I remember an article about Japan's premier pro baseball team hiring the 2nd best and sitting them on the bench just so that they don't play for the other team.
Revenue is always lagging indicator. Besides, only Wall Street analysts make decisions based primarily on revenue. You can do a lot better than that. I think they're overstaffed when they hire people and they're bored, and I think that's been the case at Google for quite some time now.
The kinds of people Google likes to hire are "entertained" by stuff like really difficult technical problems and making useful stuff that people actually use. I'm not suggesting they need to take their staff to the movie theater.
So then you mean they are making a mistake when they hire people that would be bored, instead of finding difficult technical problems and making cool useful stuff. I think you're right.
Isn't this just what google is doing?
It is a win win situation for them.