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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.
What do they mean! Is google really being "killed"? I wonder where that money could be better spent, maybe on raises for the execs!
I fail to see how projects that are not yet complete can be considered 'going nowhere' -- especially ones such as driverless cars which was only recently announced.
You fund 1,000 projects, in the hope that 1 of them will return more then the other 999 consume. What Google is doing, is what most US companies are failing to do to get ahead of the rest of the world.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
but investor capitalism is the ultimate creator of innovation! it can't possible stifle it!?
... into an innovative company, and then don't want them to innovate. They want their nice safe already-innovated to profit like a not-quite-so-safe innovator. Paradoxical, yes - but seems the norm.
Just waiting for a shareholder initiative to kill the 20% developer personal research time off. To soon be followed by demands of a new CEO that will outsource and reduce staff to improve sagging profits.
Check your premises.
In my eyes, at least, projects are ways to find something that works.
Finding that something doesn't work doesn't equate to wasted money/time.
I believe Edison said something similar about how many times his lightbulb failed.
What do I know, I'm just an idiot, right?
Did you know that farmers don't grow just wheat? They actually grow chaff! I'm not kidding, they grow chaff literally around the wheat! Billions of dollars are wasted every year as stupid farmers grow chaff and then waste time separating it from the wheat to discard it. And they don't even burn it for fuel, they often return it back to the soil or feed it to their cattle for roughage and silage! What a waste! Sitting from my high and mighty armchair computer throne, it would save them billions of dollars to listen to me.
My work here is dung.
If they never fail, they probably aren't trying as hard as they should. If Google just sticks to funding proven projects inside search and advertising, somebody is going to eat their lunch.
It isn't like Bell Labs or Xerox PARC are the major sources of cutting edge software ideas anymore.
Creating, maybe sustaining jobs and a few more patents to their war chest? Sounds like a good investment for me. Of course, I don't have that kind of money, but they do!
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They wanted to get the best people. How else can they do that? They can pay more of course or give these people who are well paid, time to do other projects. Why would you leave to work else where? Every Friday is build your own stuff day! So long as there is a bit of cross over between work and play, the $16 Billion is not going to waste. ROI on staff being happy not an option anymore :(?
"Robots. Elevators to outer space. A nationwide fiberoptic network. ... Is it all worth it?"
You need to waste a lot of money and time to generate exceptional results. If you only do low-risk things, then sure -- you can grow you pile of dough now, but then another start-up google will come at some stage and pull the rug under your low-risk business.
Besides, "is it worth it?" kind of question is meaningless for a geek. It is interesting, ergo it is worth it.
While interviewing for an internship with Google, one engineer I spoke to described what Google does from his perspective: Google once discovered a hose that money poured out of. Its name is online advertising. Now, they spend their time searching for either the next hose, or new ways to increase the flow rate of that first one.
Now, whether this is the Chrome browser, Google+, Google Docs, self driving cars, whatever- they have no idea if any of them will be worthwhile. But, they have some of the smartest people in the world tinkering around to try to find out. And if they spend $16 Billion to find a hose worth $100 Billion, or more, then they come out ahead. But, that's the thing about exploration- you don't know what you're going to find.
So many times I see here folks say, "Just start a business!" when someone complains about job prospects. If it were that easy, then everyone would start a business and be rich.
It's hard coming up with something that's marketable and implementing it.
And also, it is quite interesting that Google has hardly any R&D projects that are web related, isn't it? That tells me that they also think the internet (and any business associated with it) is already a mature industry and saturated.
I'm sick to death of this prevailing attitude that the only value something has is its monetary worth. Just because something isn't profitable, it isn't worth doing. Fuck that. These asstunnels need to get a sense of fucking perspective.
If the net profit in investing in a lot of projects where some are hit is positive, then they are winning. What if the clasical roulette paid 100 times the original bet, between 37-38 alternatives? what if paid 1000 times? You bet in all the alternatives and get for sure profits.
...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.
There is another place where massive amounts of money changes hands, devaluation happens and absolutely no additional products are produced.
The Wold Stock market,
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.
How does this compare to the amount that other large, successful companies spend on research?
Because guess what: long term gambles with no immediate payoff - that's basically corporate research.
What percent of Google's operating costs is spent on these projects, versus say, the amount spent on Microsoft Research or HP Labs?
(We all agree that having a corporate research division is good, right?)
"If you don't fall down, you're not really trying."
