Google’s recent push into tablets and mobile, along with offering new search services such as Google Instant, are pushing up the company’s capital expenditures, which are slotted to grow almost 184 percent in 2010 compared to last year. Next year, that amount is going to go even higher. This spending is a good thing, because it allows Google to leverage its inherent advantage: infrastructure.
A few years ago, I noted in a post that infrastructure was Google’s key competitive advantage. It’s what allowed the company to innovate and outpace its rivals. It allowed the company to give us results faster than our broadband connections could offer, making us more subservient to its search in the process. In the end, we all forgot the directories and instead focused on the search-box as the start of our Internet journey. Today, Google is a gigantic, $7.3-billion-in-quarterly-sales business.
One thing Google knows: It needs to keep spending money on this infrastructure in order to stay competitive and current. The company recently introduced Google Instant, a new feature that allows you to get results even as you’re still typing the search term. It’s a service akin to the days when an Intel chip got multimedia extensions.
In many ways, Google Instant demonstrates the evolution of a product in order to keep up with times; today’s faster broadband means that the search results need to come up faster than one could type. More importantly, Google Instant is a search product optimized for a brave new world where the user interface is touch rather than keyboards, and devices aren’t your classic computer, but instead mobile and tablet-like.
One of the reasons Google was able to launch Google Instant is because it can afford to spend a lot of money on its infrastructure. During the third quarter of 2010, the company spent nearly $757 million, the highest amount since the first quarter of 2008, according to investment bank J.P. Morgan. (In comparison, Google spent a total of $810 million on capital expenditures in all of 2009.) In a conference call with Wall Street yesterday, Google VP Jonathan Rosenberg told the analyst community:
From a revenue standpoint, its impact has been very minimal; and from a resource standpoint, it’s actually pretty expensive. So why did we do it? Well, we believe from a user standpoint, Instant is outstanding and the data that we are seeing actually bears this out.
Google’s spending on capital expenditures (mostly on data centers) had been on a decline. That is about to change. According to J.P. Morgan, the company is going to spend $2.3 billion on capital expenses in 2010 versus $810 million last year. For next year, the investment bank is forecasting $3.2 billion in capital spending.
Some Wall Street analysts are going to view this increased spending and wring their hands. They’re idiots and short-term thinkers. I see the growth in capital expenses as a sign of health, and that things are going well for Google –actually, really well.
Let me explain; until recently, Google had to focus on a small subset of actions to satisfy its end customers – all of us – and thus make money off of advertising. Throw in YouTube videos and Gmail, if you want, but browser-based search and search-based advertising were its bread and butter.
Google is said to be the single biggest source of traffic on many of the world’s networks and that’s with only a handful of offerings. Now imagine how big Google will be as a percentage of the source of Internet traffic once we start taking their new initiatives into account. That also explains why they need to build their own networks and lay their own fiber pipes.
Now the number of consumer interactions has grown multifold. Google’s Android mobile operating system is an Internet-enabled OS peppered with Google services that are used more frequently because we have access to them in our pockets. This overall growth in data center capabilities is only going to go up as the company becomes more successful with its Android push. By spending on data centers and networks, what Google is ensuring is that Google Android will always have a great user experience. Remember, in a world dominated by cloud clients, nothing matters more than instant access to various Internet services.
Related content from GigaOM Pro (subscription req’d) about Google, and its Mobile Efforts:
- Why Google Should Fear the Social Web
- Report: Google’s Voice Possibilities
- How Mobile Cloud Computing Will Change Tech
So, why did this particular ad hit a nerve with the online audience, and what was Target really going for?
I think that the internet DIY set reacted to making fun of a costume that fits their ethos perfectly. Last halloween, for example, one DIY dad became a YouTube hit when he posted an awesome homemade Iron Man costume he made for his kid. Is Target's message really that the kid would have been better off wearing a storebought version? If so, citizens of the internet (and makers in particular) are right to be a little ticked off.
As for the non-DIYers, I think that what made them upset was the way Target tried to manipulate kids by playing the dual role of the bully who makes fun of your costume and the cool parent who just wants to help you fit in, unlike your weird, lame, Iron-Man-suit-building mom.
That doesn't work, though, because the parents who will be paying for the costumes are the ones who teach their kids that bullying and peer pressure are wrong, and that creativity is good. The bigger, more popular kid who mocks your costume is the bad guy in every cartoon and after-school special. Why would any kid root for him? And why would parents root against their own nostalgia for (sometimes embarrassing) homemade Halloween outfits? (And if this ad was made to be seen by kids, it sure was shot poorly.)
That leads me to a distasteful theory about who Target was, well, targeting with this commercial. It's not aimed at internet geeks with the time, money and technical skills to make amazing Iron Man costumes for their kids. They aren't going to go to Target for a costume anyway. It's aimed at parents who don't have that time, money or expertise, and who don't want their kids to be singled out as weird or poor. Did Target pick a black family for the ad because they think African-American parents fit that profile? That would be the grossest type of marketing, but I think it's possible.
It doesn't matter if you can't make (or afford to make) your kid a costume, though: the ad still fails because the homemade costume it shows is cool. That mom did a great job with it, and clearly put in some time and effort, so there's nothing for her kid to be embarrassed about. If Target wanted to invoke shame and peer-pressure to make parents feel self-conscious about their income or costume-making skills, they should have at least shown a costume that was actually bad.
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Google’s recent push into tablets and mobile, along with offering new search services such as Google Instant, are pushing up the company’s capital expenditures, which are slotted to grow almost 184 percent in 2010 compared to last year. Next year, that amount is going to go even higher. This spending is a good thing, because it allows Google to leverage its inherent advantage: infrastructure.
