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Google 'Wasting' $16 Billion On Projects Headed Nowhere

timothy posted more than 2 years ago | from the preemptive-sour-grapes dept.

Businesses 408

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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408 comments

killed? (5, Insightful)

dittbub (2425592) | more than 2 years ago | (#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? (5, Insightful)

0racle (667029) | more than 2 years ago | (#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.

Re:killed? (2)

dittbub (2425592) | more than 2 years ago | (#39339887)

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? (4, Funny)

Opportunist (166417) | more than 2 years ago | (#39340057)

But they could make (pinky to mouth) TRILLIONS!

Re:killed? (5, Insightful)

Anthony Mouse (1927662) | more than 2 years ago | (#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:killed? (3, Insightful)

phrostie (121428) | more than 2 years ago | (#39339899)

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? (5, Insightful)

ByOhTek (1181381) | more than 2 years ago | (#39340151)

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? (5, Interesting)

Oswald McWeany (2428506) | more than 2 years ago | (#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:killed? (-1)

Anonymous Coward | more than 2 years ago | (#39339941)

You should be picked up, held overhead, and dumped headfirst into Google's trash pile.

Then a junkyard dog will walk by and urinate on your head, adding insult to injury.

OOO! OOOO! I'm a babooooooo--ooo--oo--oon!

Re:killed? (2)

matt_gaia (228110) | more than 2 years ago | (#39340041)

^
This.

More than likely, a lot of the projects that Google is working on are not things that will pay off immediately, but in the end, will pay off. They are at least trying to establish the path that other companies *should* take once the technology becomes cheaper/more viable, instead of just sitting on their cash saying "know what we should do with our money? Put more money on top of it." like most companies would.

Re:killed? (0)

renek (1301131) | more than 2 years ago | (#39340123)

Put more money on top of it." like Apple does..

FTFY

Re:killed? (2)

ByOhTek (1181381) | more than 2 years ago | (#39340195)

And this scares other companies, because they'll have to do the same to remain competitive, but they don't want to, because it interrupts the status quo, and their ability to put decent chunks of that money spent on "wasted R&D" into their pockets.

Googles MO it a risk, but, I suspect so long as too many others aren't taking the same risk, it's pretty likely to pay off well.

This is what happens when you have investors (0)

Anonymous Coward | more than 2 years ago | (#39339761)

Everyone questions what you do.

Re:This is what happens when you have investors (4, Insightful)

dittbub (2425592) | more than 2 years ago | (#39339801)

but investor capitalism is the ultimate creator of innovation! it can't possible stifle it!?

Re:This is what happens when you have investors (5, Interesting)

forkfail (228161) | more than 2 years ago | (#39339999)

The definition of investor has gone from "someone who places a portion of their wealth into a company in the belief that what the company is doing has inherent value and worth and will make money over time" to "someone who buys the privilege of gorging at a cannibalistic feast."

Re:This is what happens when you have investors (4, Insightful)

bhcompy (1877290) | more than 2 years ago | (#39340081)

Basically. This is why they kept majority control of their shares, and why Facebook and every other new tech IPO is doing the same. Investors hate it and bitch about it to the SEC and others, but fuck you Mr Investor, you destroyed the goddamned economy.

Re:This is what happens when you have investors (4, Insightful)

Opportunist (166417) | more than 2 years ago | (#39340179)

It used to be that way, get with the times.

Investing used to be risky. You risked a bit of your money on the chance of getting a ton of revenue out of it. High risk, high gain. Nothing wrong with that, if your risk is high, your profit margin should be high as well, so people actually dare to risk something and push us further on the pursuit of better technology and new, exciting inventions.

That's no longer the case. Investing today means putting your money into an innovative company whose creator already took all the risk and managed to come out on top. Mostly because they had a new and clever idea and dared to follow it. You pretty much offer them the choice between taking your money or watching you use that money to build a competitor instead. Either's fine by you, and either will allow you to come out on top, but pumping money in their existing venture needs less effort from your side.