I once sat with a colleague who was dissing Apple because "Steve Jobs has made so many mistakes." He was partially right...Apple had tried lots of things that didn't quite work. But wow, talk about not seeing the forest for the trees...this was less than 6 months ago, and Apple computer is absolutely rocking. So what if they made mistakes? That's how they had successes as well. I would find it hard to imagine that nothing was learned from the Newton that didn't go into the iPhone and iPad...and nothing needs to be said about what incredible successes THOSE two devices are.
This sounds like the exact same thing. Google has been so successful that people are fearful of the privacy implications...and, right on cue, Google not only kicks off a benevolent, altruistic redesign of their privacy policy but does everything they can to get people to READ it for once. By doing that, they are working to shift the culture from a world where people expect privacy but do nothing to secure it for themselves to setting a standard for everyone else and trying to get people to start measuring others by it. It's a subtle but incredibly important thing to do for a company whose business model revolves around the collection, analsysis and presentation of information to and from others, and if they succeed it will have a major impact on competitors like Facebook, Yahoo, Microsoft (yes, Microsoft, who are throwing money at Bing like the second coming was around the corner) and others, to Google's advantage.
And if the investors think for a second, they will realize that nearly all of Google's revenue now comes from things which could have failed, which were just ideas that an engineer came up with in their alloted 20% time for innovation.
For your security, this post has been encrypted with ROT-13, twice.
Uh, because they know that ads cannot be the income source forever? They need to find the next big thing and be there first or someone else will eventually beat them at their own game and then they'll go poof.
Yet another problem with being driven by quarterly profits instead of long term viability.
Basically. This is why they kept majority control of their shares, and why Facebook and every other new tech IPO is doing the same. Investors hate it and bitch about it to the SEC and others, but fuck you Mr Investor, you destroyed the goddamned economy.
Larry asked Steve's advice about returning as CEO. Steve basically said "keep it simple".
... when they were building out their third party platform and transaction risk management programs.
Bezos pretty much told the inverters to pound sand, and as a result, Amazon is THE platform, not just THE store.
The companies that invest in actually building things, and not just in short term profit are the ones that win again and agin.
Yet the investors just want to make a buck today; the trading houses just want their short term microtrading algorithms to work without having to actually know anything about what is of true value and worth. If they continue to get their way, the US will be finished as a technological innovator.
Check your premises.
This article really makes me mad !!!!!!!!! "But robot-driven cars aren’t even legal anywhere but (where else?) Nevada." WTF is this point!!!! Look lady when they made 1st TV there were no TV shows, dumb asses right.
Yeah, 'cause we all know that a driverless car is a pie-in-the-sky idea with no market whatsoever. It's not like any state legislatures are going to change the rules of the road to allow the infernal things, or anything-- they'll never fly.
P.S. And there will be no related technologies derived from the cars whatsoever, for instance, no self-controlling hummingbird-sized Ahmajinedad-search-and-destroy drones. Never.
... Google does seem to have a hard time getting some of their useful projects to be used.
However, that's not to say it's wasted. I'm just saying that some of their projects could have been nice if they'd introduced it earlier, better, differently, or something (for example ... Google+. I actually like it. Some nifty things, like the video chat. But... too little, too late. :(
They have gotten too big. They could stand to lose a few pounds, I mean money.
It used to be that way, get with the times.
Investing used to be risky. You risked a bit of your money on the chance of getting a ton of revenue out of it. High risk, high gain. Nothing wrong with that, if your risk is high, your profit margin should be high as well, so people actually dare to risk something and push us further on the pursuit of better technology and new, exciting inventions.
That's no longer the case. Investing today means putting your money into an innovative company whose creator already took all the risk and managed to come out on top. Mostly because they had a new and clever idea and dared to follow it. You pretty much offer them the choice between taking your money or watching you use that money to build a competitor instead. Either's fine by you, and either will allow you to come out on top, but pumping money in their existing venture needs less effort from your side.
Then you simply milk them dry, throw them away and move on to the next guys that had a nifty idea, risked it and succeeded.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
> At press time, Google had not responded to Internet Evolution's request for comment on this report.
Wise decision. One should avoid talking to idiots.
I do not believe in karma. "Funny"=-6. Do good and forbid evil. Yours, Oft-Offtopic Flamebaiting Troll.
This is exactly what any innovative company should be doing, especially a company that has the money to spend. You should do development and research on many promising ideas, of course not all of them are going to work, but that is to be expected. This is not wasted money, whenever you can employee people and pay them for work it is not wasted money.
Well, to be fair, I would consider "not being annihilated by our enemies" to be "instant profit", just not the money kind.
I think the example you are looking for is the American space program in the 60s and 70s. Yes, there was a geopolitical angle to the space race, but it was also largely an exercise in pure research for its own sake. I mean, really, reaching the moon was a laudable goal in terms of exploration and science, but it was not something that was expected to yield short term profits, nor did it. But the resulting technological gains were immense.
