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Ballmer Says Google's Growth Is 'Insane' 420

Posted by Zonk
from the doubling-the-doubled-growth-rate dept.
eldavojohn writes "Steve Ballmer spoke to the Seattle PI this week, commenting that Google's pace of employee growth is 'insane,' and the company has few successful businesses outside of Internet search and advertising. He referred to Google's non-search efforts as 'cute.' Google's current number of employees is nearly doubling each year. 'I don't really know that anybody's proven that a random collection of people doing their own thing actually creates value.' Mr. Ballmer went on complain that, in general, competition for good programmers has become an issue. Even 'hedge funds' are looking for skilled coders, making the HR fight between the two companies that much more challenging."
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Ballmer Says Google's Growth Is 'Insane'

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  • by Vengeance (46019) on Friday March 16, 2007 @10:41AM (#18374775)
    As I translate Steve's remarks:

    ROaaarrrr!!!! We are finding ourselves *hoot hoot* having to spend more money to hire quality programmers *scratch*. *Beats Chest* Google BAD!
    • Re: (Score:2, Insightful)

      by dreamchaser (49529)
      I read it more as, "Waaaaaaaaaaaaahhhhhh." I could even pictuer Ballmer putting his thumb into his mouth after his rant.
    • Re: (Score:2, Funny)

      by Anonymous Coward

      Google BAD!

      Beer GOOD!
    • by Anonymous Coward on Friday March 16, 2007 @10:51AM (#18374949)
      Google to MS: All your coders are belong to us!!
    • Insane (Score:5, Funny)

      by mwvdlee (775178) on Friday March 16, 2007 @10:53AM (#18374983) Homepage
      Well, if anybody knows "insane", it's Ballmer.
      • by JudgeFurious (455868) on Friday March 16, 2007 @02:09PM (#18378021)
        Balmer is, in my mind the perfect nutbar to be in charge of Microsoft at this point in time. While their foundation slowly erodes beneath them he sits up on top of the company and makes us laugh while still being easy to hate. He makes a fool out of himself with his stupid antics (chair tossing, monkey dancing, and ridiculous over the top hyperbole) and all the while he maintaines the "condescending asshole aura" that we've come to expect in Microsoft leadership.
      • Re:Insane (Score:5, Insightful)

        by walt-sjc (145127) on Friday March 16, 2007 @02:19PM (#18378153)
        True.

        Balmer: "I don't really know that anybody's proven that a random collection of people doing their own thing actually creates value."

        Microsoft's Arno Edlemann: "Usually Microsoft doesn't develop products, we buy products."

        It's pretty clear that MS doesn't really understand what "Innovation" really is, and how to do it. In the long term, this will bite them in the ass. Continuing their abusive and illegal behavior to maintain their de facto monopoly is their only hope of long-term survival, and they know it.
        • Re: (Score:3, Insightful)

          by mr_mischief (456295)
          Oddly enough, there's a name for a random collection of people doing their own self-interested thing that creates value. It's called capitalism. Ballmer doesn't understand this because in capitalism there's this thing called competition, and that's a dirty word in his little world.
    • by saboola (655522) on Friday March 16, 2007 @11:00AM (#18375137)
      BAAALMMMEEER.... MAAAAAAAD
      • Re: (Score:3, Funny)

        by rapidweather (567364)
        Tonight, I have decided to be on Ballmer's side, even though I am probably the only one here.
        Having said that, I would like a copy of Windows Vista, (any flavor), and a suitable PC to install it on. Preferably one that I can also run my livecd linux [geocities.com] on, just for comparison purposes, you understand.
        There, that was easy.
        Now for the good part, that Mr. Ballmer will surely appreciate:

        Every operating system has it's bad days, I have odd things happen to mine once in a while, probably related to some of the stran

        • Re: (Score:3, Funny)

          by Weedlekin (836313)
          "Tonight, I have decided to be on Ballmer's side, even though I am probably the only one here."

          You're not the only one here. I'm going to stick my neck out, and be on Billy G's side as well, because I could do with a few million extra dollars right now, and I happen to know that both of them have vast amounts of the stuff. OK, so a lot of it's tied up in stocks rather than laying around in the form of cash, but I'm not fussy or greedy, and would be more than happy to accept a few tens of thousands of MS sha
    • Meh... (Score:2, Insightful)

      by sgant (178166)
      He's just mad that they waited too long to try to just buy Google outright before they got big. Then he got even more upset when someone on his staff showed him the definition of "competition".
      • Re:Meh... (Score:4, Funny)

        by Yvanhoe (564877) on Friday March 16, 2007 @12:17PM (#18376289) Journal
        Another theory states that he is angry to be the only person on earth not having received a gmail invite...
        • Re: (Score:3, Funny)

          by hobbesx (259250)

          Another theory states that he is angry to be the only person on earth not having received a Gmail invite...

          And somewhere, off in the distance, a chair gives it's life as sballmer@microsoft.com receives 492 simultaneous Gmail invites.
  • by AKAImBatman (238306) * <akaimbatman.gmail@com> on Friday March 16, 2007 @10:41AM (#18374779) Homepage Journal

    AKAImBatman spoke to Slashdot this week, commenting that Microsoft's CEO is 'insane,' and the company has few successful businesses outside of Windows and Office. He referred to Balmer's stage antics as 'cute.' 'I don't really know that yelling "Developers" and doing your own thing on the stage creates value.' AKAImBatman went on complain that, in general, competition for good stage presenters has become an issue. Even companies like SCO are looking for skilled showmen, making the HR fight between the two companies that much more challenging.


