
Google Earned Over $9 Billion In Revenue In Q2 - ssclafani
http://techcrunch.com/2011/07/14/google-q2-2011/
======
thematt
Good for them and I think the best is yet to come. I view Google's work on
robotics and automated vehicles as a secret weapon. Should the future consist
of semi/fully automated vehicles (a very realistic possibility) Google is
going to have a warchest of patents, licenses and technology that will
generate tons of cash.

~~~
dangrossman
Does Google really have any of that? The automated vehicle tech was entirely
from the DARPA Grand Challenge / DARPA Urban Challenge teams who 'solved' the
autonomous driving problem years prior. Any patents and licenses are owned by
those teams and the universities they come from. From the articles I read way
back when it sounded like Google was just working with those people to hook
their systems up to Priuses with no mention of developing anything of their
own. Maybe I missed it in other coverage.

~~~
MikeCapone
<http://en.wikipedia.org/wiki/Google_driverless_car>

Thank you Google for allowing me to find that page in less than a second ;)

~~~
nazgulnarsil
"the technology is now advancing so quickly that it is in danger of
outstripping existing law, some of which dates back to the era of horse-drawn
carriages."[3]

HA, yeah heaven forbid that tech make driving safer and more efficient without
the regulators and legislators along for the ride. because, you know, they
make everything better.

~~~
megablast
Your right, companies should just be able to throw whatever they want on the
road. How dare the government create rules to interfere in the safety of other
people. After all, aren't we living in a post-apocalypse mad-max type world.

The fact is it takes a long time to decide how safe something is, especially
on the roads. I know it is fun in the US to rail against the government, and
forget about the wonderful world we live in, that is incredibly safe, thanks
to these regulations.

~~~
uvdiv
_The fact is it takes a long time to decide how safe something is, especially
on the roads._

For each month this technology's market deployment is delayed, there's a 9/11
of American deaths in car accidents. Even if Google went ahead with maximally-
unsafe public beta tests and killed a _hundred_ people, that would still
probably cause an enormous net savings of lives.

~~~
henrikschroder
I know that, and you know that, but the general public is really bad at doing
proper cost-benefit-analysis.

If 3000 people kill themselves (and/or their passengers) each month, that's
"ok", that's accidents, they happen, it's noone's fault.

If driverless cars kill 100 people each month, then IT'S SOMEONE'S FAULT.
Someone is liable. Someone can be sued. Someone in that case being the company
that makes these driverless cars.

This means that personal cars will have a human somewhat in control to absorb
the blame for a very long time.

I think the first driverless vehicles we'll allow on the roads will be
unmanned trucks. They don't need a human onboard since they only transport
goods, not people, and there's a huge efficiency gain if you can remove truck
drivers, since they need to eat and sleep.

And then when people have gotten used to driving alongside fully automatic
vehicles, public opinion might shift to also allow people to be transported by
similar systems.

~~~
paganel
> I think the first driverless vehicles we'll allow on the roads will be
> unmanned trucks. They don't need a human onboard since they only transport
> goods, not people, and there's a huge efficiency gain if you can remove
> truck drivers, since they need to eat and sleep.

Rail and water-transport are a lot mot cheaper than trucks (either manned or
un-manned). The only thing that keeps them (the trucks) running is the cheap
price of gasoline in the States.

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yaakov34
It's useful to keep these numbers in perspective in all the excitement. Browse
<http://en.wikipedia.org/wiki/List_of_companies_by_revenue> and convince
yourself that we're not quite living in a virtual world yet. The list is
dominated by giant oil companies, with Exxon and Shell with $370 billion in
annual revenues a piece (that's more than the GDP of all but around 25
nations). Manufacturing is also pretty well represented (Toyota: $240 billion
in revenue in 2010). On the other hand, Apple now apparently outsells Boeing.
That's pretty impressive.

~~~
rafaelc
Look at the margins when comparing Google vs. oil companies. That paints an
entirely different picture.

~~~
yaakov34
The picture I was looking at is weight in the economy. We - I guess I am
making some assumptions about the audience here - sometimes get so caught up
in the kinds of things that are important to us, that we forget that this is
not the whole world. I mean, Google+ vs. Facebook is fascinating, but this is
probably not the most momentous conflict that history will record for the
early 21st century.

And speaking of profit, apparently Exxon made $11 billion last quarter - more
than the revenue number we're talking about here. Yeah, the margin is lower,
but...

~~~
tomjen3
If the margin is lower, then you get more for investing money in Google.

Margins matter.

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coolgeek
(Sorry if this comes across as pedantic, but the dissonance here is striking.)

"Revenue" and "earnings" have fairly specific meanings, particularly with
regard to each other.

