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"Cash – As of September 30, 2011, cash, cash equivalents, and short-term marketable securities were $42.6 billion." During this quarter, Google made $302 milli

by dcurtis 15y ago

"Cash – As of September 30, 2011, cash, cash equivalents, and short-term marketable securities were $42.6 billion." During this quarter, Google made $302 million on interest alone. That's an impressive 11% of this quarter's net profit. I wonder what they plan to do with all that money.

deleted 15y ago
[deleted]
ChuckMcM 15y ago
Buy patents apparently :-) More seriously, I asked once about this when they were removing bottled water from the local mini-kitchens and dropping over 1 billion dollars a quarter into the bank. My question was "Gee, can't you spare a couple of million this quarter to keep the bottled water restocked?" and obviously the answer was that they could not. But from a corporate/strategic point of view having a lot of cash on hand makes executives more aggressive and that can be a good thing for the company. Just like employee's that are too afraid to lose their job to say what they really need to say, executives who are too afraid that their next decision could doom the company won't take those risks. Like anything there is a balance.
- jayzee 15y ago
  Glad that they took away the bottled water. It is still H20 from the water fountain.
- haberdasher 15y ago
  Removing bottled water is not a financial decision, but an environmental one. Every new employee is given a water bottle they can fill with water an infinite number of times. If they took away bottled water, I'm sure they replaced them with fruit juice, organic teas and all sorts of ambrosia.
  - babycakes 15y ago
    So, they replaced the plastic bottle of water with a plastic bottle of flavored water-like beverage. Sounds like an environmental win to me.
    - jemfinch 15y ago
      They replaced bottled water with a water dispenser that dispenses ambient, cold, and sparkling water. Many engineers still choose to drink ordinary water even with all the flavored options.
  - ChuckMcM 15y ago
    I should have noted that the bottled water 'discussion' at Google was long and heated and what Googler's would call a multi-centa-thread [1]. There were folks who shared the position stated above that it was environmentally 'better' to not have bottled water in the mini-kitchens. And there were folks of a more empiricist frame of mind who analyzed data and came to an alternative conclusions. Understand the company is very data driven. Watching it unfold was educational on so many levels. [1] A 'Centa-thread' being an email discussion that gets to 100 replies where Gmail would fork it and start new conversation.
    - quattrofan 15y ago
      Interesting, since I've never got to a 100 reply email I've not seen this.
- rachelbythebay 15y ago
  They basically proved that our benefits were their safety cushion. The water bottles were only one example. Remember when they changed the shuttles and screwed a bunch of people's schedules until the backlash forced yet another recalculation?
  - ChuckMcM 15y ago
    Oh absolutely, at some level 'quality of life' benefits always have the property that if you are in danger of not making your numbers for wallstreet you can quickly shut them down, just giving an internal measure of control over one part of the profit/loss statistics.
- sbochins 15y ago
  Bottled water is a scam. Most of the stuff comes from water hoses. I'm sure the stuff they had at google was laced with tasty minerals and went through purification processes. There is so much plastic that ends up in the ocean/street because of bottled water. Its really a shame.
  - ChuckMcM 15y ago
    Yes and no. My understanding that most bottled water is re-packaged tap water which is sold at a markup. A number of people miss the functional aspect of bottled water which is that you are going from point a to point b and you want to drink something on the way. As it turns out, the data collected supported the hypothesis that a significant fraction of the bottled water drinkers were of this category (not drinking it because it was 'better' but drinking it because it was water convieniently packaged for transport in a single serving). The result was that removing bottled water simply lead to substitution of other beverages which were not 'water' but were convieniently packaged. A lot of folks suggested carrying around a drinking bottle or mug so that you could refill it at various points. And, giving free water bottles to people, that did meet some of the need (not sure how widely that program was tried). A proposed solution that was never even tried was to have Google bottle its own water on site (very eco, very doable) and stock that. This would have satisfied just about everyone except it didn't pass the 'saves money' test, which was, ultimately the basis for all of the changes. And it is always the responsibility of management to manage their costs effectively. Generally the debate was around the true cost vs the ledger (dollars and cents) effect.
mburns 15y ago
Am I missing something? $302 million on $42 billion is <1% return.
- mikeryan 15y ago
  Am I missing something? $302 million on $42 billion is <1% return. Yeah, net profit was 2.73 billion, 302 million of which was made on interest. $42 billion is total cash on hand.
- Steko 15y ago
  Why would this comment be downvoted? He's pointing out the interest is not all that impressive and if that's 11% of profit then the results are probably even less impressive then claimed.
- robryan 15y ago
  For the quarter, which would be over 3% for the year. Which doesn't seem to bad if your not putting your money into overly risky things. Treasury bonds may be yielding less?
  - jpdoctor 15y ago
    You're right: The long bond is less, so what are they invested in? "Marketable securities" with 3% yield means that they have something not AAA (which probably makes sense on such a large cash hoard) but there will come a day when interest rates go up. That will cause the value of their bonds to drop substantially. Hell, I'd like 3% on my money.
    - 2arrs2ells 15y ago
      Get a rewards checking account: http://www.fatwallet.com/forums/finance/775437/ http://www.fatwallet.com/forums/finance/775437/
    - robryan 15y ago
      Looks like we have it easy in Australia http://www.commbank.com.au/personal/accounts/savings-accounts/netbank-saver/rates-fees.aspx http://www.commbank.com.au/personal/accounts/savings-account...

