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In 2014, 89% of Google's revenue comes from advertising. Google is an advertising company with a lack of focus. I don't think I would call "use the war chest an

In 2014, 89% of Google's revenue comes from advertising. Google is an advertising company with a lack of focus. I don't think I would call "use the war chest and try a bunch of stuff to move forward" a strategy. It feels like floundering, exactly like Microsoft's "Take the Windows/Office war chest and find the next big thing" doldrums of the last decade. https://investor.google.com/earnings/2014/Q4_google_earnings.html https://investor.google.com/earnings/2014/Q4_google_earnings...

dimino 11y ago
What else are you supposed to do when you conquer your market? Spending more money to be an even bigger Internet ad player would suffer diminishing returns, so you hunt for better investments that'll (here comes the buzzword) synergize with your current money maker (ads). At least at first, Google's "floundering" was always focused back onto advertisement -- e.g. Android to capture the mobile market.
- jimbokun 11y ago
  "What else are you supposed to do when you conquer your market?" Pay out massive dividends.
  - nostrademons 11y ago
    The assumption when you pay out massive dividends is that the stock market as a whole can invest that capital more efficiently than you can. It remains to be seen whether that's the case, but given how the average Fortune 500 company operates and the trends of technological change that are happening right now, I really doubt it.
    - walshemj 11y ago
      No but the company does belong to the share holders who might want to have some dividend payments.
      - dragonwriter 11y ago
        > No but the company does belong to the share holders Only in the sense that: (1) The shareholders have specified voting rights (which, to the extent that they want dividend payments, they can exercise those voting rights to get them), and (2) The shareholders have a claim on the residual assets of the firm in the event of dissolution. Of particular note, the way voting rights are structured in Google, the shareholders to whom Google "belongs" in sense #1 are predominantly the narrow band of insiders holding Class B (10 votes/share) shares, not the masses holding class A (1 vote/share) or Class C (0 votes/share) shares.
        walshemj 11y ago
        You know the FTSE has kicked company's out of indexes for having dodgy share classes.
      - coliveira 11y ago
        Don't forget that Google is also an anti-shareholder company. They have several times introduced their own tricks to remove power from shareholders and give it to upper management. Paying shareholders a dividend seems to be last thing they would want to do.

dimino 11y ago

What else are you supposed to do when you conquer your market? Spending more money to be an even bigger Internet ad player would suffer diminishing returns, so you hunt for better investments that'll (here comes the buzzword) synergize with your current money maker (ads). At least at first, Google's "floundering" was always focused back onto advertisement -- e.g. Android to capture the mobile market.

jimbokun 11y ago
"What else are you supposed to do when you conquer your market?" Pay out massive dividends.
- nostrademons 11y ago
  The assumption when you pay out massive dividends is that the stock market as a whole can invest that capital more efficiently than you can. It remains to be seen whether that's the case, but given how the average Fortune 500 company operates and the trends of technological change that are happening right now, I really doubt it.
  - walshemj 11y ago
    No but the company does belong to the share holders who might want to have some dividend payments.
    - dragonwriter 11y ago
      > No but the company does belong to the share holders Only in the sense that: (1) The shareholders have specified voting rights (which, to the extent that they want dividend payments, they can exercise those voting rights to get them), and (2) The shareholders have a claim on the residual assets of the firm in the event of dissolution. Of particular note, the way voting rights are structured in Google, the shareholders to whom Google "belongs" in sense #1 are predominantly the narrow band of insiders holding Class B (10 votes/share) shares, not the masses holding class A (1 vote/share) or Class C (0 votes/share) shares.
      - walshemj 11y ago
        You know the FTSE has kicked company's out of indexes for having dodgy share classes.
    - coliveira 11y ago
      Don't forget that Google is also an anti-shareholder company. They have several times introduced their own tricks to remove power from shareholders and give it to upper management. Paying shareholders a dividend seems to be last thing they would want to do.