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Google 'Wasting' $16 Billion On Projects Headed Nowhere 408

Posted by timothy
from the preemptive-sour-grapes dept.
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.
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Google 'Wasting' $16 Billion On Projects Headed Nowhere

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  • killed? (Score:5, Insightful)

    by dittbub (2425592) on Tuesday March 13, 2012 @12:19PM (#39339757)
    What do they mean! Is google really being "killed"? I wonder where that money could be better spent, maybe on raises for the execs!
    • Re:killed? (Score:5, Insightful)

      by 0racle (667029) on Tuesday March 13, 2012 @12:23PM (#39339829)
      They mean money should not be spent on things that can not be instantly monetized. That's what was killing Bell Labs ; once they went the instant monetize project route it was all wine and roses.

      Google is at risk of not becoming another Bell Labs.
      • by dittbub (2425592)
        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??
        • Re:killed? (Score:5, Funny)

          by Opportunist (166417) on Tuesday March 13, 2012 @12:37PM (#39340057)

          But they could make (pinky to mouth) TRILLIONS!

        • Re:killed? (Score:5, Insightful)

          by Anthony Mouse (1927662) on Tuesday March 13, 2012 @12:43PM (#39340145)

          I hate to have to point out the cynicism, but the GP is not faulting Google with what they're doing.

          And I think the concluding sentence is better written that "Google is at risk of not becoming another Lucent Technologies," which is the mediocre company that Bell Labs turned into after it stopped doing first-class change-the-world fundamental research.

          The point is that asshats don't want another Bell Labs. Bell Labs wasn't about quarterly profits. They invented transistors, lasers, information theory and UNIX. None of that stuff was profitable within two quarters, was it? So obviously it was useless and they shouldn't have wasted the money developing any of it.

          Is the sarcasm clearer now?

          • Re: (Score:3, Interesting)

            by vijayiyer (728590)

            The difference is that Bell Labs did pure research. While Google may be doing pure research, it isn't evident based upon the projects that are publicly visible. Pure research is what yields the long term society–changing breakthroughs, whereas R&D on fantasy projects often have higher capital expenses with nothing to show for it even if the project succeeds.

            • Re:killed? (Score:5, Insightful)

              by fiannaFailMan (702447) on Tuesday March 13, 2012 @01:18PM (#39340643) Journal

              The difference is that Bell Labs did pure research. While Google may be doing pure research, it isn't evident based upon the projects that are publicly visible. Pure research is what yields the long term society–changing breakthroughs, whereas R&D on fantasy projects often have higher capital expenses with nothing to show for it even if the project succeeds.

              How do you differentiate between "pure research that yields long term society–changing breakthroughs" and "fantasy projects" before they've had a chance to prove themselves in the market for a decent length of time?

            • Re:killed? (Score:5, Insightful)

              by Anthony Mouse (1927662) on Tuesday March 13, 2012 @01:20PM (#39340661)

              While Google may be doing pure research, it isn't evident based upon the projects that are publicly visible.

              What makes you think it would have been for Bell Labs? I have some confidence that you don't get to UNIX (or a self-driving car) without a lot of fundamental research. The fact that they don't put the engineers in Central Park so you can watch them work isn't any excuse to conclude they don't exist.

              R&D on fantasy projects often have higher capital expenses with nothing to show for it even if the project succeeds.

              Like the space program, am I right? Those goons at NASA never invented anything useful, and not one penny was ever handed to Neil Armstrong by a single man in the moon. I mean who needs satellites and GPS, fuel cells, more efficient solar panels or any of that other crap.

            • Re:killed? (Score:5, Interesting)

              by Austerity Empowers (669817) on Tuesday March 13, 2012 @02:32PM (#39341695)

              Bell Labs (aka Lucent Technologies) did pure research, and it did fantasy project R&D both. I worked there I'd know. You can't have one without another. Pure research is worthless (to shareholders) unless someone is looking at it and thinking about how to use it, and fantasy projects are worthless unless someone is trying to productize them. The company went down the shitter as these things lost funding, to borrow a term from a former Lucent CEO, in favor of the "near and clear". To be fair to that CEO, the company was headed down the shitter long before that quote, but every year there was less money for R&D and more wasted in marketing and sales, to find and get customers to buy products that were increasingly obsolete.