    Ok, joking aside, am I the only one who finds Balmer's complaint a bit hypocritical? It's true that Microsoft has incredible sums of cash. However, Windows and Office are pretty much the only things making Microsoft that cash. Nearly every other portion of the company either contributes very little to the bottom line, or actually loses Microsoft money. I imagine that's part of the reason why Microsoft keeps bundling extra software services with Windows: At least it raises the value of the software package. (In theory, anyway.)

    That being said, I am going to (*gasp*) agree with him on one point. Having a bunch of programmers sitting around does not accomplish anything. They have to be in a full-on creative environment to do the truly impressive stuff. I think that the environment is slowly dissolving as Google loses it cohesion as a tight-knit company. They're growing incredibly fast, and I'm not sure they're really getting a good return on that growth. Obviously, only those inside the company can actually know that for sure, but it's not looking as good as it once did for those of us on the outside.
    • by greenguy (162630) <estebandido&gmail,com> on Friday March 16, 2007 @10:52AM (#18374959) Homepage Journal
      Normally, I'd agree. I think there's a lot to the philosophy of "do one thing, and do it very well." Google, however, does a lot of things... very well. Their maps and apps and whatever else are all clever, clean, and tasteful, not to mention highly effective. Ballmer calling them "cute" is an attempt to damn them with faint praise, which is to say, dismiss them. He can say what he likes, but Google will continue to chip away their market share.

      I do agree with you that their rate of growth is not sustainable, but I also suspect that as soon as it slows, people will immediately go "Google's hiring is down! Are they in trouble? Are they just not good enough to stand up to Microsoft after all?"
      • by lurker4hire (449306) on Friday March 16, 2007 @11:02AM (#18375165) Homepage
        Google does do only one thing, and they do it well! That one thing just happens to manifest itself in a myriad of ways, but they're still striving for a single, massive goal.

        From their about google page:

        l4h
        • by rockmuelle (575982) on Friday March 16, 2007 @11:45AM (#18375777)
          "Google does do only one thing, and they do it well!"

          Yes. And that one thing is sell advertisements. Just like magazines. Only instead of editorials, infographics, and stories, Google uses search and nifty Web and network enabled apps to attract eyeballs.

          Google's army of coders building "cute" apps are no different than a magazine's editorial staff and contirubuting writers writing targeted content that some demographic enjoys reading. Google's coders are just building content to bring viewers to the site.

          Now, Google may bring all the world's information together, but that's only because it happens to help sell advertisements. If people stopped becoming interested in information, Google would look for other ways to attract viewers. Like...er...buying YouTube...

          Google's business model an excellent model for developers. Using advertising to pay for developer's projects is really a holy grail for developers. You don't have to build the perfect product or meet external specs. You just need to build something cool and have fun doing it. And, you get to share it without of the traditional software strings attached. Very cool model.

          -Chris
          • by The Mayor (6048) on Friday March 16, 2007 @12:19PM (#18376353)
            Yep. You hit it right on the head. Google isn't a search/data organization company. They are an advertising company. All of their products are designed to do one thing: sell advertisements. In that business model, they have found a way to compete very aggresively with other software companies because most software companies rely upon sales of software for their income. With Google's business model, they care only about selling advertisements, so they can give their software away for free. What does that mean? Nobody can beat them on a cost basis. Other companies can produce higher quality (or more feature-rich, in MSFT's case) software, but nobody can beat them on cost. Over time, Google can continue to improve their apps until they approach the quality of traditional software. What this means is that Google can chip away, and eventually eclipse, other software manufacturers in terms of quality and features, but nobody can eclipse Google on cost.

            Another interesting thing about Google's model is that, compared to traditional Madison Street advertising companies, most of Google's revenues come from small to medium-sized businesses. They've levelled the playing field when it comes to buying advertising space, allowing a mom-and-pop shop to compete directly with a mega-conglomerate. What I find most interesting about this model is that I believe it to be fairly immune to business cycles. While large companies will expand and contract their advertising budgets based upon their bottom line, Google will receive relatively constant business from the mom-and-pop shops, whose advertising budget is both small and fairly constant regardless of recessions or expansions. We'll have to see how Google does through the next recession, since during the last recession they were still growing market share far faster than the economy was contracting. My bet is that Google becomes a safe haven for investors during recessions as a result.

            Finally, despite Google's phenomenally high P-E ratio, Google is currently fairly well valued, at least according to Free Cash Flow models. According to my research (and please don't take my word for it, do your own research--the results I found were startling to say the least), the FCF model was the only model that was significantly better than a random walk in predicting company valuations. Google has a high P-E ratio not because it is overvalued. They have a high P-E ratio because they have fantastic (and improving!) profit margins and revenue growth. Can it continue? Well, past performance is certainly no guarantee of future performance, but based on what I perceive to be a business model with a clear and sustainable competitive advantage, and a relatively non-existant connection to recession/exapnsion, I believe they will be able to sustain strong revenue growth and stable or improving profit margins for the next 3 years at the least. Plug in those assumptions to a FCF model, and you'll find that GOOG is fairly valued, if not undervalued.

            That's my 1.5 cents (inflation is a bitch).

            -dan
          • by DragonWriter (970822) on Friday March 16, 2007 @12:25PM (#18376427)

            Now, Google may bring all the world's information together, but that's only because it happens to help sell advertisements.


            The voting power in Google stock is very narrowly held, and deliberately so because the founders wanted to go public without giving effective control of the company to outside investors.

            With a company thats direction is narrowly controlled by a small group, you can't assume that everything is about financial profit as much as you can with a widely held company.

            One might just as well argue that Google sells ads, because that's the only way to bring in the money to bring the world's information together.

            Of course, the reality probably combines both: Google's leadership is probably interested both in profit and bringing information together, and has found a way to have the two reinforce each other.
          • Re: (Score:3, Interesting)

            by StarvingSE (875139)
            Now, Google may bring all the world's information together, but that's only because it happens to help sell advertisements.

