in mind this article is concerning the execs. I don't know about Eric Schmidt, but Larry Page and Sergey Brin founded a company based on their Phd work. They don't have to worry about money, now they can continue with the research that they might have went on doing if they hadn't decided to start Google.
Kind of makes you wonder about what kind of people stick around when they are already super-rich. Bill Gates, Steve Ballmer, Steve Jobs, etc. Why do they continue to work? Is it because they have nothing better to do?
Ummm... it's called greed. There is never enough for some of these people. I wouldn't expect Larry or Sergey to quit yet, Google is still a young company. OTOH, I agree with you, what does Gates have to prove? Some guys do get rich and get out. Look at Paul Allen and Steve Wozniak. Allen is out buying sports teams and building toy rockets. Woz went into teaching. I think everyone has their reasons for doing what they do, but keep in mind not everyone who is successful is unsatisfied with their achievements.
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Except they sold the friggin stocks so they're billionaires, and what happens to Google now really won't affect them one way or another, except perhaps that the rest of their stock might not be worth $1B when they get around to selling it. It's generally Not a Good Thing when executives sell off lots of stock. See: Enron, Worldnet AT&T, et al.
True, except that most financial planners tell people to diversify their holdings. Now, if your whole fortune was tied to a single company's stock, wouldn't that be a bit risky? They've only sold a small chunk of their total holdings, so it's not an entirely bad thing from a shareholder standpoint.After all, you wouldn't want most of your 401(k) to consist of your company's stock, why should the Google founders do the same?
If there is one thing I've learned, it's that geeks make horrible investors.
... well, I'd still probably do it. :)
I've seen a number of posts on here complaining about the Google share price being outrageous. I'd be interested in hearing what they would have to say about Berkshire Hathaway (BRK.A) at an astonishing $89,600 per share. I suppose you think they are overrated too?
It's all in the market cap. While it might seem that might post is a thinly-veiled insult to the Slashdot crowd, I actually intend for it to be encouragement for most of you to go out and take a few stock market classes or read up on investopedia or wikipedia.
Here's your free lesson:
Market cap of Google is $130.94 billion. Market cap of Apple is $64.30 billion. Berkshire-Hathaway is $112.99 billion. IBM is $126.93 billion. Microsoft is a whopping $279.74 billion. Yahoo is $49.47 billion.
(Current as of EOD 1-24-06)
Based on this, a geek can deduce their interpretation of which company is "worth" more and thus determine which stocks to buy and which ones to "short". (For more on how to short a stock, use your favorite search engine or check with your brokerage)
Assets and Liabilities also play a huge part in valuation. A company can have a high market cap but have a crappy current ratio or debt to equity ratio. Personally I think Google is slightly overvalued, but here's the list that I have with actual market cap and where I think each of the above companies market caps *should* be.
TICK-ACTUAL-WORTH
GOOG-131-110
AAPL-64-80
BRKA-113-130
IBM-127-100
MSFT-279-230
YHOO-50-80
It's up to you how you determine what you currently value a company at, but I think valuing based off of market cap is a good way to get started. For example, Yahoo at one point had a paltry market cap of something like 7 billion after the dot-com crash of 2001-2002. Astute investors (like myself and others) invested in these companies that we suspected would rebound. Several of us make off very well because of it. And it didn't take much more than time for us to learn.
Of course, I gradually taught myself this over the course of about 6 months. I do not regret using the time between graduation and first official full-time job to do so. What a risky time to be playing with my money, though. If I had to do it over again
Oh, and I lost money too. But if you invest in safely and stay away from the lure of pink sheets stocks, you'll do fine.
"Ask yourself what the various levels of government have done to earn a quarter of the wealth spawned by Google."
Well I don't know how much of the following justifies the government taxation, but it certainly lists ways in which the government has assisted Google.
Firstly, Brin & Page were grad students at Stanford, recieving their undergraduate education from publicly funded Universities and reciving federal grant money to do the fundamental research that made Google what it is today. Part of their success revolves around being at the right place at the right time, but another part is that they had the opportunity to solve a problem first, and come up with the money strategy second, rather than the other way around. Because they a quality education and the government paid opportunity to study interesting problems, they were able to create an enourmous amount of weath, for themselves and for society. Hell, even Stanford operates on the charity of a former governor, rather than a series of well informed and rational choices made by students. And I think it's fair to say they still recieve a good sum of money in the form of federal research grants.