              Both pure academia and fantasy R&D made the company a lot of money, both in the 5-10 year scope and the 20+ year scope. That these inventions didn't make the gazillion dollars (defined as 10^wallstreet wet dream) they were worth was no one's fault but the suits who only knew they ran a telephone company. Bell Labs was at the heart of some of the most significant electrical engineering and information theory advances in the past century. That they ultimately blew up and went nowhere can only be blamed on the monkey the company had on its back, otherwise known as it's oddly unenlightened management. Where there was an intersection between developments and telephones, they got rich, where the technology wasn't immediately helpful, the resources were squandered.

              Google is trying NOT to do that. They definitely good do a better job at taking some of their inventions and making them into a product, or licensing the technology out, but Google is basically printing money, it's good to see them putting it to a good use. Any investor not happy with how google uses its resources is free to sell their shares, and stfu.

              • by Tablizer (95088)

                only be blamed on the monkey the company had on its back, otherwise known as it's oddly unenlightened management.

                Perhaps there is an unrealistic expectation here. It's difficult to be very forward-thinking and be good at managing the nuts and bolts of everyday operations. Look at Charles Babbage: he was by far one of the more forward thinking individuals ever; for the idea of a general-purpose computer was completely foreign to the vast majority of academics he talked to (Ada Lovelace being the exception).

          • Re: (Score:3, Insightful)

            by cpu6502 (1960974)

            Exactly. Accountants never seems to understand that R&D is costly and often leads to dead-ends.

            But that's also how you discover innovations like Bell Labs used to do, and Google is doing now. The alternative is to count pennies & become like Microsoft. They just copied ideas from other companies like Atari, Commodore, Apple, Netscape/Mozilla, Google, Opera, rather than innovate new ideas.

            • Re:killed? (Score:5, Informative)

              by Bill, Shooter of Bul (629286) on Tuesday March 13, 2012 @01:39PM (#39340941) Journal

              No, Microsoft has the same issue really. Microsoft Research does really cool, impresive things that rarely get translated into new products. They do a lot of really neat stuff with Operating systems and programing languages.

              • Re:killed? (Score:5, Informative)

                by Certhas (2310124) on Tuesday March 13, 2012 @01:53PM (#39341105)

                Absolutely. They do really fundamental stuff actually. Including things like topological quantum computing. Not going to yield a product this decade or next, but at the cutting edge of the interface between physics and mathematics.

                (http://stationq.ucsb.edu/research.html)

              • They do a lot of really neat stuff with Operating systems and programing languages.

                They also do some interesting graphics-related research. Off the top of my head, I remember some work on procedural texture generation and progressive mesh simplification.

          • Re:killed? (Score:5, Interesting)

            by scamper_22 (1073470) on Tuesday March 13, 2012 @01:15PM (#39340591)

            There's a very big difference... one that most people in our industry miss. Bell Labs could spend it's money on such things because it had a monopoly behind it... AT&T. As an aside, most of the open source culture tends to forget this part of history as well.

            That nice stable cash-flow allowed it the freedom to spend on such things.

            Then came the thought of monopoly was evil. Vertical integration is absolutely evil... or so they say. ATT was broken up. As soon as Bell Labs lost that monopoly association and became Lucent... it essentially died.

            Both Google and Microsoft got a certain level of defacto monopoly... or at least to a level of very comfortable cashflow so they could be in the same position as ATT was back in the day. They can and so spend lavishly on R&D because they have a service to back their spending.

            I'm not saying I'm for monopolies or such vertical integration. Well I am less averse to them than most people. Just saying that the 'good ole days' came with a price. The money and stability came from somewhere.

            • by Marillion (33728)
              Being a monopoly certainly helped AT&T fund Bell Labs, but perhaps more importantly they didn't have short sighted mega-fund managers with 15% or more of their equity demanding that they stop "squandering the money that should be returned to the shareholders."
          • by alexander_686 (957440) on Tuesday March 13, 2012 @01:27PM (#39340777)

            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.

            • by Anthony Mouse (1927662) on Tuesday March 13, 2012 @02:08PM (#39341301)

              That being said – of all the examples you mentioned – how much profit did AT&T make from these?

              Can you see how having a closet full of transistor-based network switching equipment could be an advantage to them over an entire office building full of vacuum tubes? Or worse, human operators switching phone calls instead of a UNIX-based phone switch? Or how lasers (and thus fiber optics) may have been useful to them? Or information theory, i.e. data compression?

              So how much profit did AT&T make from them? How about all their profit? I am not aware of anything AT&T currently does that doesn't depend on every single one of those things. And certainly anything related to the original, AT&T-as-telecommunications-company role does.

              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.

