Writely.com -- Google has "opened the doors"

[Darren Dirt]

Google purchased 'em in January of 2006... Curious what kinda "work" was done on the innards before it went "go for launch"...

http://www.google.com/support/writely
http://www.writely.com/?action=register

[Lazybones]

Google added BETA to the title so it would match all their other products

[Shayne]

Ooo...yet another product google launches that will never make a dime   Oh to be a shareholder in that company

[Mr. Analog]

Ooo...yet another product google launches that will never make a dime   Oh to be a shareholder in that company

Ok, since you are privvy to Googles financially unsuccessful projects, can you share that list please?

There are a lot of companies who would like to have a piece of word processing software that has "zero footprint", in fact you work for a company that sells such a product. I imagine the plan at Google is to develop many different projects, send them out to the world as Beta software (without the goal of instant market dominance), let word of mouth generate interest and see how well they do. If something works well (like Google News or GMail, for example) then they go live with it, to me that's smarter than developing something in a vacuum and then trying to generate product awareness through advertising.

[Shayne]

Google Talk
Google Earth
Picasa
Google Analytics
Google Spreadsheet

...im sure i could come up with more.  Google is horrible single dimensional as a company, they are simply advertising and when another company be it Ask.com, Yahoo or Microsoft come up with a better search engine flavor of the month Google cash flow will fall as it relies 100% (nearly?) on its adsense advertising.

Don't get me wrong, I use all of the listed applications (doubt i will use the office applications), they just seem to spend big cash for no (little?) return.  I would have however loved to buy the stock when it was like $80 or something.

[Mr. Analog]

Here's a pretty good article that describes how Google makes it's cash.

[...]of the company?s $6.2 billion in revenue in 2005, over $6 billion is from the ads. Imagine that - Google can make so much money from ads which cost from a few pennies, to a few dollars per click.

6 billion!

[Shayne]

Net income of say 1.4B, thats a pretty small chunk of change compared to a company who actually boxes up its products and sells them (12B)

[Tom]

That company likely has a greater market cap

[Shayne]

Double the market cap, 10x the profit

[Darren Dirt]

Google is horrible single dimensional as a company, they are simply advertising and when another company be it Ask.com, Yahoo or Microsoft come up with a better search engine flavor of the month Google cash flow will fall as it relies 100% (nearly?) on its adsense advertising.

*ahem* didn't Yahoo's search engine display the words: "Search results by Google" for many months... If not still?

[Tom]

Double the market cap, 10x the profit

Monopoly, infinite profit.

[Shayne]

Are you not running Linux?  seems like monopoly averted.

[Thorin]

Net income of say 1.4B, thats a pretty small chunk of change compared to a company who actually boxes up its products and sells them (12B)

Double the market cap, 10x the profit

Market cap is simply the number of shares available times the price per share.  As an investor, market cap doesn't help you make money; you make money either by getting dividends paid out or by the share price increasing from what you bought them at. 

This can only be discussed by comparing real numbers:

MSFT (market cap)
- Market Cap: $268,490,000,000
- Twelve Month Revenue: $44,282,000,000
- Twelve Month Net Income: $12,599,000,000
- Net Income as Percentage of Revenue: 28.45%
- Net Income Four Years Ago: $7,531,000,000
- Net Income Increase in Four Years as Percentage: 67.3%

GOOG (market cap)
- Market Cap: $128,250,000,000
- Twelve Month Revenue: $ 6,138,560,000
- Twelve Month Net Income: $ 1,465,400,000
- Net Income as Percentage of Revenue: 23.87%
- Net Income Four Years Ago: $99,660,000
- Net Income Increase in Four Years as Percentage: 1,370.4%

Yes, Google makes less income as a percentage of revenue.  Keep in mind, though, that Microsoft was formed in 1976, whereas Google wasn't formed until 1998.  That gives Microsoft 22 years extra to build up a solid revenue base.  So perhaps in another twenty-two years, Google will catch up or surpass Microsoft's revenues?  Who knows.  One thing's for sure, Google hasn't bothered to pay out any dividends yet so as an investor you only make money from the capital gain (increase in the price of the stock).

Anyway, 2.1x the market cap, 8.6x the net income; so a bit less than what you claimed.  In the long term, I think net income as percentage of revenue is much more important.  And in that sense, I'd look at the fact that it's 7.2x the revenue, 8.6x the net income; Google is surprisingly good at generating a decent net income on much less revenue, and is still experiencing huge increases in its net income.  I'm sure that'll plateau in a couple of years unless they come up with something new to generate more revenue, and that seems to be your point, Shayne.  I'm pretty sure that Google's management sees it, too, and that's why they're so busy trying to come up with all kinds of new technologies, to see what will take hold and build revenue.

And as far as projects that don't generate revenue, Microsoft has its share as well.

[Shayne]

*cough* their entire gaming division hasn't made a dime in like 5 years *cough*

We need companies to push google into new thinking.  Ask.com mis doing some nice stuff with their search engine, but google is already being microsoft-like in its lack of innovation.

[Darren Dirt]

Net income of say 1.4B, thats a pretty small chunk of change compared to a company who actually boxes up its products and sells them (12B)

Double the market cap, 10x the profit

Market cap is simply the number of shares available times the price per share.  As an investor, market cap doesn't help you make money; you make money either by ... numbers ... and stuff... etc. etc. ...

I was told there would be no math.