            I don't quite agree with this statement. Google didn't start with "hey, we want to sell ads, how can we do this on the internet?" That's just boring... Google was started by two incredibly intelligent individuals who have an eye for the future and what services and apps work well on the web. Any company needs money to fund research, pay salaries that will attract the brightest min
      • by truthsearch (249536) on Friday March 16, 2007 @11:03AM (#18375197) Homepage Journal
        I think Ballmer calls those things cute because they mostly don't directly bring revenue. Microsoft has always believed that everything they do should directly bring in money. I think that's one reason their online documentation has always sucked. Since Google's main revenue stream is AdWords, anything tangential, even though it indirectly brings revenue by keeping people on site and raising brand recognition, is simply cute.

        Either Ballmer's an idiot or in denial. I'm feeling it's a little from column A and a little from column B.
        • by Knuckles (8964)
          Microsoft has always believed that everything they do should directly bring in money.

          But as we all know (and the OP in this thread already stated), only Windows and Office actually do that
        • Re: (Score:3, Funny)

          by _Sprocket_ (42527)

          Either Ballmer's an idiot or in denial. I'm feeling it's a little from column A and a little from column B.


          Or Steve is trying his own hand at inducing a Reality Distortion Field.
      • by malsdavis (542216) on Friday March 16, 2007 @11:21AM (#18375407)
        I think there is a fundamental difference though in that for over a decade now Microsoft has been able to convince people all around the world to part with hundreds of dollars, pounds, euros, yen and whatever else for their core products (Windows and Office), and many of their other products do also make a profit. Google has yet to launch a single application that can do this.

        They do make a fair amount of money through their ad system but they are yet to produce anything else which isn't running at a loss. Besides, most stock-market analysts will agree that unless Google can pull something out of their hat in the next few years, their valuation is simply insane.
      • by benzapp (464105) on Friday March 16, 2007 @11:24AM (#18375481)
        I don't know, I use the maps on local.live.com much more frequently than maps.google.com. They are also way better than google earth.

        I like gmail, but it's bee 3 years since I started using it and its still "beta". I'm a bit concerned google isn't very committed to their products.

        And let's face it - this isn't 1998. The google search model sucks these days, and only worked great for the first few years because no one was exploiting their pagerank methodology. I get the same crap on Microsoft's search engine I do on Google. It doesn't matter which one I use, and for the 90% of people who juse use IE's defaults, it doesn't matter to them either.

        Google has been riding on their successes from nearly a decade ago. I think google is in a much more difficult place than you imagine. If anything, their hiring fanatacism is a desperate attempt to find a diamond in the pile of coal. They are hoping that of the hundreds of turkeys they hire, one will think of something big, and they will be saved.

        I'd say if google doesn't come up with something real fast, like in the next 3-5 years - they will be finished.
    • They have to be in a full-on creative environment to do the truly impressive stuff. I think that the environment is slowly dissolving as Google loses it cohesion as a tight-knit company. They're growing incredibly fast, and I'm not sure they're really getting a good return on that growth. Obviously, only those inside the company can actually know that for sure, but it's not looking as good as it once did for those of us on the outside.

      I'm not sure I can agree with this. Google is exploding in a number of directions from internet based application services to radio advertising to mapping services to hardware offerings to IM. They basically have hit upon the concept that advertising can be used to make money off of anything popular, so they have set about finding or creating things people want. They're investing in R&D and headcount and while some may argue that they won't get significant return on that, I don't see any evidence of t

      • by _Sprocket_ (42527)

        They basically have hit upon the concept that advertising can be used to make money off of anything popular, so they have set about finding or creating things people want.

        One slight quibble. It's not just about popularity. Google is interested in aggregating information. What they're doing is figuring out forms of information people need / want and how to provide an interface to effectively access that information. Popularity is a welcomed byproduct. Although, on second thought, that might be discou

    • Oh, Balmer's complaint is hugely hypocritical. Google also has huge sums of cash from their stock. Google will eventually hit a wall if they don't come up with other big revenue streams. And I think that's why they hire so many smart people. Even if only one in a thousand comes up with a great idea it'll all pay off.
      • by daeg (828071) on Friday March 16, 2007 @11:06AM (#18375235)
        Investors have a lot riding on the fact that Google will eventually return more than just a very high stock price for them. While stock prices make money short term, the base of investing is long term returns. I have a feeling that, in a few years' time, if Google isn't returning anything, their stock could face a major drop.

        Something that is scary, though, is that Google has a very unique position in the marketplace. They know trends before they are public trends. With their stats program that is popular with startups, they can see new sites and new ideas before they get big. That is tremendous power, in both terms of capital (buying out early), and could be used for good of "evil" very easily. Imagine if they started selling that data to investment groups. "Based on search queries it looks like MSFT might face a major wave of backlash, you should short their stock." They are in position to even influence the global market through Google News and search results ranking.
      • by Billosaur (927319) * <wgrother@NosPAm.optonline.net> on Friday March 16, 2007 @11:25AM (#18375491) Journal

        Oh, Balmer's complaint is hugely hypocritical. Google also has huge sums of cash from their stock.

        Exactly. When was the last time Microsoft's stock was over $100, let alone $400? Ballmer's more envious than anything -- he keeps wondering why no one at Google is reading the résumés he keeps sending.

        Google will eventually hit a wall if they don't come up with other big revenue streams. And I think that's why they hire so many smart people. Even if only one in a thousand comes up with a great idea it'll all pay off.

        I don't think so. I think they're pushing the wall further and further, making things less profitable for their competitors. The extra ideas they come up with, good or not, aren't hedges against a collapse but part of a strategy to quietly worm their way into every part of the Internet. Face it: Google the search engine is near ubiquitous now. If they come up with other things (mobile phones, operating systems, etc.) that attain that kind of ubiquity, eventually they'll be able to charge for them and people won't give it a second though, since they will have become dependent on them.

