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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.
The definition of investor has gone from "someone who places a portion of their wealth into a company in the belief that what the company is doing has inherent value and worth and will make money over time" to "someone who buys the privilege of gorging at a cannibalistic feast."
Check your premises.
I DO want a driverless car. I'd much rather spend my commute reading than driving. Unfortunately as a one income family I won't have the income to buy a driverless car even if/when they come out on the market.
Heck- my current ancient car doesn't even have door handles anymore. The satelite radio I installed works great though! :) - out of three of the speakers at least.
I like that google is maintaining a pioneering spirit. Yes, they could sit on cash cows instead- but instead they are innovating- not to make the world a better place because they only care about money- but things like driverless cars WILL make the world better, safer, and more googlicious.
"That's the way to do it" - Punch
You missed his sarcasm. For a long time, Bell Labs did a whole ton of shit that seemed to make absolutely no business sense -- a friend of mine is writing a book on just one employee's work there, which involved things that no modern man in a suit would approve. When they started paying attention to those guys in suits, their value and impact were tremendously diminished.
That said, my problem with Google's approach has nothing to do with whether they are or or not aimed towards making money, it's that Google tends to pull the plug on projects after spending lots of effort (and money) but before they've been seen through. Projects are started, some are brought to market, and most of those are killed quickly without a chance to be refined. Hell, sometimes slashdot runs an article on Google killing a project, and most of us are like "Oh, that sounded cool. I never knew it existed until now."
There's a very big difference... one that most people in our industry miss. Bell Labs could spend it's money on such things because it had a monopoly behind it... AT&T. As an aside, most of the open source culture tends to forget this part of history as well.
That nice stable cash-flow allowed it the freedom to spend on such things.
Then came the thought of monopoly was evil. Vertical integration is absolutely evil... or so they say. ATT was broken up. As soon as Bell Labs lost that monopoly association and became Lucent... it essentially died.
Both Google and Microsoft got a certain level of defacto monopoly... or at least to a level of very comfortable cashflow so they could be in the same position as ATT was back in the day. They can and so spend lavishly on R&D because they have a service to back their spending.
I'm not saying I'm for monopolies or such vertical integration. Well I am less averse to them than most people. Just saying that the 'good ole days' came with a price. The money and stability came from somewhere.
Just to put that in perspective, the entire DARPA research budget for 2011 was 3.28 billion. This is the organization that develops a lot of the "Gee whiz" technology oft discussed right here on Slashdot. For a single company to devote more money to R&D than DARPA is just mind-blowing.
DARPA has of course done amazing things in its history, and if Google can even approach the same magnitude of results it will change the technology world. Whether it can achieve something that impressive is an open question.
Interestingly, the current DARPA director, Regina Dugan, has announced she is leaving the Pentagon to work for Google. So perhaps I am not the only one to notice the parallels ... Dr. Dugan is one of a very small handful of people with experience managing multi-billion-dollar research budgets.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
Bell Labs (aka Lucent Technologies) did pure research, and it did fantasy project R&D both. I worked there I'd know. You can't have one without another. Pure research is worthless (to shareholders) unless someone is looking at it and thinking about how to use it, and fantasy projects are worthless unless someone is trying to productize them. The company went down the shitter as these things lost funding, to borrow a term from a former Lucent CEO, in favor of the "near and clear". To be fair to that CEO, the company was headed down the shitter long before that quote, but every year there was less money for R&D and more wasted in marketing and sales, to find and get customers to buy products that were increasingly obsolete.
Both pure academia and fantasy R&D made the company a lot of money, both in the 5-10 year scope and the 20+ year scope. That these inventions didn't make the gazillion dollars (defined as 10^wallstreet wet dream) they were worth was no one's fault but the suits who only knew they ran a telephone company. Bell Labs was at the heart of some of the most significant electrical engineering and information theory advances in the past century. That they ultimately blew up and went nowhere can only be blamed on the monkey the company had on its back, otherwise known as it's oddly unenlightened management. Where there was an intersection between developments and telephones, they got rich, where the technology wasn't immediately helpful, the resources were squandered.
Google is trying NOT to do that. They definitely good do a better job at taking some of their inventions and making them into a product, or licensing the technology out, but Google is basically printing money, it's good to see them putting it to a good use. Any investor not happy with how google uses its resources is free to sell their shares, and stfu.