Then you simply milk them dry, throw them away and move on to the next guys that had a nifty idea, risked it and succeeded.

How is this a waste? (3, Insightful)

Anonymous Coward | more than 2 years ago | (#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.

Re:How is this a waste? (5, Insightful)

trainman (6872) | more than 2 years ago | (#39339849)

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?

Re:How is this a waste? (4, Insightful)

Anonymous Coward | more than 2 years ago | (#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!

Re:How is this a waste? (-1)

Anonymous Coward | more than 2 years ago | (#39340165)

Because Google is no Xerox Parc, Bell Labs and IBM Research.

Re:How is this a waste? (1)

Opportunist (166417) | more than 2 years ago | (#39340213)

That's pretty much where it should go, at least when shareholders get their wish. They want money. They don't care whether the company creates software, hardware or rubber boots, or anything at all for that matter, what matters is whether they get as much money as they could possibly squeeze from the company.

Yes, that bleeds a company dry over time. But why would shareholders care? If the company folds, dump it and move on to the next.

Re:How is this a waste? (1)

mcavic (2007672) | more than 2 years ago | (#39339963)

On one hand, you don't know whether or not it's a waste until you try.

On the other, you can have a good idea that dies from poor execution. For example, Google Desktop. Never mind that it was killed by Vista. It was a good product plagued by a few bugs and inadequacies that Google wasn't interested in fixing.

Still, you might have to sift through a lot of little ideas to come up with the next killer app. You have to look at the net good of the company, not just the losses.

Its called risk and research. (5, Insightful)

Kenja (541830) | more than 2 years ago | (#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.

Re:Its called risk and research. (0)

Anonymous Coward | more than 2 years ago | (#39339825)

Sometimes that pans out, sometimes it doesn't.

You've got the DuPonts and such on one end, and the Yahoo's on the other. Sometimes you just don't get much in the way of hits, and don't know when to kill stuff.

And you've noticed how much shit Google catches when they kill dead-dick experimental services that only four people use, yeah?

Re:Its called risk and research. (4, Insightful)

Necroman (61604) | more than 2 years ago | (#39339969)

And you've noticed how much shit Google catches when they kill dead-dick experimental services that only four people use, yeah?

The people complaining about services being shutdown are users/consumers of Google. The people complaining about Google wasting money are investors. While there will be overlap between the 2 group, this complaining is solely from the viewpoint of an investor.

Re:Its called risk and research. (0)

vlm (69642) | more than 2 years ago | (#39339853)

Essentially that's the point of the article, are they a search engine, an ad delivery service, a music retailer, or a venture capital firm? Their internal operations would very theoretically be more efficient if they could decide what kind of business to focus on.

Re:Its called risk and research. (4, Insightful)

Kenja (541830) | more than 2 years ago | (#39339945)

"are they a search engine, an ad delivery service, a music retailer, or a venture capital firm". Yes, and more. If you just want the status quo, go back to using infoseek.com. Google is one of the few companies actually coming out with new stuff. This is a good thing (well not the few part).

Re:Its called risk and research. (0)

Anonymous Coward | more than 2 years ago | (#39339985)

Efficiency is for those who haven't succeeded in laying waste to all competition in multiple industries. Google is so big, and makes so much money, they can afford to drop billions on pipe-dream projects and still make a sizable profit.

Re:Its called risk and research. (0)

Anonymous Coward | more than 2 years ago | (#39340065)

Search Engine/Ad delivery service. But there's limits to what that will bring in by way of profits. They've got to branch out- and that's kind of what they're trying to do with that 16 Billion that's being "wasted".

I think it's come time to pretty much quit wasting time and money on "analysts" that can't understand that there's short-term profits and long-term ones; and that pretty much all 'they talk to is not sustainable in the long run. Things would be much, much better overall if we'd have businesses quit looking only 1-4 quarters into the future just to appease idiots (In my not so humble opinion...) like the article author.