        • by um... Lucas (13147) on Friday March 16, 2007 @12:12PM (#18376219) Homepage Journal
          When was the last time Microsoft's stock was over $100, let alone $400? Ballmer's more envious than anything -- he keeps wondering why no one at Google is reading the résumés he keeps sending.

          No offense, but don't start investing.

          A companies value is NOT reflected by the share price alone. It's the share price TIMES the number of outstanding shares.

          Quick math:

          Googles market cap is 137.43 billion; share price is 441.96; it has approximately 311 million shares circulating.

          Microsofts market cap is 267.23 billion; share price is 27.31; it has appromately 9.7 billion shares circulating.

          It's been argued that one of the main reasons that Google trades at such a high P/E ratio is because they've restricted the number of shares circulating... Like, if they split the stock to match the shares outstanding of other companies, there'd be so many shares circulating that the price would drop, not only just because there'd be more shares as a result of the splits, but because there would actually enough to fill the demand.

          Not trully related to the discussion, but related to your comment...
    • by russ1337 (938915)
      Exactly.

      I've often wondered why MSFT see Google as a threat, MSFT make office software and Operating systems. Google dont make OS's (well not yet) and sure Google have a web app that can read office docs, which is really more for convenience, so at least until recently the two companies have been after completely different things.

      MSFT is just a little scared because they are accustomed to being the only big boy on the block. Now there are two big boys, but different blocks. IMHO, MSFT should focus
      • by _Sprocket_ (42527) on Friday March 16, 2007 @11:34AM (#18375609)

        I've often wondered why MSFT see Google as a threat, MSFT make office software and Operating systems. Google dont make OS's (well not yet) and sure Google have a web app that can read office docs, which is really more for convenience, so at least until recently the two companies have been after completely different things.


        The problem for Microsoft is two-fold. Everything Microsoft does ties in to their core business. And that core business is under constant threat.

        Everything Microsoft does points back to their OS. And in turn, their OS is the platform on which they build everything they do. The concept of lock-in is not only about immediate profit, but it also ensures that they have a clear path ahead of them. Its easier to see and plan for the future if you control the present. Anything that does not feed the need for a Microsoft OS stack is a threat to this strategy.

        Why would Microsoft worry about losing control? Ask IBM what its like. Consider a time where IBM seized the microcomputer market - a time where "IBM PC" was a product reference and not a place-holder for a box produced by one of several thousand possible vendors with an unknown combination of commodity components. IBM is still a power-house in the Industry. But they no longer control it. It's hard to not only make money in a commodity market, but it's also hard to control one. And when you don't have that control, it is difficult to determine what directions such a market is going to take. What happened to hardware may very well come to pass for the OS as well.
    • Ok, joking aside, am I the only one who finds Balmer's complaint a bit hypocritical?

      Count me in.

      That being said, I am going to (*gasp*) agree with him on one point. Having a bunch of programmers sitting around does not accomplish anything. They have to be in a full-on creative environment to do the truly impressive stuff.

      That's assuming, of course, that the developers at Google are sitting around doing nothing, which I doubt is the case. It's widely publicised that they are given time to themselves to

    • AKAImBatman spoke to Slashdot this week, commenting that Microsoft's CEO is 'insane,' and the company has few successful businesses outside of Windows and Office. He referred to Balmer's stage antics as 'cute.' 'I don't really know that yelling "Developers" and doing your own thing on the stage creates value.' AKAImBatman went on complain that, in general, competition for good stage presenters has become an issue. Even companies like SCO are looking for skilled showmen, making the HR fight between the two c

    • by UnknowingFool (672806) on Friday March 16, 2007 @11:22AM (#18375425)

      Remember this is MS. Everything is reverse in MS world. i.e. They are innovating when they copy other companies. The Apple phone doesn't offer any new features. Linux is full of their IP. And it goes on and on.

      I imagine that's part of the reason why Microsoft keeps bundling extra software services with Windows: At least it raises the value of the software package. (In theory, anyway.)

      Well some of their divisions really do nothing for Windows. Like the Xbox. Its a huge money loser. It doesn't add to Windows or Office. Xbox is about taking the market from Sony and Nintendo. Period. When other companies lose $4 billion on a division or product over several years, the product gets cancelled or overhauled. What I mean by overhaul is in the strategy. MS did neither. It just followed the same strategy and upgraded the hardware and software specifications for the Xbox 360.

      Having a bunch of programmers sitting around does not accomplish anything.

      Yes but even if they are working, are they actually producing anything worthwhile? MS spends about $1 billion a quarter in R&D. Over the last five years, all they've managed to do is to produce an OS that in my opinion, a woeful copy of OS X. It's not that they don't have good people and that their people don't work. It's that the direction of the company is lacking.

      To me, Microsoft's problem is that their main goal it to compete with anyone who might threaten their monopoly. Their goal is not to make a good product but to beat everyone else. IE was only innovative up until Netscape lost. Then development stagnated until Firefox became a threat. MSN Search was just an ordinary search engine. Then Google showed up. MSN Search was overhauled to compete. Apple conquered the MP3 player market. MS now wants a piece of that market.

    • Re: (Score:3, Informative)

      Windows and Office are pretty much the only things making Microsoft that cash. Nearly every other portion of the company either contributes very little to the bottom line, or actually loses Microsoft money.

      Um...sorry, but that just isn't true. Exchange alone make the company $1.2-1.6B per year, and SQL server (again, alone) does even better. Neither of those two products is part of Windows or of Office, yet I think most companies would be extraordinarily happy with either income stream.