You are in a maze of twisty little passages, all alike.
They're one syllable words. He did all he could for you. You have to do the rest of the comprehension yourself.
-- Two men say they're Jesus. One of them must be wrong. - Dire Straits
"By its own admission, Google's approach to R&D is to run up a product or service and see who salutes. Forget intensive market studies, demand analytics, or any of the other techniques used by square, establishment corporations prior to investing in development. No, Google apparently sees itself as an exception to rules that govern ordinary organizations."
Given that Google is the 19th most profitable company in the USA, that speaks volumes about the "other techniques used by square, establishment corporations".
Thank God some people at Google can see further than next week, or at least seem to have learnt from Xerox PARC, Bell Labs, and so many other research departments' experience.
Look around at Google's investment relations pages, read their mission statement, review their bylaws. Seriously, if you're not going to do your due diligence before investing in a company you can't blame anyone but yourself. Their information explicitly says they have no plans to pay dividends. They explicitly say they take risks and maintain a long term focus. They explicitly say they believe building value for the users it he way to build value for the shareholders. They don't say they are out to maximize profit, or short term shareholder value.
The article nailed it. Clearly Google has strayed off the well tread path that is currently leading America into profit. Let me explain... First, Google needs to stop paying competitively and treat their workforce like crap, forcing it to unionize. Want to program for more than exactly 8 hours a day? Sorry can't, union contract says you can't work overtime, even if the project is late. You need that hard drive replaced in your computer? Sorry, you're an engineer, you don't hold membership in the IT HelpDesk union. That should succeed in bombing their profits enough to turn their labor force to "high quality" overseas workers in China, furthering unemployment and causing salary drop for Americans, while simultaneously training foreign workers to compete with American companies. Well anyway, they will soon discover that "high quality" chinese work is sort of an oxymoron, when the real problem was bureaucracy communication. So they need to hire a bunch of "contractors" in America to sort things out, because their normal Union labor force is too expensive. But alas, the contractors manage to deliver Google's on time, but off timber, and Google rolls it out to a spectacular ball of fail. But Google is "too big to fail" so Obama hands Google a nice "bail out" check to help them back to their feet... which was really distributed "by contract" to the executives, union labor force, and managers who delivered the project on time.
Shape up Google, you're doing it wrong!
There is nothing wrong with spending lots of research but it seems like Google likes to have lots of half-assed projects and but fails to find a way to take it to the next level.
Google should be able to treat its pet projects more like a venture capitalist would. Start up companies are held accountable by the investors even if they will remain unprofitable for years. When things get difficult, they have no choice put to persevere and do whatever it takes to fight for their idea and find a way to make it into a profitable business.
With the current Google model, when things get difficult, it seems easier for engineers to work on something more interesting .
If you take the time to read the article, you'll notice that they're actually asking whether these programs are mismanaged and doomed to fail as a result. Just look at their social networking endeavors, and tell me that you honestly think they weren't throwing out half baked solutions that had not real chance of succeeding in the market.
Given your sig, I'd be curious to know what you would do to prevent those who have the the money from looting those who have the ideas and drive and actually create tangible goods and services of value.
Check your premises.
Opinions like this are written from the perspective of a buyout company which is solely interested in maximizing share price.
Say you've got a company worth 10 million dollars. You have 1 million shares, each worth 10 dollars. Corporate raider comes in, strips out all "non-performing" assets like R&D, internal HR, IT, offshores programming, closes and consolidates stores. Voila! Now you've got a company (for a short period of time) that's worth 20 million since it has no drains on its "profit centers". Sell the company. Profit!
Private equity companies operate along similar lines. They'll buy a company take it private, "optimize" it, and resell it. As if they're any better business managers than the actual manager. In general, they're not. What they are good at is the leveraged buyout, field strip, and resell.
These types of activities result in healthy profits for the takeover artists, and jobs lost for the actual workers.
It's like harvesting the organs of a person while they're still alive in order to minimize the drains on ingested food. After you're done, they're going to be in very tough shape for any kind of long term existence. But by golly, food isn't being wasted on any of those useless organs.
Google is doing what companies used to do. They're going to become even more of a juggernaut.
This, on the other hand, is the way private equity execs dream of doing it.
Google doesn't make money from ads. They make money from selling user attention classified by user type. They have a resource of user attention to sell, because of their ability to do searches, provide mail services, and this they managed to do because of their algorithms in search and distributed computing. They manage to classify users with similar algorithms.