Re:Its called risk and research. (0)

Anonymous Coward | more than 2 years ago | (#39339937)

Heinlein's "Long Range Foundation", as done by Google.
I expect it to work, and people will call it a fluke, despite the amount of money and research being thrown at random projects just to find the few that pay off.

Re:Its called risk and research. (0)

Anonymous Coward | more than 2 years ago | (#39340013)

That's what mergers and acquisitions are for. When you're a big company you milk the cash cows for everything they're worth and purchase your innovations from small shops to have taken on 90% of the risk. I'm not saying it's right, or even successful in the long term, it's just the way big business is run now.

Re:Its called risk and research. (4, Insightful)

Missing.Matter (1845576) | more than 2 years ago | (#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.

Re:Its called risk and research. (1)

Kenja (541830) | more than 2 years ago | (#39340085)

Can you back up that claim? I see a LOT of money going to Google for API & geocode tools, email filtering, etc.

Re:Its called risk and research. (4, Informative)

Missing.Matter (1845576) | more than 2 years ago | (#39340181)

It's reported by Google themselves: http://www.sec.gov/Archives/edgar/data/1288776/000119312512025336/d260164d10k.htm [sec.gov]

The relevent quote: "We generated 96% of our revenues in 2011 from our advertisers."

Also you can find this statistic in any of their SEC quarterly filings. This number is of course down from 99% a few years ago, but with the addition of thousands of projects in the same time period I don't think any are earning large returns.

Re:Its called risk and research. (4, Informative)

Qwavel (733416) | more than 2 years ago | (#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.

Contact beat us to it (0)

Anonymous Coward | more than 2 years ago | (#39339797)

David: Science must be accountable to the people paying for it, the taxpayers. We must stop wasting money on pie-in-the-sky abstractions and spend it on practical, measurable ways to improve the lives of the people who are paying.
Ellie: You want to do away with all pure research now?
David: What’s wrong with science being practical? Even profitable?
Palmer: Nothing, as long as your motive is the search for truth. Which is what the pursuit of science is.

Shareholders want to buy... (5, Insightful)

forkfail (228161) | more than 2 years ago | (#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.

Re:Shareholders want to buy... (1)

Nerdfest (867930) | more than 2 years ago | (#39339865)

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

Re:Shareholders want to buy... (0)

Anonymous Coward | more than 2 years ago | (#39339893)

Yep, this is exactly the problem with shareholders driving public companies' #1 priority. It's a wonder any innovative company even offers voting shares nowadays; they're just opening themselves to be driven by greed and will end up being hollow at the core.

Re:Shareholders want to buy... (-1)

Americano (920576) | more than 2 years ago | (#39340129)

If companies don't like the influence shareholders have over their goals and priorities, they DO have the option of not going public, and remaining a privately-held company.

If you put yourself out on the market asking for investments, then you should expect that the people who loan you the money will be looking for a reasonable return on that investment, and will want to have some input into your priorities and goal-setting to make sure you're not taking their money and pissing it away on hookers and coke.

If you don't want a lot of other fingers in the pie, don't ask other people to fund your pie-making. It really is that simple.

Re:Shareholders want to buy... (0)

Anonymous Coward | more than 2 years ago | (#39340115)

This is the advantage of maintaining the majority of the voting shares with a very small group of stakeholders. They can ignore (at least for now) the other shareholders as their vote doesn't matter on paper.

On the flip-side, if they alienate a large enough pool investors it could drive down the share value enough to cause (read: force) them to change their ways.

Re:Shareholders want to buy... (1)

KermodeBear (738243) | more than 2 years ago | (#39340121)

To me, that 20% personal research time not only greatly benefits the company but also keeps the developers happy. Everyone wins. I wish that my current company had such a policy.