by dcurtis 15y ago

deleted 15y ago

[deleted]

ChuckMcM 15y ago

Buy patents apparently :-) More seriously, I asked once about this when they were removing bottled water from the local mini-kitchens and dropping over 1 billion dollars a quarter into the bank. My question was "Gee, can't you spare a couple of million this quarter to keep the bottled water restocked?" and obviously the answer was that they could not. But from a corporate/strategic point of view having a lot of cash on hand makes executives more aggressive and that can be a good thing for the company. Just like employee's that are too afraid to lose their job to say what they really need to say, executives who are too afraid that their next decision could doom the company won't take those risks. Like anything there is a balance.

jayzee 15y ago
Glad that they took away the bottled water. It is still H20 from the water fountain.
haberdasher 15y ago
Removing bottled water is not a financial decision, but an environmental one. Every new employee is given a water bottle they can fill with water an infinite number of times. If they took away bottled water, I'm sure they replaced them with fruit juice, organic teas and all sorts of ambrosia.
- babycakes 15y ago
  So, they replaced the plastic bottle of water with a plastic bottle of flavored water-like beverage. Sounds like an environmental win to me.
  - jemfinch 15y ago
    They replaced bottled water with a water dispenser that dispenses ambient, cold, and sparkling water. Many engineers still choose to drink ordinary water even with all the flavored options.
- ChuckMcM 15y ago
  I should have noted that the bottled water 'discussion' at Google was long and heated and what Googler's would call a multi-centa-thread [1]. There were folks who shared the position stated above that it was environmentally 'better' to not have bottled water in the mini-kitchens. And there were folks of a more empiricist frame of mind who analyzed data and came to an alternative conclusions. Understand the company is very data driven. Watching it unfold was educational on so many levels. [1] A 'Centa-thread' being an email discussion that gets to 100 replies where Gmail would fork it and start new conversation.
  - quattrofan 15y ago
    Interesting, since I've never got to a 100 reply email I've not seen this.
rachelbythebay 15y ago
They basically proved that our benefits were their safety cushion. The water bottles were only one example. Remember when they changed the shuttles and screwed a bunch of people's schedules until the backlash forced yet another recalculation?
- ChuckMcM 15y ago
  Oh absolutely, at some level 'quality of life' benefits always have the property that if you are in danger of not making your numbers for wallstreet you can quickly shut them down, just giving an internal measure of control over one part of the profit/loss statistics.
sbochins 15y ago
Bottled water is a scam. Most of the stuff comes from water hoses. I'm sure the stuff they had at google was laced with tasty minerals and went through purification processes. There is so much plastic that ends up in the ocean/street because of bottled water. Its really a shame.
- ChuckMcM 15y ago
  Yes and no. My understanding that most bottled water is re-packaged tap water which is sold at a markup. A number of people miss the functional aspect of bottled water which is that you are going from point a to point b and you want to drink something on the way. As it turns out, the data collected supported the hypothesis that a significant fraction of the bottled water drinkers were of this category (not drinking it because it was 'better' but drinking it because it was water convieniently packaged for transport in a single serving). The result was that removing bottled water simply lead to substitution of other beverages which were not 'water' but were convieniently packaged. A lot of folks suggested carrying around a drinking bottle or mug so that you could refill it at various points. And, giving free water bottles to people, that did meet some of the need (not sure how widely that program was tried). A proposed solution that was never even tried was to have Google bottle its own water on site (very eco, very doable) and stock that. This would have satisfied just about everyone except it didn't pass the 'saves money' test, which was, ultimately the basis for all of the changes. And it is always the responsibility of management to manage their costs effectively. Generally the debate was around the true cost vs the ledger (dollars and cents) effect.

mburns 15y ago

Am I missing something? $302 million on $42 billion is <1% return.

mikeryan 15y ago
Am I missing something? $302 million on $42 billion is <1% return. Yeah, net profit was 2.73 billion, 302 million of which was made on interest. $42 billion is total cash on hand.
Steko 15y ago
Why would this comment be downvoted? He's pointing out the interest is not all that impressive and if that's 11% of profit then the results are probably even less impressive then claimed.
robryan 15y ago
For the quarter, which would be over 3% for the year. Which doesn't seem to bad if your not putting your money into overly risky things. Treasury bonds may be yielding less?
- jpdoctor 15y ago
  You're right: The long bond is less, so what are they invested in? "Marketable securities" with 3% yield means that they have something not AAA (which probably makes sense on such a large cash hoard) but there will come a day when interest rates go up. That will cause the value of their bonds to drop substantially. Hell, I'd like 3% on my money.
  - 2arrs2ells 15y ago
    Get a rewards checking account: http://www.fatwallet.com/forums/finance/775437/ http://www.fatwallet.com/forums/finance/775437/
  - robryan 15y ago
    Looks like we have it easy in Australia http://www.commbank.com.au/personal/accounts/savings-accounts/netbank-saver/rates-fees.aspx http://www.commbank.com.au/personal/accounts/savings-account...