      The problem most Sl

  • by SpeedyGonz (771424) on Friday March 16, 2007 @10:42AM (#18374789)
    . . . the "monkeyboy" tag?
  • by GeckoX (259575) on Friday March 16, 2007 @10:43AM (#18374811)
    Steve, your showing off your true traits and motivations again.

    If you really felt this way, you'd sit back and wait for Google to implode, and then hire all the best ex-google-ites for well under what they're being paid now.

    But you're making such a fuss about it...whining really.

    Steve here's a hint for you, it's called competition. Look it up some time.
    • I'm no fan of monkey boy, and I've no doubt his comments come of spite, but even a stopped clock is right now and then.

      I would be astonished if Google can sustain their business model and rate of growth for much longer. Certainly their stock price looks ridiculous.
      • I would be astonished if Google can sustain their business model and rate of growth for much longer.

        Why? What's wrong with their business model, why would it fail? Their revenues are increasing, and search-related advertising is hardly going to disappear -- never mind their expansion into other types of advertising.

        As for rate of growth, define growth. You mean rate of employee growth? Sure, exponential growth is unsustainable. But with gross profits over 6 Bn on revenue over 10 Bn, I think they've g

        • Re:Jealous much? (Score:4, Insightful)

          by CodeBuster (516420) on Friday March 16, 2007 @12:27PM (#18376459)
          While I am no fan of Steve Ballmer I have to agree that he may be right or at least right enough that I would choose not to invest in Google, good company though it may be, at the current share prices, especially considering the relatively meager stream of advertising income compared to the massive inflow of investor monies.

          Why? What's wrong with their business model, why would it fail?

          Nothing, but there is such a thing as an overvalued share price and Google is the textbook example. There are other shares that are worth even more than Google, Berkshire Hathaway comes to mind, but those companies tend to generate a lot of actual real cash value each year. If one discounts the advertising revenue, which is by all accounts meager compared with the current share prices, then it becomes extremely difficult to estimate how much the remaining value, including intellectual property, human capital, and experience may eventually be worth. It is not *zero* to be sure, but exactly how much and when? The answer to that question determines how much you are willing to pay for a share and how much you ultimately earn in that investment depends upon how accurate your initial estimation was. In the meantime your $400+ dollars per share are NOT earning money doing something else. It is a substantial risk and one that not every investor is necessarily willing to take. On, the other hand, "there is a sucker born every minute," or so the saying goes.

          Their revenues are increasing, and search-related advertising is hardly going to disappear -- never mind their expansion into other types of advertising.

          Yes, but see above for why this does not necessarily a good investment make...

          As for rate of growth, define growth. You mean rate of employee growth? Sure, exponential growth is unsustainable. But with gross profits over 6 Bn on revenue over 10 Bn, I think they've got pockets deep enough to continue to hire freely -- never mind the cash reserves of 11 Bn.

          I think that he meant employee growth, but even employee growth must be justified in terms of additional value created for the business. It does not matter if the company has a bankroll of $10 x 10^4 or $10 x 10^7 dollars. If the business cannot earn at least $1 plus prime interest rate or 10 year treasury rate (4.45% currently) then that dollar should be returned to the shareholders in dividends after all of the expenses have been paid. Reinvestment is not always a good idea, it depends upon the current economic climate and the potential returns. The fact that Google has 11 Bn cash reserves is immaterial to this point.

          Think about it. If they pay $200,000 annually (incl benefits) for good employees, they can still hire 30,000 of those people while still turning a gross profit.

          The company is generating money based upon advertising revenue and EXPECTED future revenues in the form of inflow of investor money, but this does not necessarily mean that each employee is generating a gross profit by their direct efforts.

          Assuming, of course, that their revenues don't drop off, which would run counter to almost every analyst's predictions.

          If you are an investor in Google right now, especially if you didn't get in real early (and who but the insiders did?), you had better hope that not only does revenue NOT drop off, but that growth doesn't slow either because you are going to need some pretty powerful revenue growth to come out ahead at $400+ per share on P/E ratio of 40+.
  • Hedge funds (Score:5, Insightful)

    by mattbelcher (519012) <(moc.rehclebttam) (ta) (ttam)> on Friday March 16, 2007 @10:43AM (#18374819) Homepage
    It is true. I took a job with an automated trading firm over Google. Partly I wanted to work for a smaller company. Google's dream 20% time looked like a myth when I actually interviewed there (none of my interviewers used their time because they had too much work to do on their normal projects). Also, there's something satisfying about directly measuring the success of your software in dollars. If it makes money, you run it.
    • Re: (Score:2, Insightful)

      by Ruvim (889012)

      none of my interviewers used their time because they had too much work to do on their normal projects

      This would be a good reason for hiring more employees.

  • google's growth says Ballmer is insane?
  • by Vexorian (959249) on Friday March 16, 2007 @10:44AM (#18374833)
    Novell agrees that google's growth is insane.
  • Are you kidding me? (Score:3, Interesting)

    by phoenixwade (997892) on Friday March 16, 2007 @10:45AM (#18374841)
    The CEO of the largest software company in the world is Whining about some other Co's hiring rates?

    I wonder if this is more telling about a potential waning of MicroSoft than anything else. Or is it that Balmer is still trying to step out of a shadow... Gates has had a number of exceptional sound bytes over the years.... Positive ones. Balmer, not so much.

  • by 8127972 (73495) on Friday March 16, 2007 @10:46AM (#18374863)
    .... Jealousy
  • by Trekologer (86619) <.adb. .at. .trekologer.net.> on Friday March 16, 2007 @10:48AM (#18374893) Homepage
    This is coming from the guy who ran around a stage [google.com] screaming and flapping his arms about.
  • by Weaselmancer (533834) on Friday March 16, 2007 @10:49AM (#18374905)

    Throwing more resources at a problem isn't always the best way to solve it. For crying out loud, if anyone should know that it's Ballmer.