So, google converts algorithms and infrastructure to user attention, which they can then sell.
A friend of mine has a theory that Google just wants to make as much money as it can so that it can do some really geeky shit and hope that something is truly revolutionary. They'll just keep doing this until their empire collapses, no matter how far in the future that may be. Take the profitable projects' profits and throw them at something for the good of humanity, no matter if it's profitable.
Colin Dean Go a year without DRM
At one time the challenge was mechanical - mechanical gearshifts and brakes were just too hard to control. Since the first Prius, that is a solved problem. Now a car can easily be operated by an automated platform, the problem is to guide it safely.
Once that is solved, there are many new opportunities. Optimum guidance; optimum traffic patterning, looking for people who would like to share your journey all become objects of research.
If Google cracks driverless cars, it will change the developed world. It will affect town planning, investment patterns, and the way people live. And of course it will transform the car industry beyond recognition.
This is one area where Google could leverage its core technology to become so huge it could buy Apple to provide in-car entertainment.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
I think they just lack follow through in a lot of cases. Google Wave was an excellent project. It's my opinion that if you frequently use email in a work related environment and don't hate the entire idea of it, you are a special kind of person (like actually a robot). All Google needed to do was say "here's Wave, it's kind of like email, but it sucks way less for most of the use cases of email." Instead they completely oversold a perfectly awesome email/IM alternative with a bunch of jargon about collaborative word documents, which nobody ever seemed able to get to work at all, and custom apps/plugins when none of the first available of them either worked or were interesting, and general collaboration/maps/project management/documents/wiki type functionality that didn't work well from the start and were totally overkill for what would have been a simple and huge deal for most people with jobs: something that does what email does but doesn't suck. After all this they canned it before it ever had a chance to demonstrate these advanced features.
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 want to be able to work on the way while the car handles the driving, so please keep that project going.
We got totally ripped out of our flying cars so at least we could have self-driving cars.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Just like electricity you sometimes need common sense to ground a room full of geniuses. Unfortunately if geniuses are all you hire, you get some whacky results...
Driverless cars ARE search. When people search, they frequently want to find places. They find places by having maps as one of the things the search engine lets you search on. The driverless cars are a way to collect map data to feed into the search engine so that Google remains the most popular search engine. The same goes for Android. The OS is there to make sure that someone like Apple can't unilaterally cut Google's profits in half by switching all of their phones to an alternative search engine.
I would thoroughly approve if Apple spent $100 billion trying to destroy Android. The legal profession would spend a lot of the money on expensive consumer goods, so some of it would end up back in the economy instead of being part of a notional company value. Apple would demonstrate that it had run out of ideas and was not longer a fit custodian of all that money. If companies cannot work out what to do with piles of cash, they should find a way to get them to people who do know.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
I dunno, I like the Cave Johnson approach - "we're throwing science against the wall, and seeing what sticks." - applying rules of probability to innovation makes as much sense as a casino's business - lots of losers, and a few big winners, and the house always wins.
You do realise that driverless cars and renewable energy have almost unlimited potential upsides? This makes it very difficult to provide a standard ROI calculation, just as the "investors" failed to realise that the events to which they were assigning low probabilities (collapse of housing market, for instance) had potentially unlimited downsides, and so conventional risk assessment no longer worked.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
Palmer: Nothing, as long as your motive is the search for truth. Which is what the pursuit of science is.
While presumably Palmer was echoing a position that the author, Carl Sagan had, it's worth noting here that people do have motives other than the search for truth for why they pursue science. And there's no indication that these motives are in any way wrong. To the contrary, practical science has the powerful advantage of actually being useful to the people who are funding the research.
Speculators aren't a problem when investors make smart choices.
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.
Capitalism seems to have produced that effect.
With an interconnected driverless car system, people will get income from driverless taxis that will efficiently pick up and put down shared fares. Current buses are inefficient because they follow fixed routes and set off without knowing what the demand will be. If you only have, in effect, to share a quarter of a car, everything becomes much more affordable.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
But Bell Labs was never meant to be profitable.
Bell Labs was sort of a sop to the Federal Trade Commission and monopoly laws. AT&T could have it’s national phone monopoly, but it had to contribute to the betterment of society via basic research. Which Bell Labs did fabulously.
That being said – of all the examples you mentioned – how much profit did AT&T make from these? Mind you, they are all wonderful and I am glad that we, as a society have them. But it’s very hard for corporations to turn basic research into profits. Myself, I always think about Xerox Palo Alto Research Center and how they did the ground work for the modern computer but could not execute on it.