              That money doesn't belong to investors. It belongs to Google. Google, in turn, belongs to investors -- but that isn't the same thing at all. You can't buy a hundred shares of Google and then walk into the bank and withdraw that proportion of the cash from Google's bank account, because it's not "your" money. The people the shareholders elect to run Google get to decide how that money is spent, and if you disagree with the holders of the majority of voting shares (i.e. Larry Page and Sergey Brin) how the company should be run, you're free to invest in something else.

            • by dwye (1127395)

              Bell Labs made pre-split AT&T lots of money, by raising the reported costs and thus allowing more money to be returned to shareholders as increased dividends rather than to customers as decreased rates (if the legal limit of profits was 5% of operating expenses, one million dollars to Bell Labs sheltered 20 million dollars of otherwise "excess" profits). They also made money by improving customer service and/or availability rates, since service failures were punished by major fines to whichever operati

        • Re:killed? (Score:5, Interesting)

          by Anonymous Coward on Tuesday March 13, 2012 @12:52PM (#39340271)

          You missed his sarcasm. For a long time, Bell Labs did a whole ton of shit that seemed to make absolutely no business sense -- a friend of mine is writing a book on just one employee's work there, which involved things that no modern man in a suit would approve. When they started paying attention to those guys in suits, their value and impact were tremendously diminished.
           
          That said, my problem with Google's approach has nothing to do with whether they are or or not aimed towards making money, it's that Google tends to pull the plug on projects after spending lots of effort (and money) but before they've been seen through. Projects are started, some are brought to market, and most of those are killed quickly without a chance to be refined. Hell, sometimes slashdot runs an article on Google killing a project, and most of us are like "Oh, that sounded cool. I never knew it existed until now."

      • Re: (Score:3, Insightful)

        by phrostie (121428)

        I have no interest in driver-less cars, but at least they have an R&D dept and are trying things.

        don't they also have their hands in solar power and wind farms?

        as for management killing a company, that isn't anything new.
        lots of prior art.

        • Re:killed? (Score:5, Insightful)

          by ByOhTek (1181381) on Tuesday March 13, 2012 @12:44PM (#39340151) Journal

          I think it may be more of a case of:
          "These people are doing something new, and it scares us, with our conservative, slow progress, get money now priorities!"

          • Re:killed? (Score:5, Informative)

            by luis_a_espinal (1810296) on Tuesday March 13, 2012 @01:16PM (#39340607) Homepage

            I think it may be more of a case of: "These people are doing something new, and it scares us, with our conservative, slow progress, get money now priorities!"

            Nah, the way I read the article is not that they are faulting Google for trying things out. They are faulting the execution of things, pulling the plug before shit even becomes realized. In R&D (even commercial ones), it makes no sense to spend hundreds of millions, billions, on stuff that gets killed prematurely. To dole that kind of money, people need to look beyond two-quarter time lapses. And if they can't (or aren't willing to), then they shouldn't dole that kind of moolah.

            The corollary of this is that if you are going big on R&D, you need to look at it long term, you need to abandon the idea that you'll reap the dividends within a year or two.

        • Re:killed? (Score:5, Interesting)

          by Oswald McWeany (2428506) on Tuesday March 13, 2012 @12:44PM (#39340161)

          I DO want a driverless car. I'd much rather spend my commute reading than driving. Unfortunately as a one income family I won't have the income to buy a driverless car even if/when they come out on the market.

          Heck- my current ancient car doesn't even have door handles anymore. The satelite radio I installed works great though! :) - out of three of the speakers at least.

          I like that google is maintaining a pioneering spirit. Yes, they could sit on cash cows instead- but instead they are innovating- not to make the world a better place because they only care about money- but things like driverless cars WILL make the world better, safer, and more googlicious.

          • Re: (Score:3, Interesting)

            by n0rm (261621)

            The radar in the driverless car would be an awesome safety feature to add to any car. I heard an interview on NPR where they said their car could see what people couldn't--- the radar picks up reflections off the pavement, and can "see through" the trucks they're following.

          • by gumpish (682245)

            I DO want a driverless car. I'd much rather spend my commute reading than driving.

            So there's this thing called "mass transit"...

        • by Kupfernigk (1190345) on Tuesday March 13, 2012 @01:05PM (#39340443)
          Google is about search technology and pattern recognition. In fact, that is the major challenge with driverless cars now.

          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.