    A business I worked at several years ago did the same thing. Grew too fast and outpaced the market. Wound up running out of cash and having to lay off all those new hires. One guy was an employee for two weeks. I helped interview the guy, too.

  • by LibertineR (591918) on Friday March 16, 2007 @10:50AM (#18374917)
    Ballmer is completely correct.

    Disclaimer: I worked for Microsoft

    Google's approach to growth right now resembles something like a gold rush, assuming that they know where the gold really is. I dont think they do exactly, but are hedging their bets on a number of ideas. The search engine makes money, but Google knows that they will need to do more, and I hope the phone rumors are true, but even so, just gathering a lot of great programmers together under one unbrella does not guarantee innovation.

    I think Microsoft proved that good programmers dont necessarily make great programs. Every one of Google's businesses are cases of doing someone else's idea better. Cant wait to see what is coming, but for the moment, I cant see the fault in Ballmer's logic.

    • by Vengeance (46019) on Friday March 16, 2007 @11:06AM (#18375229)
      So it's about doing someone else's ideas, but better?

      To me, that sounds a *hell* of a lot better than doing someone else's ideas, but poorly, but having enough money and tenacity to wait out your failing competition.

      Maybe that's just me, though.
    • Google's approach to growth right now resembles something like a gold rush, assuming that they know where the gold really is.

      People made a lot of money in the gold rush. Google is not hiring any warm body they can find. They have been pretty selective and have the highest PhD count in the industry.

      I dont think they do exactly, but are hedging their bets on a number of ideas. he search engine makes money, but Google knows that they will need to do more...

      I think you're missing the point. Google makes money from advertising primarily. Advertising from their search engine needs to expand. So they move into IM, mapping, video, online applications, etc. etc. in order to expand their advertising base. These aren't random as some people seem to think, but all ways to leverage Google's ex

      • Um, no... (Score:3, Interesting)

        by everphilski (877346)
        People made a lot of money in the gold rush.

        Very few people did. And hardly any of the gold-diggers did. Do you know who really made out? The guys selling shovels/picks and food to the guys digging for gold. They made out and became rich.

    • by HomerJ (11142) on Friday March 16, 2007 @11:10AM (#18375269)
      That's what "innovation" is. Taking someone else's idea, improving on it and making it useful. Coming up with your own ideas is called invention.
    • by truthsearch (249536) on Friday March 16, 2007 @11:10AM (#18375279) Homepage Journal
      From Wikipedia:

      Microsoft Corporation is a multinational computer technology corporation with global annual revenue of US$44.28 billion and 76,000 employees in 102 countries.

      Google Inc. had 10,674 full-time employees as of December 31, 2006, Revenue $10.604 Billion USD (2006)

      Which company looks more bloated?
    • by qwijibo (101731) on Friday March 16, 2007 @11:11AM (#18375287)
      All large organizations work that way. There is no way to have a cohesive vision for so many people. No one really knows where the gold is either. Anyone who has one good cash cow can spend a lot of time and money trying to find the next one. Having 99 out of 100 projects completely fail is perfectly acceptable if the 1 that works makes enough money to cover all of the failures. Small companies try to find the next big thing, but need a high success rate or they go out of business. Large companies are no better at finding the next big thing, but they are better at sticking through the multitudes of failures that it takes to get something right that pays off to make it worthwhile.

      Businesses don't need to be innovative. They just need to keep money coming in. It doesn't really matter if you try to do one thing well or if you exploit your market position to get away with doing something barely good enough. In either situation, you get the money and that's all the business cares about. Doing something better than your competetor is good enough to bring the money in.
  • by MythoBeast (54294) on Friday March 16, 2007 @10:50AM (#18374923) Homepage Journal
    Um, why is this news? "Insane" is hardly a quantifiable value. So Balmer doesn't understand Google's business plan. Maybe Google is just building a brain trust while looking for the next big thing. Balmer is also doing a pretty good job at mischaracterizing Google's effort by calling it "a bunch of programmers doing their own thing", as if they're working completely without direction. I repeat, why are Balmer's completely uninformative ravings about Google news?
  • rebuttal (Score:5, Insightful)

    by psbrogna (611644) on Friday March 16, 2007 @10:50AM (#18374935)
    'I don't really know that anybody's proven that a random collection of people doing their own thing actually creates value."


    It doesn't sound like Mr. Balmer's been paying that close attention to the FOSS phenomenon. As far as I can tell a random bunch of people doing their own thing for the last 10-20 yrs have achieved just as much as traditional software business models, in some case more and in more profound & lasting ways.

    • by drinkypoo (153816)

      As far as I can tell a random bunch of people doing their own thing for the last 10-20 yrs have achieved just as much as traditional software business models, in some case more and in more profound & lasting ways.

      I think it's pretty clear that Free Software has achieved more in less time than proprietary software. The upstarts are becoming the leaders, or are at least working on overtaking the entrenched commercial solutions, in basically every category. OpenOffice.org honestly isn't the equal of (for

  • by OglinTatas (710589) on Friday March 16, 2007 @10:51AM (#18374941)
    First, Microsoft can treat its employees better if they are having trouble attracting the caliber of employees google hires. Or they can continue as they are doing now, and petition Congress for more H1-B visas. But if they do that, then it really is more about getting good programmers cheaply rather than attracting the highest caliber programmers at any cost.

    Second, if Mr. Balmer is correct, and Google doesn't have a sound or sustainable business, then it really doesn't matter; in a few years Google will implode, and Microsoft can sweep up all the Google alumni it wants.
  • by tylersoze (789256) on Friday March 16, 2007 @10:52AM (#18374965)
    Developers! Developers! Developers!
  • by pubjames (468013) on Friday March 16, 2007 @10:54AM (#18374999)

    I remember Bill Gates once saying that his worst fear for Microsoft was to become the next IBM - in other words, a big slow moving business with many levels of bureaucracy (this was some years ago and he was talking about the "old" IBM).

