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Google 'Wasting' $16 Billion On Projects Headed Nowhere
hapworth writes "Google's engineering culture is 'wasting profits,' according to a new report published today that refers to $16 billion worth of Google projects that are going nowhere. According to the analysis, it's not that the ideas — such as the Kansas City Fiber Project, driverless cars, and other engineering efforts — are bad. Rather, it's Google's poor execution that is killing the company and adding billions of dollars worth of projects to its 'trash pile.'" On the obvious other hand, Google's done a lot of interesting things over the years that they've managed to make work well, and that strayed from their initial single-text-field search bar.
I have not failed. I've just found 10,000 ways that won't work.
-Thomas Edison
Jesus saves and takes half damage.
...TFA, that is. I can't believe I just wasted five minutes of my life looking for something of value in it.
As far as I can tell, TFA thinks that Google should only spend money on things that have a guaranteed short-term return. Because, I suppose, we don't have nearly enough companies already doing exactly that.
If a company is willing to step up and fund this kind of blue-sky research, I'm more than happy to use their products, let them suck on my personal information, and even go long on their stock. In fact, the moment I see announcements from Google saying "yeah, blue-sky research is a bad idea" will be the moment I sell it all.
Agreed, this is R&D - it is what companies should be doing!
Looking for some examples of waste? Let us consider the billions that are now being spent in the patent wars, what have become so expensive that they must be seriously undermining companies R&D budgets.
Steve Jobs famously said that he would spend every dollar that Apple has in the bank - now $100 billion - to destroy Android because Google had the temerity to compete with Apple in mobile.
Though I'm not literally expecting them to spend $100 billion on this, Apple has shown that there is almost no limit to what they will spend in trying to destroy Android via patents. Case in point, a month ago it was widely reported that Apple spent $100 million in legal fees just on its U.S. lawsuit against HTC. Remember? The lawsuit that succeeded in blocking HTC from using click-to-email in the U.S. So now HTC will remove that functionality for devices sold in the U.S.
And now people are complaining that Google spends too much on R&D. Well, don't worry. Much of that is already being diverted to legal fees and patent acquisition.
The relevent quote: "We generated 96% of our revenues in 2011 from our advertisers."
Also you can find this statistic in any of their SEC quarterly filings. This number is of course down from 99% a few years ago, but with the addition of thousands of projects in the same time period I don't think any are earning large returns.
When I saw this conclusion, I looked up the background of the authors:
Mary Jander: BA, English and Business
Kim Davis: PhD, Philosophy
Nicole Ferraro: B.A. / M.A., Media Studies and Creative Writing
Clearly this bunch is qualified to tell the founders of the worlds fastest ever growing company which technology is not going to pan out 30 years from now. To their credit I was expecting to find the resumees of 3 MBA's. At least these guys are not soulless, merely clueless (about tech anyway)
Run with the lemmings, and you'll get your feet wet.
I think it may be more of a case of: "These people are doing something new, and it scares us, with our conservative, slow progress, get money now priorities!"
Nah, the way I read the article is not that they are faulting Google for trying things out. They are faulting the execution of things, pulling the plug before shit even becomes realized. In R&D (even commercial ones), it makes no sense to spend hundreds of millions, billions, on stuff that gets killed prematurely. To dole that kind of money, people need to look beyond two-quarter time lapses. And if they can't (or aren't willing to), then they shouldn't dole that kind of moolah.
The corollary of this is that if you are going big on R&D, you need to look at it long term, you need to abandon the idea that you'll reap the dividends within a year or two.
Just waiting for a shareholder initiative to kill the 20% developer personal research time off.
Last week, I just happened to pay a personal visit to some Google employees in Moutain View who are friends of mine. The 20% is already gone.
Put my fist through my alarm clock with its ding-dong death inside my ear. - The Blackjacks.
No, Microsoft has the same issue really. Microsoft Research does really cool, impresive things that rarely get translated into new products. They do a lot of really neat stuff with Operating systems and programing languages.
Well.. maybe. Or Maybe not. But Definitely not sort of.
Absolutely. They do really fundamental stuff actually. Including things like topological quantum computing. Not going to yield a product this decade or next, but at the cutting edge of the interface between physics and mathematics.
(http://stationq.ucsb.edu/research.html)
And then at the end:
Yeah, they did say back at the beginning of the project that they were going to provide fiber to the home. Why is it a twist this the project ended up being about fiber to the home?