The question that I think the writer is asking is that Google is spending a lot money that belongs to investors on long term high risk speculative projects. And the line between high risk / high return projects and vanity projects to buff the founder’s image is fine.
Ever since I've seen and used Wave, dealing with e-mail discussion chains have been a major pain in the ass. Even more than they were before. 5 people working on a presentation/document? If it's got any degree of complexity, you'll end up with 4 versions in about 3 days. Add to it the random manager/executive poking his nose in and changing things on an old version that was forwarded as part of a progress report... Wave was an elegant and simple solution to that problem. Not to most other use cases of e-mails, and pretty much none of the use cases of IM. Sadly, they rolled it out too slowly (when you finally got in, nobody else had Wave, so you couldn't use it, and by the time other people got in, you didn't check it anymore) and as you say put far, far too much weight on plugins, apps and some other collaboration things that didn't work well/were too far & few between.
Beancounters would have whined the Spanish didn't steal *enough* gold from the New World (even though they stole so much, it devalued Au in Western Europe).
Knowing the cost of everything and the value of nothing fits comfortably into the school of craven greed that nearly created a global depression.
Those people are speculators, not investors.
Unfortunately the legal system and day-to-day economics do not make a distinction between the two. Mod points to you if I had them.
Except wave didn't go away. Wave merged into docs, which was all most people were using it for anyway. Instead of saying "hey everybody, let's use Google Wave!" we can just say "Let's use google docs", which was always an easier conversation anyway, and now is much nicer, thanks to wave.
If you're going to spread that old baloney about radar and cancer, at least have it based on something actually happening in the Real World. Most automotive radar systems use the 76-77 GHz band.
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?
Kudos to Google for spending money on R&D. It's too bad they need to keep it secret from short-sighted shareholders.
"When information is power, privacy is freedom" - Jah-Wren Ryel
On training the new guy when the old guy burns out. Ask your HR dept how much money is spent on employee churn, how much does it cost to look for a new employee, advertise, recruit how ever many names you have to interview just to get one person in the door.
Now name a program that costs about the same or less than that and keeps fully trained empoyees on the payroll.
Who's the guy who saw a gigantic aquatic insectoid and said "I'm gonna eat that!" The rest as they, is history.
But it's for the long-term health of their company.
There are too many business majors out there running things who don't seem to grasp the simple difference between long-term and short-term gains so they do things that piss off their customers for a short-term profit and end up paying for it later. And frankly, why wouldn't they? The whole reward/incentive scheme in business is completely set up to encourage this. You get a bonus for an idea that results in a profit, and the focus is always entirely on the next quarter--so why would you come up with an idea that's going to increase profits in 10 years when you may be working somewhere else. Hell, for that matter, why wouldn't you come up with an idea that is less profitable over 20 years but more profitable for the next 2 years? You get paid more if you do.
Google--I think, rightly--feels that it is strongly to their disadvantage to be a company that just does one thing, which is ultimately what they are. Companies that just do one thing tend to do fantastically well--until they die horrible, terrible deaths. Look at Blockbuster. Look at the print industry. Look at Circuit City and now Best Buy.
For Google, these current billions are pocket change. Sixteen billion dollars over the next ten year is just 1.6 billion a year. They can find that in their couch cushions--for now. But if they wait until their luck starts to change to figure out how to diversify, they may not be able to spare the cash to do it and they might end up going the way of buggy whip makers and everyone else who just did one thing. All of these things are gambles, but they're calculated gambles. It's ok if they have a 99% chance of going nowhere, if the payout for the ones that do go somewhere is way more than 100 times what you put into it--at least that's ok if you're a company like Google with obscene amounts of cash-on-hand and a desperate need to diversify.
Google is currently holding 43.3 Billion dollars in cash. They make 95% of their profits from search and ads because search and ads are insanely profitable. It's doubtful that any other Google project could bite into that percentage of revenue over the any near term timeframe.
And that $16B number is suspect.
$12.5B is the acquisition of Motorola. So being honest, the entirety of this guy's complaint about Google's "failed projects" is that Google shouldn't have bought Motorola. Which, by itself, can't be a failed project since it happened last August and Google's interest in Android is clear.
It breaks my pluginses, my precious!
I believe that comment was pure sarcasm that got modded insightful by people who don't know anything about when and what useful stuff came out of Bell Labs. Unix (MacOS anyone?) and C for example were organically grown, not part of some grand business plan. On the other hand, look at where they are now, years after they started focusing on things that could be "monetized". Oh right, they don't exist any more.
