Google CapEx Falls, Temporarily

6 thoughts on “Google CapEx Falls, Temporarily”

  1. I forgot to underline that I back the comment by Patrick Pichette. We could buy some very cost-effective servers today compared with earlier years. I doubt that Google infrastructure are lacking behind in hardware. (400-odd mio? Awesome!)

  2. I think this is an interesting point. The drop in capex could be a precursor to slower growth. I note that Yahoo had a significant drop in capex as a % of revenues during Terry Semel’s ill-fated cost cutting efforts back in 2004-2007.

    I’m not saying that Google will go the way of Yahoo, just that this might be indicative of management’s outlook for growth.

    I am dubious of the idea that Google is simply spending more efficiently. Amazon showed higher capex as a % of revenues over the last three years, for example, as they built out their EC2 and S3 initiatives.

  3. I’m no expert, but I assume this little blip in capital expenditure must be some accounting tactic for the sake of PR. Same thing the whores did in Unforgiven when they pricked their fingers with a little needle to get a couple drops of blood to blush their cheeks with. The girls needed to look pretty but resources were scant.

  4. Let’s not also forget that there are some huge economies of scale that GOOG can leverage. These past big CAPEX investments should now allow GOOG to leverage it for X growth.

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