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They invest the float. edit: Removed reference to cash conversion cycle because it doesn't really have anything to do with that.
by foobarqux 12y ago
They invest the float.
edit: Removed reference to cash conversion cycle because it doesn't really have anything to do with that.
- miahi 12y agoIt's Google, they have plenty of cash, do they really need to invest the float of a $20 data plan?
- foobarqux 12y agoNo, they could make a business unit less profitable than it could be. They can also afford to throw money away, it doesn't mean that they should.
- Dylan16807 12y agoThe point is they don't need to do that to such an extent that it will affect the plans offered. It's a nice bonus, but no more than a bonus.
- pbhjpbhj 12y agoI find this sort of thing really quite clever - I wonder how much of a factor it is in the decision process, do they tailor it in specifically or is it just a nice extra; what sort of money are we talking? My best guess with 2mins of [re]search: Let's suppose they hold on average $10 per month per customer that's unused, Nexus 5 sold between 3-5 million units, apparently. So for Nexus 6's on their Fi plan they're likely only looking at the invested benefit of $30M (USD)? Google probably have that sort of cash down the back of the sofa, would they even bother investing the float? Or are my guestimations just way off?? UK utilities I've always assumed are doing this hence the wilder and wilder over-estimation of bills in order to hold more customers cash. Wonder how much Google will push the "let us hold your cash, you'll get back what you don't spend" line in order to have more cash to play with. How evil are they prepared to get to hold some extra pocket change?
- foobarqux 12y agoYeah, although they probably invest the float, the main reasoning for the decision is likely consumer psychology as described by richardoughtery