    Well, it looks like Bills worst nightmare has come true, as evidenced by Ballmers comments. Google is now what Microsoft used to be - a lot of small teams working on their own projects without levels of bureaucracy interfering.
  • Straw Men (Score:5, Insightful)

    by jazman_777 (44742) on Friday March 16, 2007 @10:55AM (#18375015) Homepage
    'I don't really know that anybody's proven that a random collection of people doing their own thing actually creates value.'


    Google is not a random collection. You don't need to prove anything. Ballmer is not the authority on the matter. They are not all doing their own thing.

    This is a CEO?

  • google 2015 (Score:3, Funny)

    by mastershake_phd (1050150) on Friday March 16, 2007 @10:56AM (#18375035) Homepage
    Wait till google gets into the operating system business, then youll hear some whining.
  • by inode_buddha (576844) on Friday March 16, 2007 @10:58AM (#18375093) Journal
    "A bunch of people doing their own thing", as you put it, is how the FOSS movement was started and largely continues. Your (Microsoft's) SEC filings indicate that you view FOSS as your major competitive threat. So, how insane is it?
  • As much as I loath the garbageware generated by Ballmer's 70,000 minions (today is "fun with MS Word" day), he is correct that high growth is extremely hard to sustain.

    If a company doubles in size every year, it means that half the employees have less than a year's experience before they need to hire the next layer of people. With so many fresh faces, its extremely hard to create a cohesive culture. And if you look at the labor it takes to find good employees (not just smart ones, but good ones), then you
  • by brsmith4 (567390) <brsmith4@gmCOLAail.com minus caffeine> on Friday March 16, 2007 @11:03AM (#18375187)
    I don't really know that anybody's proven that a random collection of people doing their own thing actually creates value.

    If a million monkeys randomly typing away on a million typewriters will eventually write Shakespear, I imagine that thousands of PhD's, post-grads, and other well-educated monkeys engaged in semi-random but structured projects, working on high-powered workstations will be able to deliver as well.

    There's even a proof!

    The Infinite Monkey Theorem [wikipedia.org]

  • Time will tell. (Score:2, Interesting)

    by goodmike (65197)
    Ballmer's dismissal of Google's depth is interesting coming on the heels of the Slashdot post a couple of items down about a potential Google mobile phone. Is that 'cute'? Or could such a phone actually realize the kinds of service convergence people have been wishing for almost as long as flying cars? And probably be half the cost of the iPhone.

    The question of the 20% time is very interesting. One of the innovations Enron touted was how its employees were free to work on whatever projects they wanted. Then
    • Re:Time will tell. (Score:4, Interesting)

      by spaceyhackerlady (462530) on Friday March 16, 2007 @12:18PM (#18376317)

      The question of the 20% time is very interesting. One of the innovations Enron touted was how its employees were free to work on whatever projects they wanted. Then it turned out Enron really was only good at trading energy, and not good enough at that. On the other hand, Google is delivering. Things like the phone will determine how deep they get. I think skeptical optimism is the stance to take.

      The reality is that anybody worth hiring is going to be curious about things, will have their own interests, and will have their own research projects on the side. The only decision an employer must make is whether such projects will be on the employee's own time and expense, or is it something the employer can support (i.e. related, even if only tangentially, to the business). It may, after all, turn out to be the Next Big Thing and make the employer a buttload of money.

      To paraphrase a line from JAG, anybody who wants to mess around with things that badly should be messing around for us.

      ...laura who messes with Linux and GPS on company time, but who pays for her own telescopes

  • Amid the rising use by business customers of Microsoft software on micro computers, IBM has put out a press release concerning the upstart firm. Sources at IBM are quoted as saying that the growth of Microsoft was 'Insane" and any notion that the firm had a bright future was "ridiculous". The source was further quoted as saying "the only reason MS can sell products so cheap, is that the development costs are low due to the fact that they steal computer time worth millions of dollars from the US taxpayer.
  • by filesiteguy (695431) <kai@perfectreign.com> on Friday March 16, 2007 @11:10AM (#18375273) Homepage
    Does anyone actually care what Steve says?
  • "...the company has few successful businesses outside of Internet search and advertising."

    Microsoft, 1980, one successful business, compilers and programming languages.

    Microsoft, 1990, one successful product, operating systems. Their language business has become part of the support for their OS business.

    Microsoft, 2000, finally have a really *solid* operating system for the first time since they dumped Xenix, and a handful of secondary businesses leveraged off their OS business.

    It took Microsoft over 20 years to get to the point where they were more than a one-product company, and they're really not good at all where they can't use their position in the OS market to give people a magician's choice of products.

    If google has a few successful businesses outside of Internet Search they're doing better than Ballmer did over the same period in the company's life cycle.
  • by DrDitto (962751) on Friday March 16, 2007 @11:42AM (#18375739)
    Well I'm a PhD student in Computer Engineering at a highly ranked university. I don't claim to be "smart". However I work hard, I can hold my own when it comes to coding, and I have professional software engineering experience before I started grad. school.

    Google contacted me for an interview (I never applied). My phone interview with Google grilled me on undergraduate algorithms like graph traversal. Thats pretty much it. Now my undergraduate degree is actually Electrical Engineering, but my graduate research has been mostly software development. I'll admit I didn't remember details on many algorithms (never actually took an algorithms class), but I'm sure I could code up Diikstra's Algorithm once I read it over from a textbook.