Re:Shareholders want to buy... (2)

Svartalf (2997) | more than 2 years ago | (#39340143)

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".

Re:Shareholders want to buy... (3, Informative)

compro01 (777531) | more than 2 years ago | (#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.

Well.... (0)

Anonymous Coward | more than 2 years ago | (#39339833)

"Google’s projects seem more likely to fail than succeed." , for those who try something new this is the general rule, this was probably written by someone who never run a company or even a small investment. I failed more than 10 times until I got my company a decent product, but guess what, it paid of.

Yeah Right (0, Insightful)

Anonymous Coward | more than 2 years ago | (#39339837)

Article +1 Troll

So? (0)

Anonymous Coward | more than 2 years ago | (#39339839)

The only people I'm told that really matter here are the share-holders and employees. Unless the share-holders have a problem with it, who gives a crap what Google burns it's money on. As long as the quarter profits are good, and market price is relatively stable, why should I care? Really! Why should I care what Google burns it's money on when I have no vested monetary interest in it.

And please, SHOW YOUR WORK!

No such thing as wasted projects (3, Interesting)

JustAnotherIdiot (1980292) | more than 2 years ago | (#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.

Re:No such thing as wasted projects (0)

Anonymous Coward | more than 2 years ago | (#39339915)

And maybe these projects give the engineers some time to work on things they enjoy. Happy workers is something that doesn't show up on a stock analysis report, but it does equate to a better company, and I am glad google "wastes" money in these ways. It isn't like they are hurting for cash either. This just seems to be a pointless hit piece, I guess Apple/Yahoo/Microsoft PR was bored today.

Re:No such thing as wasted projects (5, Informative)

Newander (255463) | more than 2 years ago | (#39339943)

I have not failed. I've just found 10,000 ways that won't work.
-Thomas Edison

Re:No such thing as wasted projects (1)

Svartalf (2997) | more than 2 years ago | (#39340169)

And, if you had the speculative bunch, coupled with the "analysts" we have these days, Edison wouldn't have gotten to the record player or the light bulb- because they'd have been bitching at him "wasting" all of that money on those 10k attempts and trying to tell him to quit doing it.

Re:No such thing as wasted projects (0)

Anonymous Coward | more than 2 years ago | (#39340021)

In my eyes, at least, projects are ways to find something that works.

But, in the eyes of high-powered investors and financial "journalists", all that petty "research", "(real) innovation", and "project" nonsense is just for the little companies to do, solely as means to gain favor with larger companies so as to gloriously ascend into buyouts.

Re:No such thing as wasted projects (1)

residieu (577863) | more than 2 years ago | (#39340045)

I wouldn't go that far. You have to get some idea of how much the project will cost vs how much it will likely bring in if successful and how likely it is to be successful (or how much useful knowledge/tools will come about as a side-effect...)

Google Is as Dumb as the Farmers! (4, Insightful)

eldavojohn (898314) | more than 2 years ago | (#39339871)

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.

Re:Google Is as Dumb as the Farmers! (0)

Anonymous Coward | more than 2 years ago | (#39339991)

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.

And if they listened to you then their wheat would get infected, die and they would go bankrupt.

Re:Google Is as Dumb as the Farmers! (0)

Anonymous Coward | more than 2 years ago | (#39340083)

whoosh....

Re:Google Is as Dumb as the Farmers! (1, Troll)

ConceptJunkie (24823) | more than 2 years ago | (#39340113)

Check your sarcasm meter. I think you need to replace the batteries.

Re:Google Is as Dumb as the Farmers! (1)

DECula (6113) | more than 2 years ago | (#39340047)

I *really* wish for mod points right now. Excellent point, sir. I'm sure it really chaffs the bean counters behinds.

Re:Google Is as Dumb as the Farmers! (0)

Anonymous Coward | more than 2 years ago | (#39340139)

And what is expenditure on fertilizer and pesticide? Does this result in a increase of yield that makes more than the cost of purchasing and deploying said fertilizer and pesticide, plus the cost in labor and equipment?

