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
GOP candidates are making a point of running against "bailouts" this year. Yet even as they rail about rescuing big banks, they're working on a plan that would slip those same banks an estimated $90 billion in taxpayer money...and that's just in the first ten years.
"Fiscal conservatism," anyone?
It was always hypocritical to slam a bailout that they and their party initiated. But it turns out they were just warming up. Now they're trying to pull a fast one on the American public, tapping Tea Party rage about big government spending even as they prepare to slip the big bankers some big bucks. They're planning to siphon off $90 billion meant for America's college students and their families and give it to Wall Street.
Any Tea Partier who votes for these guys is being played for a sucker.
The Republican repeal plan wouldn't just put tens of billions of public dollars in bank coffers. It would also raise the maximum amount a graduate is forced to pay each year from 10 percent to 15 percent of income. And it would extend the length of time before their debt is forgiven from 20 to 25 years.
Your GOP: Sending billions in taxpayer money to rich bankers, and squeezing young people starting out in life. Call it the New Populism.
Small government? Less spending? The Republican Party's backdoor bailout of wealthy bankers is bigger than the auto-industry bailout. It's bigger than the home-loan program. It's bigger than the lending program for small businesses. And unlike those programs, it serves no social purpose at all:
This week, two Republican senatorial candidates were the latest to push this secret subsidy for Wall Street. Washington's Dino Rossi and Mark Kirk in Illinois were obviously working from the same playbook, since they made almost identical points while declaring their opposition to this year's student-loan reform. "You know, part of the takeover of government has been part of the student loans," said Rossi. "I don't think that we should adopt legislation that the Congress has moved forward to have a complete government takeover of all student loans," said Kirk.
Kirk and Rossi are talking about this year's student-loan reform. That program eliminated a cushy deal that gave private banks a percentage of government-loan funds for "administering" loans (they weren't actually lending the money). They performed their administrative duties both inefficiently and unethically. What's more, the banks took a portion of their vig and spent it on lobbyists in order to keep the pot sweetened for themselves. It didn't work -- but if the GOP has its way, it'll work next year.
You're not seeing a "populist" uprising on the right. You're seeing lobbyist and billionaire money at work, channeling genuine frustration and anger into an electoral plan designed to help bankers get even richer.
The "government takeover" argument is ridiculous, of course. In this case they're talking about a government takeover... of government. This is the public's money, and it's intended to be lent to students and their families so that the dream of an ever-more-expensive college education is available to more families. Taxpayers support this program so much that neither Kirk nor Rossi could afford to criticize it. But not too many of those taxpayers would support taking billions of their dollars and funneling it to Wall Street, as the GOP would do.
The "complete government takeover" statements are also absolutely false, since private students loans are still available. (See Pat Garafolo's excellent pieces on Rossi and Kirk for more detail.)
When private bankers managed the student-loan process, it was filled with rampant corruption that included kickbacks to school administrators. Millions of dollars meant for students were also stuffed in the pockets of lobbyists and politicians. (Details here.) And as for that "privatization" mantra we keep hearing from the GOP, consider this: The government created and funded Sallie Mae to help students get these government loans, and then privatized it. The result was a taxpayer-created and financed company that bought itself three private jets, paid bloated executive salaries, and threw government money at Washington pols (including a quarter of a million dollars for George W. Bush's inauguration).
(We've got more information on the loan program, and a rundown on the "private" Sallie Mae Corporation that includes a photo of one of those jets and their ID numbers.)
Because of our current hard times -- hard times brought about by the very same bankers who would get billions under the GOP plan -- our student-loan program is even more important than ever. Unemployment and underemployment for college graduates is soaring. The average college graduate's debt in 2009 was $24,000, up six percent from the year before, and that's before the full impact of the economic downturn. Diverting billions in federal student loan money to Wall Street under these circumstances is nothing short of obscene.
But the GOP has made it clear that they're in the bankers' back pockets. Sen. John Cornyn, head of the Republican Senate campaign committee, indicated they would immediately move to repeal the financial-reform bill if they gained power. That would give their banker friends free reign to exploit consumers and take even greater risks with the economy. This $90 billion giveaway of government money -- our money -- is just part of a larger pattern.
