Your email address:

Powered by FeedBlitz

Or add to your news reader: Add to My Yahoo! Add to Google

Tuesday, December 23, 2008

Google (GOOG) replaces cash bonus with booby prizes

Gizmodo reports Google has replaced the $20,000 holiday cash bonus with unlocked T-Mobile Android phones. Employees are not permitted to resell the phones. The memo explaining the gift (bet they didn't have to include memos with the cash!) talks about how they need to conserve money in the present environment.

Google has really been clamping down on spending. I've noted a handful of items that highlight their frugal attitude. They act like they're having significant revenue visibility issues. Margins will clearly improve assuming revenues haven't already collapsed. Market share data doesn't suggest a significant change in Google's competitive positioning. Keyword pricing, though, has to be under a decent amount of pressure as every asset in the known world has come down significantly. Cost per click has been dropping for many of the e-commerce vendors, which would suggest lower net revenue for a company like Google that effectively sells clicks.

With all the cost controls Google seems to have in place, one would think they would have a decent upside surprise to operating margins. It's the top line that seems vulnerable.

1 comment:

Anonymous said...

The android phones did not replace the annual generaly-in-the-5-digits bonus, it replaced the previously-annual $1000 holiday bonus bonus.

Blog Archive