The key is not to squash the free thinking and various projects - that kills the innovation. The key is to look at all the projects and figure out which ones can be monetized and turn them into "more official" projects. The ones that aren't going anywhere are not to be hunted down and killed - they'll die on their own so long as people are free to switch to something else. Hindsight is 20/20, but innovation requires some randomness.
That's a big number. Sounds pretty serious, compared to $38bn in annual revenues.
Except that 3/4 of it is the $12.5bn purchase of Motorola Mobility, an operating business with products, sales, revenue, etc., not to mention a valuable IP portfolio and a big pending tax benefit. If there's one thing that purchase isn't, it's an "R&D Expense".
A total of $3.9bn in as-yet-unsuccessful multi-year R&D projects doesn't look so bad compared to Google' other numbers. What's that, $1-2bn/year? And some of those other projects aren't exactly R&D, like the $1.9bn investment in Atlantic Wind Connection, which is also clearly a business with a plan toward generating revenue. AWC may not succeed with that plan, but it's not R&D.
The Internet Evolution authors are intellectually dishonest frauds. They have mischaracterized their largest numbers in order to make a point that is not supported by evidence.
And, actually, the total of the projects the article lists is $16.9bn, not $16.4bn (making the non-Motorola total $4.4bn, not $3.9bn, which is still completely reasonable), so they apparently can't do simple arithmetic, either.
I've certainly been disappointed by some of Google's apparent mis-handling of R&D projects, and I'd like to believe that they are learning to do better over time, but even if they were having this rate of failed projects, it would be a pretty reasonable price to pay for a self-driving car. Imagine they get trivial revenue as a technology supplier / licensor (say $100/vehicle). In a world market of 50 million vehicles, that's $5bn/year. Not too shabby. And some of those other R&D projects might pan out, too.
I'm tired of google. They dont do anything new. They dont care at all about the desktop.
"someone who buys the privilege of gorging at a cannibalistic feast."
Actually, that's two different people entirely, investors have always employed raiders to ge on and salvage what's left of a failed company. Nothing's really changed except media perception.
Python: 'And then suddenly you have a language which says "we're all stuck with whatever the whiniest coder wants".'
There is a myth that companies have "fiduciary responsibility" to their shareholders. This is only true to the extent that the management should not steal the profits or do grossly irresponsible things to the company. As proof of my assertion, lets consider that some industries are inherently more profitable than others (commodities tend to have low returns). If "best possible returns" was the only goal then any CEO in one of the less profitable industries should sell all the assets and turn the "company" into a hedge fund investing in those industries that are more profitable.
A company should simply be required to state publicly what it does - it's up the individual investors to decide if they think that business is a good investment. If someone bought Google because the stock was going up like a rocket at some point and then sees all the "waste" and want to change something, they should just change their investment choice - not change the thing that they thought was a good investment.
really? you're telling me right now google is in the process of being killed. i don't quite understand, isn't google still making billions??
Apple makes more in a quarter than Google makes all year. And Google just spent two years' profits on Motorola Mobility for questionable patents (it might backfire and Google will have to pay to give Android away) to support an increasingly questionable business model (like a Starbucks competitor giving away coffee and trying to recoup the money by advertising on the cups).
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
> 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.
In all fairness, Steve Jobs wasn't scared of competition and didn't feel entitled to monopoly; he did, however, feel that Apple had invested quite a bit of skill and effort into making the first smartphone with broad consumer appeal and that Android/Samsung/etc. were brazenly copying it. He felt the same way about Windows copying Mac so that probably left a bit of a chip on his shoulder.
The fact is, though, that (a) intellectual property law doesn't offer much direct protection against the type of "copying" that was & is going on, (b) the ego and insular nature of Apple prevented Jobs from noticing that other people were working on the same problem and thus unsurprisingly rendered similar solutions over time, and (c) to the extent there is "copying"; frankly, Apple has also occasionally indulged in similar types of "copying".
My biggest beef with email isn't so much shared documents but shared email threads. Getting cc'd on a group email after 7 or 8 reply-all's have already taken place is pretty much like getting a kick in the junk from your coworkers. And it's just presentation. If each message in the thread cleanly identified the writer without all the auto signatures tacked on with phone numbers and fax numbers and to/from info heading every single message in the thread with a list of poorly formatted information etc. Add a passed around collaborative document to that and your whole morning is gone.
The model for investing you describe still exists. However, we now call such high risk/high reward innovation-oriented investing venture capital. It could be that the distinction you are trying to make is one of scale -- small scale investors cannot provide enough VC to get most good ideas off the ground, and as such are restricted to investing in larger, lower risk enterprises. On the other hand, it seems to me that the main change over the past fifty years on this front is the distribution of potential capital, in that many more people now invest in the stock market on a per capita basis. From that observation, I would contend that the narrowing of risk profiles is a natural consequence.