Second, Google exists to search the vast amount of information available over the Internet. For Internet Libertarians, the funding behind DARPAnet and even the development of HTML has to be a strange paradox. Certainly, there are plenty of governments under which the free dissemination, indexing and ranking of communications is not welcome. If I wished to be misleading, I might say that the Libertarian camp is divided over the issue -- there are as many Libertarian governments in favor of internet censorship as there are opposed!
Thirdly, Google the corporate entity benefits from a large number of local, state and federal services. The SEC provided them with a framework within which they could safely offer a number of shares for initial public offering, even in a unique way (despite complaints from many within the private sector), and gives shareholders confidence that the reports they read are accurate and should the need or desire arise, they can get a fair market price for their stock. The legal system provides Google with a fair and impartial jurisdiction within which suits by and against Google may be held (certainly Google gets its fair share of suits from those upset about being indexed--justified or not). Should the Googleplex burn down, the local fire department has been and will continue to be on watch for them. And for those Googlers that don't rollerskate to work, the State of California and the Federal government help to provide safe roads and highways with which to commute over. Should Google go bankrupt, the government provides a fair system of bankruptcy within which the company may survive, to the benefit of the majority of creditors.
Finally, the employees of Google don't have to worry about their status as Immigrants, Jews, Blacks, Men, or Communists interfering substantially with their business dealings. Should they be treated substandardly for these inherant traits (for example while finding a house in the SF market), the governments provide them with a recourse under the law for this irrational discrimination.
Now you're certainly welcome to claim that taxes are too high, that the government is accomplishing their goal too wastefully, or the like. But perhaps the State of California uses the high tax rates as an migratory throttle, to make sure that people planning to make money on a large scale do so outside their state? If California is still enjoying a growing economy and population, despite the high tax rate, perhaps enough people like the system to make it work?
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Open Source Sysadmin
We have similar debates over the funding of the National Health Service in the UK. The answer is that to allow the rich to opt out would undermine the whole point of any social security system, which is to protect the poorer members of society who *can't* afford a pension, health care, or to be unable to work for a period of time for whatever reason.
Social funds like SS and the NHS recognise that capitalism depends on inequities in the distribution of wealth as part of its basic mechanism and spread the cost of their funding across the whole of society, leveraging the wealth of those with more money to help out those who have less to help mitigate that.
The alternative is to suggest that all taxation should be hypothecated and that you have the right to withdraw your participation in those areas where you're not going to directly benefit from a particular levy. People who don't have children or who send their children to private schools would be allowed to opt out of paying for state education, etc. The logical outcome would be that you pay a fee to the fire brigade when they attend a fire at your house, or to the police to investigate a burglary there and pay nothing at other times.
Taxation is not a consumer service fee.
Do you happen to have a source for that? As I recall, the infrastructure of the Internet (land-lines, routers, servers, etc.) is almost entirely privately owned.
Possibly true now, but it's doubtful that it was built or would have been built without the government. Even as late as 2004, more than half the people on the Internet were connected over telephone services, whose infrastructure is heavily dependent on government support. I'd be pretty shocked if government funding (direct, or via the use of eminent domain power, rights-of-way under transportation infrastructure, tax easements, etc) wasn't a major factor in funding even modern Internet infrastructure. And, of course, there wouldn't have been an Internet as we know it without 20+ years of DARPA/ARPAnet research and buildout. Not to mention that things like top-level IP block allocation, DNS management, etc were all managed by IANA (a government body) when Google was being built, and Google most certainly relied on those services.
Of the "standard responses" you mentioned, only the army (or the military in general) is paid for by national taxes. Police, roads, fire protection, schools--almost everything else, in fact--is the state or county's responsibility.
Of course, the post the AC was replying to went out of it's way to bring state taxes into the equation. Indeed, the particular quote he/she was responding to was "Ask yourself what the various levels of government have done", it was not at all limited to just the federal government. States and counties are part of "the various levels of government" last I checked.
In any event, I'm certain that Google could probably have provided all of the services it desired for its own protection for far less than a quarter of its annual income, and probably does so anyway (most major companies seem to employ their own security forces, for example)
Are you serious? Building-security is a tiny fraction of what the police provide. And even there, the private security forces would be pretty toothless if there weren't public police forces roaming the land to keep criminals from building up small armies to raid places, making people know that if a crime is committed there will be tremendous investigative power brought to bear on them, and so forth. That aside, Google would certainly have trouble funding officers all over the country to deal with civil and criminal investigations, execute warrants, etc--and wouldn't have the authority to do so even if they could. And what would Google do with the criminals it caught? Execute them? Build private prisons? Surely in the absense of government the private sector could eventually replicate a lot of its services, but that infrastructure isn't there and Google is far from large enough to build it all out itself.
rage, rage against the dying of the light