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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.
"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.
...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.
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.
"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.
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.
... 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.
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.
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 .
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.
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."
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.
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.
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.
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.
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?