I want Monsanto the Devil to come up with a shorter wheat plant so I do not waste money growing those tall, resource hogging plants.

Even failed projects are better than no projects (1)

Zerth (26112) | more than 2 years ago | (#39339873)

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.

What, Pray Tell (0)

rshol (746340) | more than 2 years ago | (#39339881)

Is GOOG making money off of that is not advertising related to search? If I were an investor I'd want to know what they've spent the cash they haven't paid out as dividends on and what return they've produced on it. With $44bn in cash, why are they wasting money on driverless cars and not paying dividends?

Re:What, Pray Tell (2)

goofy183 (451746) | more than 2 years ago | (#39340035)

Uh, because they know that ads cannot be the income source forever? They need to find the next big thing and be there first or someone else will eventually beat them at their own game and then they'll go poof.

Yet another problem with being driven by quarterly profits instead of long term viability.

Re:What, Pray Tell (-1)

Anonymous Coward | more than 2 years ago | (#39340037)

Pray tell? Seriously dude? I'm not sure if you wrote anything after that - cause I, and the rest of the world without their head up their ass, stopped reading.

Re:What, Pray Tell (1)

medcalf (68293) | more than 2 years ago | (#39340205)

They're one syllable words. He did all he could for you. You have to do the rest of the comprehension yourself.

Re:What, Pray Tell (0)

Anonymous Coward | more than 2 years ago | (#39340051)

Driverless cars will reduce the cost of accumulating up to date streetview data. Streetview is a market discriminator in google maps which drives advertising revenue to google.

what about.... (1)

bubulubugoth (896803) | more than 2 years ago | (#39339883)

Creating, maybe sustaining jobs and a few more patents to their war chest? Sounds like a good investment for me. Of course, I don't have that kind of money, but they do!

$16 Billion wage bill (1)

ciderbrew (1860166) | more than 2 years ago | (#39339889)

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 :(?

Attack of the Beancounter (5, Insightful)

Novogrudok (2486718) | more than 2 years ago | (#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.

Re:Attack of the Beancounter (1)

hjf (703092) | more than 2 years ago | (#39339979)

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.

See: Kodak.

Re:Attack of the Beancounter (3, Insightful)

forkfail (228161) | more than 2 years ago | (#39340067)

Who needs "search"? Gopher fills that niche.

Searching for hoses (5, Insightful)

Mabbo (1337229) | more than 2 years ago | (#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.

Re:Searching for hoses (3, Funny)

Americano (920576) | more than 2 years ago | (#39340163)

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

It's actually reassuring to me. (1)

Anonymous Coward | more than 2 years ago | (#39339907)

So many times I see here folks say, "Just start a business!" when someone complains about job prospects. If it were that easy, then everyone would start a business and be rich.

It's hard coming up with something that's marketable and implementing it.

And also, it is quite interesting that Google has hardly any R&D projects that are web related, isn't it? That tells me that they also think the internet (and any business associated with it) is already a mature industry and saturated.

There is more to value than money (1)

Anonymous Coward | more than 2 years ago | (#39339909)

I'm sick to death of this prevailing attitude that the only value something has is its monetary worth. Just because something isn't profitable, it isn't worth doing. Fuck that. These asstunnels need to get a sense of fucking perspective.

Re:There is more to value than money (1)

PessimysticRaven (1864010) | more than 2 years ago | (#39340185)

... You know that the entire site is built with a BUSINESS mindset, yes? ... Did the "Sponsored by IBM" bit next to the site logo throw you off?

I'm sure thousand of years ago (0)

Anonymous Coward | more than 2 years ago | (#39339923)

people were alread bitching about the inventor of the wheel as a dreamer wasting his time and not puling his own weight.

