Is Google Bleeding Money Despite Financial Reports?

Since Larry Page took the helm at Google from Eric Schmidt, the Internet world has gotten flipped on its end literally. The search giant’s direction toward a free and agnostic web toward the same corporate evil the company once criticized has done a 180. News this week Google has raked massive profits begs the question; “Oh really now?” Maybe Google has accountants as skilled as their anti-trust lawyers, lobbyists, and other evangelists?

The fellow who ushered in “Page” rank for categorizing and validating websites near and far, has since invalidated tens of millions of them via Panda and Penguin, now Hummingbird, not to mention putting the dollar bill before any hope the “little guy” can ever prevail.

When measured in indications like anti-trust suits won, and a whaling of competition imbalance worldwide, America’s most revered tech name has a lot of mud on it now. Put bluntly, much of the web world now looks at the company as a literal monopoly, and worse still, the poster child of all geekdom apparently “caved” to “the man” in delivering user data to the NSA.

Sergey Brin - courtesy Wikipedia

Sergey Brin – courtesy Wikipedia

If every a hacker or pale skinned tech geek adored Sergey Brin’s (above) “do no evil” dogma, surely a throng out there are not disenchanted. I for one cast aside my blinders over Google about the time somebody manually stripped away a decade of our work with the black hat SEO Sodomites. If you’ll excuse the metaphor there, the collateral damage of Google’s SPAM Tsar Matt Cutts’ efforts are just onerous. And that’s the least of my personal gripes really. Trust me, I’m not nearly alone for divorcing Google for irreconcilable differences.

As for this week’s good Google stock news, USA Today’s Matt Krantz, reflects:

“Google’s stock jumped $122.61, or 14%, to $1,011.41 Friday after the Internet company showed just how lucrative collecting and selling consumers’ personal data to the highest bidder can be.”

Forgetting acute disgust with wholesale betrayal for now, it’s just sad to watch potential wash down the drain. Anybody who was naive enough to believe the owners of the New York Times, or even Mayor Bloomberg himself were going to stand idly by and share the limelight with “citizen journalists” and the little guy – we were all just stupid. Now that I’ve been fully transparent about my vested interest and view, let me give you the benefit of more opinion on Google profitability.


Since this is opinion, I’ll just say right here I think Google bean counters are juggling numbers. I mean juggle a bit more creatively than your average family tax preparation bean counter out there. I’m no CPA, but the balance sheet at Google just released, just somehow doesn’t seem to jive with this BBC report on yet another Google stock bonanza. Maybe some interested friends out there will scan through the Google Inc. balance sheets released for Q3 2013 (PDF) and enlighten me here. BBC and Google report the last three month’s earnings at $2.97 billion for the July-to-September, up 12% y on y accordingly. Here’s the interesting part where revenue is concerned though.

Google increased ad revenue (apparently) by increasing advertising for ads, and by cutting the cost too, in order to increase volume. Compared with the previous year, this quarter’s $13.754 billion does beat last year at the same time ($11,526) by the prescribed $2.28 billion. It costs Google more to get that increase though, in fact almost a billion dollars more. That’s not the misleading thing though, what the BBC and other stock reporting media does not say is that a large portion of the current Google earnings boom is “cut” costs (somehow) from Motorola, or about $511, 000 dollars.

Larry PageIf you go down the columns of the Google Inc. balance sheet, almost all the costs and expenditures for Google operations have gone up, by a lot. Meanwhile revenues “feel” nebulous, making me want to look deeper into the “other” outside ad revenue earnings. Without wracking my brain or going back to accounting or economics, it’s noteworthy to notice Google sold or saw mature over $6 billion in negotiable securities during the period. You Harvard economists can do the rest of the deciphering via the PDF up there, for me I’m seeing a company with $105 billion in liabilities today, up $12 billion since the same time last year – and some of that is stock revenues.

Finally, my friend Chris Abraham attempts to clarify the “desperate nature” of Google’s recent Hummingbird insertion here. In a landscape of big time publishers desperate for revenue, aggravated by dog-eat-dog eCommerce corporations, and fueled by griping and greedy shareholders, it was inevitable Brin and Page (above right) would run headlong into the dreaded “pay the devil” his due scenario. Data to the NSA, using users’ data to sell ads, backstabbing advocates, maybe even buying Congress? This turning us all upside down, it is just beginning to feel more like death-throes form a smoke and mirrors ad company, rather than the all powerful semantic search giant and innovator of old.

I think the Google boys are playing the stock market myself. What’s your take?

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