What Will Google Do With $42.6 Billion War Chest?
When Google announced Q3 financial results today, most folks noted Google’s quarterly revenues surged 33 percent and nearly hit $10 billion. But perhaps the more interesting figure is $42.6 billion; that’s how much cash Google now has in the bank. Talkin’ Cloud wonders: Will Google CEO Larry Page open the vault and send Google out on a cloud services shopping spree?
In a simple, direct statement, Google stated: “We expect to continue to make significant capital expenditures.” Translation: The expensive build-out of Google’s data centers continues. Indeed, Google spent $680 million on IT infrastructure investments, data centers, services, networking equipment and other capital expenditures in Q3. Google also snapped up Motorola Mobility for $12.5 billion back in August 2011. That move aims to “supercharge” Android.
Google has also invested heavily in people. The company added nearly 2,600 workers in the third quarter to end September with more than 31,500 employees, according to SeekingAlpha. Google has hired nearly 7,000 employees since the end of last year, SeekingAlpha added.
Among the big growth areas for Google: Mobile. During the earnings call, Page said:
“We’re also seeing a huge positive revenue impact from Mobile, we jus grown 2.5x in the last 12 months to a run rate of over $2.5 billion. Generally, I found that high usage products will make a lot of money over time for well-managed technology companies, and that’s why it’s so important to run these businesses for the long term.”
Still, the vast majority of Google’s business involves Google Sites Revenues (69 percent) and Google Network Revenues (27 percent). The other 4 percent of revenues come from cloud services like Google Apps, among other niches.
But back to the headline: How will Google potentially spend its $42.6 billion war chest. Among the potential bets:
- Buy more patents.
- Buy more social media and mobile technologies.
- Build more datacenters worldwide.
- Build more cloud software for mobile devices.
- Close up shop and retire (not likely).