Fortunately, the actual return induced by this behavior reflects the reduced risk. See, e.g., bear.warrington.ufl.edu/ritter/PBFJ2005.pdf.
...is why we enjoy Google and their services so much. Because there is more to a good company then then their lump sum of cash (such as Apple now days). I believe after a certain point (of income proportional to the size of the company) it's no longer about reaping as large a profit as possible to add shovels full of gold to the pile, but rather about what you can give back to society and the world as a whole. In essence it's their duty morally and ethically to give back to the world as the world has given them a position in which they can undertake such monumental tasks. ...Of course this means nothing in modern terms in which capitalism has effectively given people an edict to abandon all moral and ethical obligation and dive headfirst into cut throat practice. In the end they become so fixated on one particular aspect that they forget everything else around them.
Noblesse Oblige as they say...
Well, while there are still idiots who buy a stripped down company for double the price, these kind of 'service' will still continue.
Unfortunately most MBAs don't know what makes the wheels turn, they would be happy to buy a car without an engine for double the price as well.
how long until
Are we talking about companies like Samsung, who invest for the long term projects that take years to pay off and earns higher then expected return?
Or, are we talking about companies like Samsung, who spend millions of dollars to open up a cup cake shop for the CEO’s daughter?
I expect the CEO, who earns millions, to go out every day and sweat for a living. I don’t want him sitting back, taking it easy, feathering his own nest with my money. Look up Dennis Kozlowski and Tyco. Look up Bill Ford Jr. and the slow slide of Ford under his leadership.
If I own 1 share it’s just as much my money as Google’s – from both a moral and legal standpoint. Page and Brin must spend that money in the interest of all shareholders. They can’t hire girlfriends to non-jobs, vacation on the corporate jet, or indulge in flights of fantasy. (I am making this point because a lot of CEOs run their company as their private piggy bank. Google has good corporate governance as far as I can tell. )
Am I greedy? Yes I am. I am long term, risk adjusted greedy. And if you aren’t you should not be in the stock market.
How much did AT&T save from inventing the transistor? Lots
How much did Texas Instrument profit from AT&T’s invention? Probably more.
Here the issue. Basic research tends to spill out all over the place. Bell labs invented a lot of cool stuff, but most of the benefit went to other companies. Other people ate Bell’s cake – and the only way to prevent this is draconian IP laws – which I am against.
Which brings us back to Google. If you have noticed, I have not said if Google’s research is a good deal or not – I am still thinking about it. It looks like they have a ton of money, no clear direction, so they are pitching ideas wildly and hoping for a home run. This tends to be a bad choice Honda’s robots and airplanes. NTT’s AI and chip research. 90% of Microsoft’s research. I could go on. The only good thing is that Google is stuff with a lot of bright people – so I am not going to bet against them. (besides, you never know – I hear a failed podcast company became Twitter.)
Google is about search technology and pattern recognition.
No. Google is about targeted advertising. Google search, mail, plus, Android, etc; mechanisms to gather data on you to support targeted advertising and to deliver those ads. You are google's product. Advertisers are google's customers, not you.
If Google cracks driverless cars, it will ...
... it will be so that Google can deliver the most appropriate targeted ad to the billboard you and other drivers are passing at a moment in time.
Private equity companies present a plan to their investors and banks on how they can improve a company, and if they sell that to them they can move ahead.
They then offer the existing company's shareholders more money than the company is worth on the market today. And if they can sell that to them they can move ahead.
They optimize a company like a programmer refactoring code.
The private equity company only makes a profit if they can prove to whoever buys it that they have actually improved the value of the company.
Often the choice is between a company going under (and losing all the jobs) and being rescued by private equity (and losing the jobs that are not providing value to the company).
Sometimes existing corporate executives try to hold on to their jobs rather than be taken over by the private equity that will improve the value of the company to the shareholders.
I get your sentiment. I was once just as guilty with respect to making such statements about MBAs. However one of the things that made business school so much fun was to see how ignorant and misinformed I had been. The failures and shortcomings you see amongst executives on the nightly news is not a result of their training, its a result of their personal shortcomings. Like the university educated programmer who writes bug ridden and unmaintainable code, these executives were taught the right way to do things but for whatever reason did things otherwise.
MBAs are add-on degrees, they are an overview of the entire "organization" from formation through growth and into maturity - executive/strategy, marketing, research and development, manufacturing/operations, accounting, human resources/management, legal, finance, entrepreneurship, etc. They are not like other master's degrees where you go deeper into a specific field and perhaps even deeper into a specific topic within that field.