    Needless to say I was quickly rejected from Google. Why they contacted me for an interview and then tested me on things I have little background on, I have no idea. The interviewer even admitted to me that he actually doesn't use any of this stuff in his day-to-day job.

    Thus I'm skeptical when these companies claim that they can't find people. They may have a hard time finding people that fit the exact cookie cutter they are looking for.
    • Re: (Score:3, Interesting)

      by naoursla (99850)
      Last I heard, Google puts their applicants in front of an N body committee. If an one of the members of the committee rejects the applicant then they do not hire him. They are much more worried about false positives than they are of false negatives. They get so many applications that they can afford to do this. At some point their candidates become nearly indistinguishable and the hiring result random. You shouldn't take it personally (although if some of those false negatives do take it personally and make
  • by nanosquid (1074949) on Friday March 16, 2007 @11:52AM (#18375899)
    Face it, the only two products that Microsoft really has are MS Windows and MS Office; all other Microsoft efforts are merely "cute".

    I suppose the difference to Google is that Windows and Office are under siege and rapidly becoming obsolete.
  • by rblancarte (213492) on Friday March 16, 2007 @12:01PM (#18376029) Homepage
    Seriously. Ballmer didn't speak with the Seattle Post Intelligence (which is what PI stands for in case you wanted to know), he spoke at Stanford to students. All of the comments made were during that speech. So in a rush to get a /. submission, this person very quickly filled in the blanks when they saw the headline.

    As far as Ballmer, I don't know if he is the man to run MS anywhere, but into the ground. Ok, maybe that is a bit of a reach, but he does seems to act and speak more on emotion than on logical reasoning. This all strikes me as him speaking up on Google because they are one of the first companies to actually give them a run for their money out in the market. Not being the only top dog, he is lashing out now (and before many times).

    IMHO, Ballmer should in some ways welcome this challenge. If MS is up to it, and there is no reason they shouldn't be, then they can use this as a way to truly innovate and improve their products, in ways that are really helpful for the consumer.

    RonB
  • Interesting issue (Score:4, Insightful)

    by blamanj (253811) on Friday March 16, 2007 @12:14PM (#18376251)
    If you ignore the messenger and his obvious attempts to spin Google as "out of control," you still must admit that managing rapid growth is a tricky problem. Other companies (e.g., SGI) have not handled it well. Transmitting knowledge about the company and its products is harder when the people expected to do that have only been there a few months themselves.
  • by hey! (33014) on Friday March 16, 2007 @12:32PM (#18376549) Homepage Journal
    Taking money from your cash cow and throwing it at activities for their strategic importance rather than their immediate financial value is just insa... Ummm. Hold on.

    Never mind.
  • by geekoid (135745) <dadinportlandNO@SPAMyahoo.com> on Friday March 16, 2007 @12:39PM (#18376665) Homepage Journal
    or begininging 20th century industrilist cmoplaining that the workers actually have some say in the market.

    "'I don't really know that anybody's proven that a random collection of people doing their own thing actually creates value.'"

    well, Edison did that to some degree, and his people produced a boat load of stuff.
  • by istartedi (132515) on Friday March 16, 2007 @01:06PM (#18377151) Journal

    A bunch of people doing their own thing? This is very much like a free market. At Google, it sounds like they're harnessing the power of the free market, and giving it just enough direction to satisfy management goals.

    A bunch of people working through multiple levels of management to achieve management goals? This is very much like a centrally planned economy with a beurocracy. It's proven to be less efficient than the other system. Yes, you still need some management at a software company. The political analogy, like all analogies, breaks down at some point. MS is, however, much more of a centrally planned beurocracy than Google.

    Reading about the way MS is run reminds me of the airlines before deregulation. The United States had many features of a centrally planned, socialist economy (and still does), but we never admit that because if we did, the CIA would have to overthrow the government (heheh... digress). At any rate, if I were Balmer, I'd consider airline deregulation as a way to transform and re-invigorate MS. Start by firing half your PMs and flattening the hierarchy a bit. At the very least, there should be less degrees of separation between you and your most distant employee than there are between that same employee and the President of the USA. The average is 6, right? I've heard that at MS, you have something like 11 degrees of separation! And it's not even a planet, it's just one company. Classic sign of a company hog-tied by management, procedure, beurocracy, inflexibility, etc. It's no wonder Google and a bunch of loosely affiliated coders (Linux community) are both out-coding MS.

  • Touche incoming (Score:3, Insightful)

    by I Like Pudding (323363) on Friday March 16, 2007 @01:19PM (#18377303)

    I don't really know that anybody's proven that a random collection of people doing their own thing actually creates value.

    So much for the free market, then
  • by metoc (224422) on Friday March 16, 2007 @02:36PM (#18378373)
    Once upon a time Bill Gates commented that hiring the best developers did two things for M$.
    1) M$ had the best.
    2) Everyone else didn't.

    Personally I suspect that all of this development at Google means that M$ can't just pick one idea and counter it. There are hundreds and they don't know which ones are real threats.

    Is this part of Google's strategy - decoy projects? Confuse the competition until they deploy their killer app?

    Or maybe it's the idea that if you have hundereds (thousands?) of Google employee's with post-grad degrees spending ~400 hours a year (1000 employees -> 400,000 hours -> 200 man years), one will eventually deliver a M$ crushing killer app?

    Me thinks Balmer just wants someone to tell him what to compete against. Paranoid yet Steve?
  • by mary_will_grow (466638) on Friday March 16, 2007 @02:37PM (#18378383)
    I don't really know that anybody's proven that a random collection of people doing their own thing actually creates value.

    Hmmm. A random collection of people doing their own thing has saved me from ever having to run your ugly, bloated operating system!

  • by xtal (49134) on Friday March 16, 2007 @04:45PM (#18380213)
    Means not working for YOU, Steve.

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