          • by macwhiz (134202)

            Plus, there IS a direct link to Google's core businesses. Google pays people to drive cars around the world taking photographs for Street View, and collecting WiFi data for geolocation services. To keep that information up-to-date, they have to keep driving those cars around. If they can figure out how to automate those cars, they can reduce the cost of acquiring that data: no driver to pay, no human limits on the hours driven... Yes, the whole program will cost a lot, and it would take forever to recoup th

      • Background check (Score:5, Informative)

        by Kristian T. (3958) on Tuesday March 13, 2012 @01:06PM (#39340451)

        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)

        • by luis_a_espinal (1810296) on Tuesday March 13, 2012 @01:23PM (#39340705) Homepage

          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)

          You are engaging in ad-hominen attacks right there dude. Understand that some of the comments have merit. The thing is, Google pulls the plug on stuff prematurely. Unless we are all missing some in-depth Google wisdom, you can't do that with R&D prematurely, specially if throw millions and millions at it. Now, this is purely an armchair opinion that I'm posting here, I'm no Google insider. But things seems to be either half-cooked (Google+) or killed quickly after spending millions because it is not going fast enough within the next two quarters.

          As it has been mentioned by others here, it's not about blaming Google for doing R&D and trying things out. It's about execution and seeing things through to the end.

      • Re:killed? (Score:5, Insightful)

        by trout007 (975317) on Tuesday March 13, 2012 @02:17PM (#39341451)

        My Dad worked at Bell Labs Homdel, NJ. He knew exactly when it was over. They used to encourage home projects. You could take as many electrical components home from inventory as you wanted. The assumption was that while working on your projects you would learn. One day they put someone in charge of monitoring the components and he knew it was over since the bean counters were in charge.

    • Re:killed? (Score:5, Insightful)

      by Bigby (659157) on Tuesday March 13, 2012 @12:58PM (#39340329)

      I can't help but think an MBA made the conclusion that they are "wasting" profits.

      Google has been successful because they take risks. All MBAs want to do is minimize risk. For every 99 failed projects at Google, 1 makes up for that and reaps profits that make the 100 projects operate at a 50% profit margin as a whole.

  • by Anonymous Coward on Tuesday March 13, 2012 @12:19PM (#39339767)

    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.

    • by trainman (6872) on Tuesday March 13, 2012 @12:25PM (#39339849) Homepage

      Also how is this different from Xerox Parc, Bell Labs and IBM Research (or even Microsoft Research) where staff are given the freedom to innovate and experiment with technologies with no immediate marketability. Without such basic research, which corporate America has been languishing in their support of over the past decade or two, we wouldn't have the transistor, laser or so many other key pieces of our modern world.

      Google should be commended for being a good corporate citizen and giving back to science and society. Or as another commenter said, where should the money go, executive raises and dividends for shareholders?

      • by Anonymous Coward on Tuesday March 13, 2012 @12:43PM (#39340141)

        "Or as another commenter said, where should the money go, executive raises and dividends for shareholders?"

        Unfortunately, that is exactly what a lot of people on Wall Street want. They find a goose that lays golden eggs and then kill hoping to extract the golden eggs that are not laid yet. The future be damned!

  • by Kenja (541830) on Tuesday March 13, 2012 @12:20PM (#39339779)
    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.
    • by Missing.Matter (1845576) on Tuesday March 13, 2012 @12:36PM (#39340015)

      You fund 1,000 projects, in the hope that 1 of them will return more then the other 999 consume.

      Except is that really happening? Google is still a one hit wonder, with 96% of their revenue generated by search and advertising.

    • by Qwavel (733416) on Tuesday March 13, 2012 @12:41PM (#39340097)

      Agreed, this is R&D - it is what companies should be doing!

      Looking for some examples of waste? Let us consider the billions that are now being spent in the patent wars, what have become so expensive that they must be seriously undermining companies R&D budgets.

      Steve Jobs famously said that he would spend every dollar that Apple has in the bank - now $100 billion - to destroy Android because Google had the temerity to compete with Apple in mobile.

      Though I'm not literally expecting them to spend $100 billion on this, Apple has shown that there is almost no limit to what they will spend in trying to destroy Android via patents. Case in point, a month ago it was widely reported that Apple spent $100 million in legal fees just on its U.S. lawsuit against HTC. Remember? The lawsuit that succeeded in blocking HTC from using click-to-email in the U.S. So now HTC will remove that functionality for devices sold in the U.S.

      And now people are complaining that Google spends too much on R&D. Well, don't worry. Much of that is already being diverted to legal fees and patent acquisition.

      • 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.
      • > 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 abo

    • by Mr_Silver (213637)

      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.

      Whilst I agree with you, the problem that Google has is that some of their projects are so poorly defined and then poorly executed that it's patently obvious that they're going to be a disaster before they even launch.

