This is the first of a series of posts that I’m planning to write regarding companies I’m curious about. The idea is to try to understand what a company is doing at present, how achieved the present results, and why. I’ll start with Google.
From Google finance I can read: Google Inc. is a global technology company focused on improving the ways people connect with information. The company generates revenue primarily by delivering online advertising. Following this focus Google achieved the present result: stock price of 677$, and a value of 221.45B$. Zooming the stock price to 10 years range, I can observe that today price is near to the historical maximum. The first stock price is dated 27 August 2004. Googling for the IPO date, I found that was exactly 8 years ago: 19 August 2004. Since then the company has done great steps forward. Google growth has been +525% vs +75% of the Nasdaq. To understand how these great results have been achieved we can analyze the history of the company. For the years up to 2008 is also available a corporate timeline.
A ratio that I found always very interesting when analysing companies is the net profit per employee. This is a simple number that gives a measure of the efficiency of a company. Often efficiency means happy employees and happiness have a lot of positive consequences in complex human architectures like big corporations.
To find this number I’ll dig on some of the latest documentation on the investor page. Some 2011 numbers from the financial tables are: revenue 37,905M$, net profit 9,737M$ (26%), and head count 32,467. This gives a sale per employee of 1.2M$, and net profit per employee of 0.3M$. In 2012 the Motorola acquisition will change this ratio, in particular considering that the total employees are now 54604. Comparing this numbers with other companies Google in 2011 still at the top for profitability per employee. Following a useful comparison provided by pingdom blog.
Now that I have an initial understanding of what Google is doing today, and how achieved these results, I can complement the analysis with some findings from the last annual report, and in particular the 2012 Update from the CEO. The phrases and words that attracted my attention after reading the first 40 pages are also giving an understanding of the why of the Google strategy:
- VELOCITY, EXECUTION AND FOCUS
- Sergey and I founded Google because we believed that building a great search experience would improve people’s lives and, hopefully, the world
- Approach life with the passion and soul of a start-up
- Excellence matters, and technology advances so fast that the potential for improvement is tremendous
- People are a crucial part of Google’s long-term success
- HAPPINESS IS A HEALTHY DISREGARD FOR THE IMPOSSIBLE
- Today the opportunities are greater than ever. Things we used to think were magic, we now take for granted
- I believe that by producing innovative technology products that touch people deeply, we will enable you to do truly amazing things that change the world
- Sergey and I share a profound belief in the potential for technology to improve people’s lives and we are enormously excited about what lies ahead
- Effortlessness: our design philosophy is to combine power with simplicity. We want to keep our look simple and clean, but behind the seemingly simple design, use technologies like HTML5, WebGL, and the latest, fastest browsers to make sure users have all the power of the web behind them
If Google key drivers are VELOCITY, EXECUTION AND FOCUS how you imagine search will be in 2020?