While neither Kirk nor Rossi were originally Tea Party candidates, they've both made their peace with the movement. Unnamed "Tea Party activists" from the State of Washington issued a letter of support for Rossi, while the formerly centrist Mark Kirk has flip-flopped on multiple issues in the last few months in order to pass Tea Party muster. Both candidates are part of a larger GOP plan to use anti-spending, anti-bank rhetoric in order to spend billions on subsidizing banks.
Billions for bankers, benefit cuts for students. A "privatization" scheme that lets a few people get rich off government programs, promoted in the name of "less spending" and "less taxes." That's the system that these Republicans want to bring back and even expand. They want to use student loan money as a piggy bank for rich piggies, tapping taxpayer dollars to to enrich their pals.
So my question for the Tea Party rank and file is this: Are you going to let the big banks and their politician cronies play you like this? Are you going to be a sucker? They've got $90 billion that says you will.
______________
About the table: The Department of Education Arne Duncan estimates the bank subsidy was costing approximately $9 billion per year, including the interest banks were able to collect . Given the rapid and ongoing increases in college tuitions, it's not unreasonable to think that the total amount could be wind up being much more than either figure. I used the data compiled by the New York Times for the other figures. In every case, I used the highest possible figures for the final cost of each program, to make my estimates as conservative as possible. (I stayed away from TARP, even though we're told it's making a profit, because the total cost is still unknown.)
The result was clear: This GOP's planned Wall Street giveaway was the biggest and costliest of all the programs listed.
Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future. This post was produced as part of the Curbing Wall Street project. Richard also blogs at A Night Light.
He can be reached at "rjeskow@ourfuture.org."
Website: Eskow and Associates
The Fox <b>News</b> “Lawn Jockey” and The Tolerant Left | RedState
Juan Williams' firing did not happen in a vacuum. It happened in the context of him having been the official Fox News lawn jockey stooge for years.
Energy and Global Warming <b>News</b> for October 22nd: Five renewable <b>...</b>
Polls, including the one from Wall Street Journal/NBC News released Wednesday, have shown that some voters are disenchanted with the Democrats and many voters remain undecided. Speaking at the Solar Power International (SPI) conference ...
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Royal Navy submarine HMS Astute stranded after accident near Skye Bridge.
eric seiger eric seiger
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
GOP candidates are making a point of running against "bailouts" this year. Yet even as they rail about rescuing big banks, they're working on a plan that would slip those same banks an estimated $90 billion in taxpayer money...and that's just in the first ten years.
"Fiscal conservatism," anyone?
It was always hypocritical to slam a bailout that they and their party initiated. But it turns out they were just warming up. Now they're trying to pull a fast one on the American public, tapping Tea Party rage about big government spending even as they prepare to slip the big bankers some big bucks. They're planning to siphon off $90 billion meant for America's college students and their families and give it to Wall Street.
Any Tea Partier who votes for these guys is being played for a sucker.
The Republican repeal plan wouldn't just put tens of billions of public dollars in bank coffers. It would also raise the maximum amount a graduate is forced to pay each year from 10 percent to 15 percent of income. And it would extend the length of time before their debt is forgiven from 20 to 25 years.
Your GOP: Sending billions in taxpayer money to rich bankers, and squeezing young people starting out in life. Call it the New Populism.
Small government? Less spending? The Republican Party's backdoor bailout of wealthy bankers is bigger than the auto-industry bailout. It's bigger than the home-loan program. It's bigger than the lending program for small businesses. And unlike those programs, it serves no social purpose at all:
This week, two Republican senatorial candidates were the latest to push this secret subsidy for Wall Street. Washington's Dino Rossi and Mark Kirk in Illinois were obviously working from the same playbook, since they made almost identical points while declaring their opposition to this year's student-loan reform. "You know, part of the takeover of government has been part of the student loans," said Rossi. "I don't think that we should adopt legislation that the Congress has moved forward to have a complete government takeover of all student loans," said Kirk.
Kirk and Rossi are talking about this year's student-loan reform. That program eliminated a cushy deal that gave private banks a percentage of government-loan funds for "administering" loans (they weren't actually lending the money). They performed their administrative duties both inefficiently and unethically. What's more, the banks took a portion of their vig and spent it on lobbyists in order to keep the pot sweetened for themselves. It didn't work -- but if the GOP has its way, it'll work next year.
You're not seeing a "populist" uprising on the right. You're seeing lobbyist and billionaire money at work, channeling genuine frustration and anger into an electoral plan designed to help bankers get even richer.
