I should have taken Econ 101
Most of you know I'm a total news junkie, and because I'm not at my ideal job, I also follow economic news to try to figure out my prospects. Ultimately, however, I have no idea how the economy works, or I'm incredibly naive. I read this article a few minutes ago:
http://finance.yahoo.com/news/Googles-rapidly-rising-apf-1236173074.html?x=0
The cliffs notes version is that google's stock dropped because its expenses rose faster than analysts predicted. Makes sense, except it doesn't.
Google's revenue went up last quarter by 18%. Its quarterly revenue was $6.54 billion. Its expenses were $3.7 billion.
In other words, Google made about 3 billion smackers in the first quarter alone, and its stock dropped. The opening line of the article:
"Google is helping the economy and hurting its stock. The company is hiring so many employees for projects outside its thriving search advertising business that its expenses are growing much faster than its revenue."
Let me get this straight. According to economists, Google shouldn't go on a hiring "splurge" during a time of economic turmoil because it will affect short-term losses? Notwithstanding any help that Google is interested in providing for the economic recovery in general, a lot of talented people are out of work, so wouldn't it make sense to snap up that talent since Google clearly has the revenue to make long-term investments at $12 billion annually?
I think I'm starting to understand the appeal of socialism, finally. The House Budget Committee's recommendation for economic recovery and deficit reduction says to lower the corporate tax ceiling from 35% to 25%. I understand that lower taxes means more investment, but what the hell kind of sense does it make for a company to want to increase its revenue more than $12 billion annually? What the hell are you going to do with $12 billion? The GDP of Zimbabwe is less than $3.5 billion. Google could buy three countries in Africa with its annual revenue if it wanted.
I like the idea of being free to achieve a lot, especially when it comes to public good, but what the hell do you do with twelve billion dollars? I guess you could go on a hiring splurge and make a big dent in unemployment, but more people will want to invest in you if you just take all the money and put it in a sack instead.
http://finance.yahoo.com/news/Googles-rapidly-rising-apf-1236173074.html?x=0
The cliffs notes version is that google's stock dropped because its expenses rose faster than analysts predicted. Makes sense, except it doesn't.
Google's revenue went up last quarter by 18%. Its quarterly revenue was $6.54 billion. Its expenses were $3.7 billion.
In other words, Google made about 3 billion smackers in the first quarter alone, and its stock dropped. The opening line of the article:
"Google is helping the economy and hurting its stock. The company is hiring so many employees for projects outside its thriving search advertising business that its expenses are growing much faster than its revenue."
Let me get this straight. According to economists, Google shouldn't go on a hiring "splurge" during a time of economic turmoil because it will affect short-term losses? Notwithstanding any help that Google is interested in providing for the economic recovery in general, a lot of talented people are out of work, so wouldn't it make sense to snap up that talent since Google clearly has the revenue to make long-term investments at $12 billion annually?
I think I'm starting to understand the appeal of socialism, finally. The House Budget Committee's recommendation for economic recovery and deficit reduction says to lower the corporate tax ceiling from 35% to 25%. I understand that lower taxes means more investment, but what the hell kind of sense does it make for a company to want to increase its revenue more than $12 billion annually? What the hell are you going to do with $12 billion? The GDP of Zimbabwe is less than $3.5 billion. Google could buy three countries in Africa with its annual revenue if it wanted.
I like the idea of being free to achieve a lot, especially when it comes to public good, but what the hell do you do with twelve billion dollars? I guess you could go on a hiring splurge and make a big dent in unemployment, but more people will want to invest in you if you just take all the money and put it in a sack instead.