Saturday 25 June 2011
Sunday 19 June 2011
Tuesday 31 May 2011
Saturday 28 May 2011
Facebook, Google, or your Website: Which do you trust more?
May 19th, 2011
The month of May has turned out to be a doosey in the online privacy department, which got to me thinking: do people really care about their personal data being bandied about by the largest Internet companies in the world?
Earlier this month, top-five PR firm Burson-Marsteller initiated a campaign pitching major media outlets, such as USA Today, with a story that slammed Google and its privacy policies in regards to a new product they may be launching called Social Circles. The problem with the smear campaign is it was bought and paid for by the ethically challenged Facebook. If you’ve seen The Social Network, this lack of character should be no surprise at all. Just ask the Winklevoss twins.
So, why did Facebook do this? Because they are scared of Google. What company wouldn’t be? Regardless, Facebook looks like a bunch of clowns who can’t be trusted now. And trust, like the hokey pokey, is what it’s all about. While the story of Facebook secretly hiring this PR firm is pretty sensational, there could be some grains of truth to it. The problem is, it takes the privacy spotlight off of Google for the time being, which in my opinion, is not good.
I find it ironic that Internet users at-large are so concerned with “third-party cookies” and advertisers that track your ad views across websites but have no gumption about handing over their personal data from their Facebook profiles to Zynga so they can play Farmville. On the one hand, you have advertisers like DoubleClick (which was purchased by Google in 2007) who anonymously serve up ads across different websites and tailor those ads to you based on your behavior. On the other hand, you have Facebook, where you VOLUNTEER tons of personal information without thinking twice about it. So, what’s the big deal, you ask? When 500,000 Facebook users “may have had information leaked to advertisers,” it’s a big deal.
The privacy concerns have reached such a boiling point that we have legislation cruising through the House of Representatives called the “Do Not Track Me Online Act of 2011,” introduced in February by Rep. Jackie Speier. Last week, Rep. Edward J. Markey and Rep. Joe Barton , the co-chairmen of the bi-partisan Congressional Privacy Caucus, released the “Do Not Track Kids Act of 2011,” which would enact numerous protections for children and teens, including the requirement of parental consent to collect personal information. While I believe the intent of these bills are good, they raise some interesting concerns such as the ability for companies to implement systems that will actually comply with these proposed laws, should they get passed. For example, the DNT Kids Act would require site operators to ensure that they properly handle the data of any children who visit their sites rather than the individual data of a child who has registered with the site with their parents’ consent. Does this mean that all general websites that might get the occasional kid visitor will have to create an age verification process before you can even read a newspaper article, for example? I hope not.
As business owners and marketing folk, do we unwittingly sully our brands when we use trust-challenged social media outlets as the main communication channels with our clients and prospects? Not yet, perhaps. However, if these shenanigans (always wanted to use that word) by Facebook continue, be warned that your audience may flee your Company Page as fast as a bunch of college students abandoning MySpace. So, what are we to do? Never fear. The answer has been in front of us the whole time. It is called your website. Yes, your website. This is where you can create an information universe for your customers and prospects and all the rules that govern it. You have control and so do your users
20 Interesting Financial Facts About Google
One of the best ways to analyse a set of financial statements is to look at a public company’s 10-K. The 10-k is a mandatory annual filing for all public companies’ and provides a wealth of information about the business, operational and financial information about the entity. Google’s is particularly interesting, as most of us are intimately familiar with at least some of Google’s wide array of services, yet its business model is fairly simple and accessible. The bulk of its revenues are derived from advertising and its expense comprise primarily of amounts paid to adsense members, employee salaries and stock compensation and maintenance of its data centres. Whether you are considering Google as an investment or trying to glean some insight into how one of the world’s most successful companies’ operates, a review of their 10-k is interesting (it helps if you are a finance geek) and insightful reading. Below is a review and analysis of some financial facts and figures from their 2010 10-K.
EMPLOYEES
EMPLOYEES
- At December 31, 2010, Google had 24,400 full-time employees
- All of Google’s employees are also equityholders.
- Google invested $3.8 billion in research and development in 2010 and represents their largest indirect expense.
- The combined shareholdings of Larry Page, Sergey Brin and Eric Schmidt represented 67% of the voting power of the company at the end of 2010. This is achieved through their ownership in a different class of stock which provides for a greater number of votes.
- Google’s provides products and services in more than 100 languages to more than 50 countries. The US still accounts for the most significant portion of their business at 48%, while the UK accounts for about 11%.
- They note that Internet usage is much lower in the summer month, while highest internet usage is in the last quarter of the year.
- Their competition includes Facebook, Bing, Amazon,Ebay, Twitter, Monster, all types of advertising and providers of online products and services.
- Gross revenues from 2006 to 2010 were:
- Revenues have increased almost tenfold since 2004.
- Net income after taxes was $8.5billion, representing a 30% net profit margin.
- Approximately 96% of their revenues came from Advertising. This is essentially unchanged from previous years. This is an area of weakness from Google as any changes to the internet advertising market could have a significant impact on their revenues.
- Combined Income taxes expense, in various jurisdictions, totalled 21% of their net income.
- Cost of revenues i.e. the direct costs of sales included amounts paid to adsense members as well as operation of data centres and amounted to $10.4 Billion.
- Google held $34 billion in cash and marketable securities at the end of 2010
- They earned $346 million in investment income in 2010.
- As of December 31, 2010, $16.7 billion of the $35.0 billion of cash, cash equivalents, and marketable securities was held by foreign subsidiaries. Google notes that if these funds are needed for operations in the U.S., they would be required to accrue and pay U.S. taxes to repatriate these funds, although they do not expect to need the funds.
- Since Google is not an investment company, it should be noted that they appear to have an excessive amount of cash. Their net return in 2010 was approximately 1% of their ending cash balance, significantly and negatively affects their overall return.
- In December 2010, Google completed an acquisition of an office building in New York City for total cash consideration of $1.8 billion
- Major business acquisitions during 2010 included:
- During the year ended December 31, 2010, 44 other acquisitions for a total cash consideration of approximately $669 million were made.
- This is a strategy that has worked very well for Google in the past and is a good use of excess cash. It also represents their commitment to expanding their product and service offerings.
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