You're right: The long bond is less, so what are they invested in? "Marketable securities" with 3% yield means that they have something not AAA (which probably makes sense on such a large cash hoard) but there will come a day when interest rates go up. That will cause the value of their bonds to drop substantially.

Hell, I'd like 3% on my money.

True. But consider Google's effective inflation rate. A lot of things they care about - say, Palo Alto real estate - are getting more expensive faster than 3 percent. That money is losing value. Spending on acquisitions or otherwise investing in the business should yield a far better return.