A few years ago, I noted in a post that infrastructure was Google’s key competitive advantage. It’s what allowed the company to innovate and outpace its rivals. It allowed the company to give us results faster than our broadband connections could offer, making us more subservient to its search in the process. In the end, we all forgot the directories and instead focused on the search-box as the start of our Internet journey. Today, Google is a gigantic, $7.3-billion-in-quarterly-sales business.
One thing Google knows: It needs to keep spending money on this infrastructure in order to stay competitive and current. The company recently introduced Google Instant, a new feature that allows you to get results even as you’re still typing the search term. It’s a service akin to the days when an Intel chip got multimedia extensions.
In many ways, Google Instant demonstrates the evolution of a product in order to keep up with times; today’s faster broadband means that the search results need to come up faster than one could type. More importantly, Google Instant is a search product optimized for a brave new world where the user interface is touch rather than keyboards, and devices aren’t your classic computer, but instead mobile and tablet-like.
One of the reasons Google was able to launch Google Instant is because it can afford to spend a lot of money on its infrastructure. During the third quarter of 2010, the company spent nearly $757 million, the highest amount since the first quarter of 2008, according to investment bank J.P. Morgan. (In comparison, Google spent a total of $810 million on capital expenditures in all of 2009.) In a conference call with Wall Street yesterday, Google VP Jonathan Rosenberg told the analyst community:
From a revenue standpoint, its impact has been very minimal; and from a resource standpoint, it’s actually pretty expensive. So why did we do it? Well, we believe from a user standpoint, Instant is outstanding and the data that we are seeing actually bears this out.
Google’s spending on capital expenditures (mostly on data centers) had been on a decline. That is about to change. According to J.P. Morgan, the company is going to spend $2.3 billion on capital expenses in 2010 versus $810 million last year. For next year, the investment bank is forecasting $3.2 billion in capital spending.
Some Wall Street analysts are going to view this increased spending and wring their hands. They’re idiots and short-term thinkers. I see the growth in capital expenses as a sign of health, and that things are going well for Google –actually, really well.
Let me explain; until recently, Google had to focus on a small subset of actions to satisfy its end customers – all of us – and thus make money off of advertising. Throw in YouTube videos and Gmail, if you want, but browser-based search and search-based advertising were its bread and butter.
Google is said to be the single biggest source of traffic on many of the world’s networks and that’s with only a handful of offerings. Now imagine how big Google will be as a percentage of the source of Internet traffic once we start taking their new initiatives into account. That also explains why they need to build their own networks and lay their own fiber pipes.
Now the number of consumer interactions has grown multifold. Google’s Android mobile operating system is an Internet-enabled OS peppered with Google services that are used more frequently because we have access to them in our pockets. This overall growth in data center capabilities is only going to go up as the company becomes more successful with its Android push. By spending on data centers and networks, what Google is ensuring is that Google Android will always have a great user experience. Remember, in a world dominated by cloud clients, nothing matters more than instant access to various Internet services.
Related content from GigaOM Pro (subscription req’d) about Google, and its Mobile Efforts:
- Why Google Should Fear the Social Web
- Report: Google’s Voice Possibilities
- How Mobile Cloud Computing Will Change Tech
So, why did this particular ad hit a nerve with the online audience, and what was Target really going for?
I think that the internet DIY set reacted to making fun of a costume that fits their ethos perfectly. Last halloween, for example, one DIY dad became a YouTube hit when he posted an awesome homemade Iron Man costume he made for his kid. Is Target's message really that the kid would have been better off wearing a storebought version? If so, citizens of the internet (and makers in particular) are right to be a little ticked off.
As for the non-DIYers, I think that what made them upset was the way Target tried to manipulate kids by playing the dual role of the bully who makes fun of your costume and the cool parent who just wants to help you fit in, unlike your weird, lame, Iron-Man-suit-building mom.
That doesn't work, though, because the parents who will be paying for the costumes are the ones who teach their kids that bullying and peer pressure are wrong, and that creativity is good. The bigger, more popular kid who mocks your costume is the bad guy in every cartoon and after-school special. Why would any kid root for him? And why would parents root against their own nostalgia for (sometimes embarrassing) homemade Halloween outfits? (And if this ad was made to be seen by kids, it sure was shot poorly.)
That leads me to a distasteful theory about who Target was, well, targeting with this commercial. It's not aimed at internet geeks with the time, money and technical skills to make amazing Iron Man costumes for their kids. They aren't going to go to Target for a costume anyway. It's aimed at parents who don't have that time, money or expertise, and who don't want their kids to be singled out as weird or poor. Did Target pick a black family for the ad because they think African-American parents fit that profile? That would be the grossest type of marketing, but I think it's possible.
It doesn't matter if you can't make (or afford to make) your kid a costume, though: the ad still fails because the homemade costume it shows is cool. That mom did a great job with it, and clearly put in some time and effort, so there's nothing for her kid to be embarrassed about. If Target wanted to invoke shame and peer-pressure to make parents feel self-conscious about their income or costume-making skills, they should have at least shown a costume that was actually bad.
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Juan Williams said Tuesday that he's still upset about his firing from NPR, and added that NPR does not understand the Fox News culture or audience. In an interview with Baltimore Sun columnist David Zurawik, Williams said he remains ...
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Google and news organizations have had a rocky time of it. To overdramatize the situation only slightly: Google insists that it cares about journalism as a.
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The night is darkest ere the dawn... and dawn has ever been the hope of Men! After days of closed door talks between New Zealand Prime Minister John Key and.
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