Google's Secret Weapon
Google needs no introduction. They are the information leader in the information age. They have effectively monetized information. In the future companies bid on words and the future is now. If you want to compete with them, good luck, their products are excellent and usually given to consumers for free.
So what is their secret weapon? People. Google has been rated the top company in the US to work for 4 years in a row. Their perks are well documented; above industry pay, free food, free haircuts, on site gym, being able to spend 20% on pet projects. At the end of 2010 all employees were surprised with a $1,000 bonus and a pay increase of at least 10%.
Big perks attract smart people. Smart people can do wonderful things. Boston Consulting Group has ranked Google the second most innovative company every year since 2006 (2nd to Apple). Don’t think of each person like a replaceable cog in a machine, think of each person as a possibility. A possibility to contribute to a team that creates disruptive technology. Android was released in late 08’and is now the #1 operating system of smart phones - a platform for future growth. What about offering internet at speeds up to 100 times faster than what many Americans have today? What about creating cars that drive themselves? Augmented reality glasses? Innovation isn’t almost over, it is just beginning.
There are currently 37,544 Googlers (ex Motorola). If you want to become one realize that you have a better chance being accepted to Harvard. A WSJ article cites a 1/130 Google applicant to hire ratio while Harvard has a 1/14 acceptance ratio. Last year Google added 1,426 employees while the incoming freshman class at Harvard admitted 2,076 students. They want the book smarts and the street smarts. Books have been written on how to ace the interview. By the way, if you were shrunken to the size of a nickel with the same mass, and thrown into a blender that was to start in 60 seconds, what would YOU do?
Where do the smartest people in finance work? Debatably a hedge fund or Goldman Sachs. The best scientists? Maybe NASA. The top people at math and computer science probably work at Google. That’s worth something! It is not all about talent but if you were coaching a sports team wouldn’t you want to coach the team with the best talent?
One of Google’s recent hires is futurist Ray Kurzweil. He graduated from MIT, he’s an engineer, inventor and writer. His past writings have described the future more accurately than anyone. Reading his visionary work truly opens the mind to possibilities. Einstein once said that, "imagination is more important than knowledge". Great! I am thrilled to put an imaginative person like Kurzweil together with such a talented team.
Why does this matter? Sometimes analysts get so into the weeds about the current events, “I am downgrading the stock because margins increased last quarter but at a slower rate”. These analysts miss the forest from the trees. A quick Google search (like that?) showed me that Google is the #1 most visited site on the net. Think about it. During the tech bubble everybody wanted to own anything .com because tech was going to change the world. Well Google did. They are the top site in the world, run by one of if not the most talented work force, and the stock isn’t even expensive.
Disclosure I am long Google & Apple.