Google Roulette (1)

gmuslera (3436) | more than 2 years ago | (#39339965)

If the net profit in investing in a lot of projects where some are hit is positive, then they are winning. What if the clasical roulette paid 100 times the original bet, between 37-38 alternatives? what if paid 1000 times? You bet in all the alternatives and get for sure profits.

My God, it's full of fail... (4, Informative)

jeffb (2.718) (1189693) | more than 2 years ago | (#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.

Re:My God, it's full of fail... (0)

Anonymous Coward | more than 2 years ago | (#39340109)

Maybe they think research is useless...

Wasn't already invented everything that could possibly be invented?

if yo think that bad... in Perspective (2)

3seas (184403) | more than 2 years ago | (#39339995)

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

The Wold Stock market,

What's wrong with pure capitalism (0)

Anonymous Coward | more than 2 years ago | (#39340023)

In World War 2, many new technologies were developed to help with the war that translated over to civilian use as well. The advances of WW2 were some of the last MAJOR advances that we had in science, and they weren't done for instant profit.

Re:What's wrong with pure capitalism (1)

ConceptJunkie (24823) | more than 2 years ago | (#39340197)

Well, to be fair, I would consider "not being annihilated by our enemies" to be "instant profit", just not the money kind.

I think the example you are looking for is the American space program in the 60s and 70s. Yes, there was a geopolitical angle to the space race, but it was also largely an exercise in pure research for its own sake. I mean, really, reaching the moon was a laudable goal in terms of exploration and science, but it was not something that was expected to yield short term profits, nor did it. But the resulting technological gains were immense.

research (1)

GregNorc (801858) | more than 2 years ago | (#39340027)

How does this compare to the amount that other large, successful companies spend on research?

Because guess what: long term gambles with no immediate payoff - that's basically corporate research.

What percent of Google's operating costs is spent on these projects, versus say, the amount spent on Microsoft Research or HP Labs?

(We all agree that having a corporate research division is good, right?)

It's like skiing... (4, Insightful)

Shoten (260439) | more than 2 years ago | (#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.

The problem with modern corps... (0)

Anonymous Coward | more than 2 years ago | (#39340053)

This idea that the 16 billion is wasted is what is wrong with modern corporations. This is R&D type activities. Many or even most will fail to produce a direct product which will add to the bottom line and stock indicators. Failures teach companies things as much as successes do however and the idea that the only work worth doing is that which moves a stock indicator is why companies are so over leveraged, subject to crises of confidence, and run by pinhead accountants to maximize existing revenue streams rather than create new ones. Google may need to look a bit at their efficiency or how they support R&D (something the article hints at) but the idea that the money is wasted is a cancerous thought that has become a pandemic among those who run modern public companies.

Pour Slashdot... (0)

Anonymous Coward | more than 2 years ago | (#39340063)

A stupid article from a page you have to subscribe to read...
Is slashdot loosing its quality?

Learning a waste of time? (0)

Anonymous Coward | more than 2 years ago | (#39340069)

If you consider learning a waste of time, you could say that.

Microsoft has Microsoft Research.

Google doesn't put all their research in a separate division.

Thomas Edison (0)

Anonymous Coward | more than 2 years ago | (#39340099)

Thomas Alva Edison (February 11, 1847 – October 18, 1931) was an American inventor and businessman. He developed many devices that greatly influenced life around the world, including the phonograph, the motion picture camera, and a long-lasting, practical electric light bulb. Dubbed "The Wizard of Menlo Park" (now Edison, New Jersey) by a newspaper reporter, he was one of the first inventors to apply the principles of mass production and large teamwork to the process of invention, and therefore is often credited with the creation of the first industrial research laboratory.[2]

Edison is the fourth most prolific inventor in history, holding 1,093 US patents in his name, as well as many patents in the United Kingdom, France, and Germany. He is credited with numerous inventions that contributed to mass communication and, in particular, telecommunications. These included a stock ticker, a mechanical vote recorder, a battery for an electric car, electrical power, recorded music and motion pictures.