"Google earned $2.85B on revenues of $9.03B in Q2" would have been a better
title, as would "Google revenues top $9B in Q2".

~~~
zandorg
I once attended a job fair/event at my University, and the guy from HP said
(to a crowd) they have PROFITS of $80 billion a year. I didn't inform him that
was REVENUE, I just walked out on him.

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steveb
I wonder how much longer the big losses at Bing will be allowed to continue.

The Yearly growth in Google's revenue this quarter alone is almost equal to
the entire annual revenue of Microsoft's online division.

Google is growing at 25-30+% while MS online grew 14% in the spring quarter.

And it costs MS about two dollars to generate a dollar of revenue online.

~~~
arctangent
It's possible that MS is prepared to spend money in "inefficient" ways if that
means that they're preventing money going into their competitors' pockets.

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zmmmmm
What always strikes me about Google's numbers is that they seem relatively
small when taken in context of how large Google seems to be in its presence
and perception. People talk about Google as a tech "giant" - but compare
revenue numbers:

    
    
      Google - $9B
      Apple  - $24B
      IBM    - $29B
      Microsoft - $16B
    

Based on this in terms of being a "tech giant" Google would seem to be the
underdog - yet they certainly aren't perceived or treated that way.

~~~
robryan
Revenue is a bad way to compare these companies, Apple is selling $1000
iphones and $2000+ laptops, which have a fairly high production cost. Whereas
the margin on a PPC click would be massive.

~~~
zmmmmm
Yes, I thought about comparing profit but actually I think revenue is more
interesting because it represents to some extent the company's "weight", or
spending power. Apple may spend a lot to manufacture their devices, but that
spend also represents part of their huge influence in the computing landscape.
It accounts for things like retail stores and massive advertising budgets
which are enormously important. Sure if you only look at revenue then you
over-estimate their influence but you equally under-estimate their influence
if you only look at profit.

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dangrossman
Stock is up 12.18% in after-hours trading. At their size and stock price
that's amazing. Boy do I wish I had a few shares now.

------
earbitscom
A company at that size growing 32% Y-o-Y is just amazing. Go Google.

~~~
MikeCapone
What's impressive is that they'er doing it mostly by giving people what they
want and providing best of breed services rather than by using every
opportunity to lock people in and attack their competitors with underhanded
tactics ( _cough_ patent trolling).

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trentfowler
Holy Bejesus!

Edit: I'm no stock market wizard but I would still buy Google stock tomorrow.
For the foreseeable future, they're going up up up. Mark my words, they'll be
pulling 10 billion a quarter before too long.

~~~
18pfsmt
A savvy investor would wait for the market to cool off in a bit and buy at a
much lower price. We haven't seen $600/share since March, but if you see how
these things operate over a duration you will see that after most spikes there
is a pull back. Wait for the pull back.

EDIT: Also, options expire tomorrow (3rd Friday of every month), so there is
ample manipulation opportunity.You can get an idea of what's going on in the
options market here:

<http://www.google.com/finance/option_chain?q=NASDAQ:GOOG>

~~~
RobAtticus
I would agree with this. Google is up over $100 since G+ came out, so I think
there will be some people eager to sell tomorrow to cash in on the strong
uptick.

~~~
18pfsmt
Taking a further look: while just looking at the most popular options' strike
prices, there are 10,141 put options at a strike price of $500/share, and
there are 7,736 call options at a strike price of $550/share. I find looking
at the spread with all the details interesting. I suspect most of the people
modeling this are paid to keep it proprietary. I wish I had the talent,
because it could probably start a fascinating discussion on a site like this.

EDIT: put option numbers were incorrect. Time stamp is ~6:30 PM EST.

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ChuckMcM
It is interesting to compare that number to VC funds [1]. In the first half of
2011 there was 10.2B$ raised for funding startups, in the first half of 2011
Google put $5B in the bank.

[1]
[http://nvca.org/index.php?option=com_docman&task=doc_dow...](http://nvca.org/index.php?option=com_docman&task=doc_download&gid=770&Itemid=93)

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juiceandjuice
Sounds like Larry knew what he was doing.

~~~
jackowayed
I can't imagine that Larry had a major impact on the revenue in his first
quarter in charge.

~~~
ignifero
But it's not like he joined the company last quarter. If the launch of g+
indicated anything, google is speeding up.

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zentechen
Looking at the slide, with my limited accounting knowledge, it seems Google
has managed to decrease the total cost of expense which contributed to the
increase in revenue from Q1.

~~~
Hawramani
I thought revenue was separate from expenses.

~~~
dfranke
Here's how it works:

Revenue = everything your customers pay you.

Cost of revenue = expenses that scale up directly with revenue. For a
manufacturing company, this would typically consist mainly of what they pay to
their suppliers. In Google's case, power and bandwidth are major items.

Gross profit = Revenue - cost of revenue

Operating expenses = costs that aren't directly tied to revenue, such as
payrolls and building leases. Operating expenses also include depreciation of
capital assets, the computation of which is somewhat of a black art.

Operating profit = Gross profit - operating expenses.

Net profit = Operating profit +/- any profit or loss on investing activities,
including interest on any money the company has borrowed or lent.

(Disclaimer: IANAA)

~~~
ww520
Excellent concise explanation.