The "government takeover" argument is ridiculous, of course. In this case they're talking about a government takeover... of government. This is the public's money, and it's intended to be lent to students and their families so that the dream of an ever-more-expensive college education is available to more families. Taxpayers support this program so much that neither Kirk nor Rossi could afford to criticize it. But not too many of those taxpayers would support taking billions of their dollars and funneling it to Wall Street, as the GOP would do.
The "complete government takeover" statements are also absolutely false, since private students loans are still available. (See Pat Garafolo's excellent pieces on Rossi and Kirk for more detail.)
When private bankers managed the student-loan process, it was filled with rampant corruption that included kickbacks to school administrators. Millions of dollars meant for students were also stuffed in the pockets of lobbyists and politicians. (Details here.) And as for that "privatization" mantra we keep hearing from the GOP, consider this: The government created and funded Sallie Mae to help students get these government loans, and then privatized it. The result was a taxpayer-created and financed company that bought itself three private jets, paid bloated executive salaries, and threw government money at Washington pols (including a quarter of a million dollars for George W. Bush's inauguration).
(We've got more information on the loan program, and a rundown on the "private" Sallie Mae Corporation that includes a photo of one of those jets and their ID numbers.)
Because of our current hard times -- hard times brought about by the very same bankers who would get billions under the GOP plan -- our student-loan program is even more important than ever. Unemployment and underemployment for college graduates is soaring. The average college graduate's debt in 2009 was $24,000, up six percent from the year before, and that's before the full impact of the economic downturn. Diverting billions in federal student loan money to Wall Street under these circumstances is nothing short of obscene.
But the GOP has made it clear that they're in the bankers' back pockets. Sen. John Cornyn, head of the Republican Senate campaign committee, indicated they would immediately move to repeal the financial-reform bill if they gained power. That would give their banker friends free reign to exploit consumers and take even greater risks with the economy. This $90 billion giveaway of government money -- our money -- is just part of a larger pattern.
While neither Kirk nor Rossi were originally Tea Party candidates, they've both made their peace with the movement. Unnamed "Tea Party activists" from the State of Washington issued a letter of support for Rossi, while the formerly centrist Mark Kirk has flip-flopped on multiple issues in the last few months in order to pass Tea Party muster. Both candidates are part of a larger GOP plan to use anti-spending, anti-bank rhetoric in order to spend billions on subsidizing banks.
Billions for bankers, benefit cuts for students. A "privatization" scheme that lets a few people get rich off government programs, promoted in the name of "less spending" and "less taxes." That's the system that these Republicans want to bring back and even expand. They want to use student loan money as a piggy bank for rich piggies, tapping taxpayer dollars to to enrich their pals.
So my question for the Tea Party rank and file is this: Are you going to let the big banks and their politician cronies play you like this? Are you going to be a sucker? They've got $90 billion that says you will.
______________
About the table: The Department of Education Arne Duncan estimates the bank subsidy was costing approximately $9 billion per year, including the interest banks were able to collect . Given the rapid and ongoing increases in college tuitions, it's not unreasonable to think that the total amount could be wind up being much more than either figure. I used the data compiled by the New York Times for the other figures. In every case, I used the highest possible figures for the final cost of each program, to make my estimates as conservative as possible. (I stayed away from TARP, even though we're told it's making a profit, because the total cost is still unknown.)
The result was clear: This GOP's planned Wall Street giveaway was the biggest and costliest of all the programs listed.
Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future. This post was produced as part of the Curbing Wall Street project. Richard also blogs at A Night Light.
He can be reached at "rjeskow@ourfuture.org."
Website: Eskow and Associates
The Fox <b>News</b> “Lawn Jockey” and The Tolerant Left | RedState
Juan Williams' firing did not happen in a vacuum. It happened in the context of him having been the official Fox News lawn jockey stooge for years.
Energy and Global Warming <b>News</b> for October 22nd: Five renewable <b>...</b>
Polls, including the one from Wall Street Journal/NBC News released Wednesday, have shown that some voters are disenchanted with the Democrats and many voters remain undecided. Speaking at the Solar Power International (SPI) conference ...
Nuclear submarine runs aground off Skye | Scotland | STV <b>News</b>
Royal Navy submarine HMS Astute stranded after accident near Skye Bridge.
eric seiger eric seiger
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