His advanced work in these fields was an outgrowth of his early career as a telegraph operator. Edison originated the concept and implementation of electric-power generation and distribution to homes, businesses, and factories – a crucial development in the modern industrialized world. His first power station was on Manhattan Island, New York.

Unfortunately most companies in the U.S. have forgotten what it is to innovate, Take American car companies. They are playing catchup with the japanese and the rest of the world and now all those cars on the road that should be American cars are now largely Japanese and european.

Steve Jobs warned Larry Page about this (1)

peter303 (12292) | more than 2 years ago | (#39340101)

Larry asked Steve's advice about returning as CEO. Steve basically said "keep it simple".

Same thing was said about Amazon... (3, Interesting)

forkfail (228161) | more than 2 years ago | (#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.

Man (1)

Anonymous Coward | more than 2 years ago | (#39340119)

This article really makes me mad !!!!!!!!! "But robot-driven cars aren’t even legal anywhere but (where else?) Nevada." WTF is this point!!!! Look lady when they made 1st TV there were no TV shows, dumb asses right.

Driverless Car?!?! (1)

theNAM666 (179776) | more than 2 years ago | (#39340127)

Yeah, 'cause we all know that a driverless car is a pie-in-the-sky idea with no market whatsoever. It's not like any state legislatures are going to change the rules of the road to allow the infernal things, or anything-- they'll never fly.

P.S. And there will be no related technologies derived from the cars whatsoever, for instance, no self-controlling hummingbird-sized Ahmajinedad-search-and-destroy drones. Never.

There is a point in that ... (1)

CannonballHead (842625) | more than 2 years ago | (#39340155)

... Google does seem to have a hard time getting some of their useful projects to be used.

However, that's not to say it's wasted. I'm just saying that some of their projects could have been nice if they'd introduced it earlier, better, differently, or something (for example ... Google+. I actually like it. Some nifty things, like the video chat. But... too little, too late. :(

Funny (0)

Anonymous Coward | more than 2 years ago | (#39340167)

The "study's" authors really want to know why Google didn't focus its R&D spending on those projects that end up working. Apparently, they haven't figured out the difference between foresight and hindsight yet.

They are too big (1)

Quantum_Infinity (2038086) | more than 2 years ago | (#39340177)

They have gotten too big. They could stand to lose a few pounds, I mean money.

"At press time, Google had not responded to Intern (4, Insightful)

mapkinase (958129) | more than 2 years ago | (#39340183)

> 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.

Mining Jello on The Moon (0)

4phun (822581) | more than 2 years ago | (#39340187)

There is no such thing as wasting money on research.

Google should join with there new friends at the NSA to investigate how we can mine jello on the moon.

With the unlimited resources of the US government and Google great strides can be made in our discovery of the steps needed for industrializing the moon and a profitable new market can be established that the West can dominate.

What? (1)

kbg (241421) | more than 2 years ago | (#39340193)

This is exactly what any innovative company should be doing, especially a company that has the money to spend. You should do development and research on many promising ideas, of course not all of them are going to work, but that is to be expected. This is not wasted money, whenever you can employee people and pay them for work it is not wasted money.

Roll up! Roll up! Learn the techniques to fail! (1)

Shazback (1842686) | more than 2 years ago | (#39340207)

"By its own admission, Google's approach to R&D is to run up a product or service and see who salutes. Forget intensive market studies, demand analytics, or any of the other techniques used by square, establishment corporations prior to investing in development. No, Google apparently sees itself as an exception to rules that govern ordinary organizations."

Given that Google is the 19th most profitable company in the USA [cnn.com] , that speaks volumes about the "other techniques used by square, establishment corporations".

Thank God some people at Google can see further than next week, or at least seem to have learnt from Xerox PARC, Bell Labs, and so many other research departments' experience.
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