An MBA supplements whatever previous topics you have studied or fields you have worked in. It helps you see how other departments look at things, makes you better equipped to see their perspective and to communicate with them in an effective way. Many MBAs have a technical background. I'd say about 1/3 of my class were card carrying geeks. One common failure of us geeks is a failure to communicate with non-geeks. Geeks with MBAs are quite useful with respect to furthering our opinions and suggestions throughout an organization; and also useful for organizing our own efforts within whatever teams we may work on. With respect to organizing and managing a team too many geeks try to reinvent the wheel so to speak rather than try to leverage the enormous body of knowledge that is out there on management and organization. The short story, psychology and group dynamics are far more important than you may realize.
The author of this "study" should apply the same lens to IBM.
This is an opinion piece on an IBM sponsored site; total crap. Go to the site and count the number of negative pieces on Google.
"There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy." Hamlet (I, v, 166-167)
I don't know if I want to live in a world where it's considered a "waste of money" (even for Google) to research and develop high-speed internet and fully autonomous vehicles... That is unless that world already has fully autonomous vehicles and ubiquitous, high-speed internet.
Engineering and bean counting. Never shall the two meet in friendliness.
There are some good projects on this list. Even things that will probably be profitable in a couple of years. I think our friend Mary Jander is just not getting understanding the situation Google's in. You have to remember that Google's core business, search advertising is slowly dying. Every quarter they make less money on it; and even though they are still among the largest advertisers on the internet, the search business has peaked, and they need to find new business models to get into.
Do you remember the hubub when Google bought Android? You know, that totally unprofitable mobile phone os? There were numerous commentators like Mary that just didn't get it. Some even questioned the sanity of Google's ability to make business decisions. And now, it's starting to look more like Google will be remembered for Android, it's role in the mobile revolution and the post PC era, than it will be for people going to google looking for Facebook.
Everyone always points to G+ as a sure fire loser for Google. But I don't think it is. Even in the relatively short time it's been in public beta, it's changed quite a bit. They've added some pretty compelling features to it like hangouts, and it's app friendly. Just because it's not a hit today, doesn't mean it won't be a hit tomorrow. Thankfully, Google is big enough and smart enough to be able to do what no other company on Wall Street does... think about the future.
My suggestion would be that ms Jadner do the same.
Not every project is going to directly translate to something immediately profitable, but I think the work itself can easily lead to the next generation of innovation 5 years down the road. If you just focus on what's happening today and scrap everything that doesn't return a profit in a few quarters, you'll be over the hill and outdated in no time. Like Kansas City, there's no other company in the world I'm aware of that's doing research on how people can use 1Gbps connection, but I imagine everyone agrees we'll reach a point where speeds like that are common place.
count RnD as waste because it doesn't provide immediate results, news at 11.
The Kruger Dunning explains most post on
I think at least half of the stuff we learn from science is completely useless, maybe even 90% (like Sturgeon's Rule).
The problem is we don't know which half is useless until several centuries have gone by so we need to investigate it all.
Some of the greatest innovations of all time came from projects considered to be waste of time and money. So I do not agree with the verb 'waste' in this article. /. article and rewrite it to remove the word 'wasted'... :-)
Maybe some day we will look back to this
Government spend 16 Billion on 'Project Nowhere'!
This sig is not paradoxical or ironic.
Easy. Create incentives that convince or even force investors to leave their money in an enterprise for a longer period and hence give them a vested incentive to ensure the company is productive, active, healthy, competitive and most of all successful in the long run. Right now it's more akin to a migration locust strategy. Crash in, harvest to the bone and fly off.
We need long term investments, not the daytrade culture that emerged. An easy way would be to use taxes, as evil as they're seen. But if you tax it heavily if someone pulls out of an investment quickly (say, 90% tax on your revenue if you pull out before a year is over) and drop it to zero after a longer time (20 years+), people have an interest in the company they invest in.
Yes, that means that investors will rather not invest into fads that will be over in 5 years, but they should NOT invest in that anyway, from an economy point of view. What our economy needs today is another sustainable business, something that will carry us into the next decade or century. Production moves to China. Most of the internet businesses are short lived fads. We need something like the microcontroller revolution of the 1970s, something that can drive our economy for decades to come. And I'm quite convinced investors can identify something like that, given the pressure to be forced to do it instead of going for the low hanging fruit of easy money.
I have faith in the market economy to fix everything, but we have to force it to work again instead of just going after the easy buck.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
the money is trickling down, this must be stopped!
Never say never. Ah!! I did it again!