      Google TV is one example. A device with a remote control with that many buttons and a non-exi

  • by forkfail (228161) on Tuesday March 13, 2012 @12:22PM (#39339813)

    ... 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.

    • by Nerdfest (867930)

      They should think about how that strategy would have worked with buggy whip manufacturers.

    • by Svartalf (2997)

      We need to quit calling them "shareholders" as the bunch you refer to are simply there to game the system and they're "sharesellers". A shareholder holds onto the purchase of shares for the purposes of dividends and long-term returns on their investments in question. Most "shareholders" hold on to the shares they buy for days or weeks and then sell it once they "turn a profit".

    • by compro01 (777531) on Tuesday March 13, 2012 @12:47PM (#39340191)

      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.

      Any such attempt would almost certainly be doomed to failure as Sergey and Larry have the vast majority of share votes. Google's IPO issued dual-class shares. The ones anyone can buy are class A shares, which get 1 vote each. Class B shares are only held by Google insiders and get 10 votes per share.

      Between the two of them, they have a little over 31% of the stock and about 80% of the votes.

    • by pz (113803) on Tuesday March 13, 2012 @01:37PM (#39340919) Journal

      Just waiting for a shareholder initiative to kill the 20% developer personal research time off.

      Last week, I just happened to pay a personal visit to some Google employees in Moutain View who are friends of mine. The 20% is already gone.

  • by JustAnotherIdiot (1980292) on Tuesday March 13, 2012 @12:24PM (#39339841)
    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.
  • by eldavojohn (898314) * <eldavojohn.gmail@com> on Tuesday March 13, 2012 @12:27PM (#39339871) Journal
    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.
  • 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.

  • 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 :(?
  • by Novogrudok (2486718) on Tuesday March 13, 2012 @12:28PM (#39339891)
    "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.
  • by Mabbo (1337229) on Tuesday March 13, 2012 @12:29PM (#39339903)
    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.
    • by Americano (920576) on Tuesday March 13, 2012 @12:45PM (#39340163)

      So he was saying that the internet really is a series of tubes?

    • by tlhIngan (30335)

      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 p

  • by jeffb (2.718) (1189693) on Tuesday March 13, 2012 @12:34PM (#39339977)

    ...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.

  • by 3seas (184403) on Tuesday March 13, 2012 @12:35PM (#39339995) Journal

    There is another place where massive amounts of money changes hands, devaluation happens and absolutely no additional products are produced.

    The Wold Stock market,

  • by Shoten (260439) on Tuesday March 13, 2012 @12:36PM (#39340029)

    "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.

  • by forkfail (228161) on Tuesday March 13, 2012 @12:42PM (#39340111)

    ... 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.

  • by mapkinase (958129) on Tuesday March 13, 2012 @12:46PM (#39340183) Homepage Journal

    > 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.

  • by exabrial (818005) on Tuesday March 13, 2012 @12:53PM (#39340277)
    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!
  • by brainzach (2032950) on Tuesday March 13, 2012 @12:54PM (#39340293)

    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 .

  • by Beeftopia (1846720) on Tuesday March 13, 2012 @01:00PM (#39340359)

    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 [wikipedia.org] 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. [bloomberg.com]

  • Scale (Score:5, Interesting)

    by SirGarlon (845873) on Tuesday March 13, 2012 @01:22PM (#39340703)
    From TFA:

    In 2011, Google spent $5.2 billion on research

    Just to put that in perspective, the entire DARPA [darpa.mil] research budget for 2011 was 3.28 billion [google.com]. 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 [cnet.com]. 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.

  • by ThatsNotPudding (1045640) on Tuesday March 13, 2012 @01:28PM (#39340793)
    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.
  • by devjoe (88696) on Tuesday March 13, 2012 @02:00PM (#39341195)
    From the commentary on the KC fiber project (emphasis mine):

    Here was Google’s pitch: We're planning to build and test ultra high-speed broadband networks in a small number of trial locations across the United States. We'll deliver Internet speeds more than 100 times faster than what most Americans have access to today with 1 gigabit per second, fiber-to-the-home connections.

    And then at the end:

    Google could spend an average of $5,500 per home (yes, in another twist, the project seems to be fiber to the home) to hook up its fiber network ...

    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?

  • by Cyberllama (113628) on Tuesday March 13, 2012 @02:26PM (#39341609)

    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.

  • by Bensam123 (1340765) on Tuesday March 13, 2012 @04:27PM (#39343481)
    ...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...

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