186 karma · joined February 22, 2007
As a side note, this is really bad for lower income individuals and families. A larger percentage of their income goes towards food and energy than a higher income individual/family. Not only are a lot of them dealing with mortgage issues and tighter credit availability - now they need to deal with this.
"Revenues from outside of the United States totaled $2.32 billion, representing 48% of total revenues in the fourth quarter of 2007, compared to 44% in the fourth quarter of 2006 and 48% in the third quarter of 2007. Had foreign exchange rates remained constant from the third quarter of 2007 through the fourth quarter of 2007, our revenues in the fourth quarter of 2007 would have been $94 million lower. Had foreign exchange rates remained constant from the fourth quarter of 2006 through the fourth quarter of 2007, our revenues in the fourth quarter of 2007 would have been $195 million lower." http://investor.google.com/releases/2007Q4.html
So Google basically brings in a little less than half of their revenues from outside of the US.
Now those were their Q4 results - since then the dollar has depreciated ~4% lower against a basket of currencies (http://quotes.ino.com/chart/?s=NYBOT_dx)
So basically, we can see that Google is basically an exporter of ads, and it's becoming cheaper for foreigners to buy those ads due to the depreciating dollar.
Now, looking at the global picture, things are looking pretty bad in general. Looking at the OECD's Composite Leading Indicator report from March 7th (http://www.oecd.org/dataoecd/58/47/40240353.pdf) you can see that there is pretty much a global slow down effect going down in some of the world's major economies (with Brazil and Russia as the exceptions).
So it seems like any company that has international exposure to ads might actually have a slow down hedged by the depreciation of the dollar.
For those here who are bringing in money through ads, how much international exposure do you have? Do you see it being worth it to try to get into the international markets in an attempt to take advantage of the weaker dollar?
Also, has the "Google acquisition engine" slowed down at all? They don't seem to have bought anything since October - http://en.wikipedia.org/wiki/List_of_Google_acquisitions
You'll probably work part time ~1-3 months until they really start to pressure you to go full time (assuming they like you). This is NOT fun.
At that point you need to decide to go full time or peace out. They are not sustainable, especially when you are part of a team and the rest of the team is working full time, and they're getting all frustrated that so and so is out today because he's part time.
I would just save up and then work full time on your idea(s). Figure out your monthly expenses, figure out how many months you can go, etc. There's nothing more focusing than knowing you're losing $x a day out of your savings account by just not working - the Cortez approach, I suppose.
Caveat: This is, of course, my experience. Take it with a grain of salt.
That same lesson could be learned in the same time frame in a start up - you'd just end up with some throw away code after a pretty short period of time, which isn't a big deal at all when it comes down to it.
My point being this model is well hashed out. It is really only a matter of time until Apple jumps on this. In terms of the hardware pricing, they'll probably set up some kind of a subscription service pricing model (as that is the existing model) and then derive pricing on hardware based on that, if they go that route. But subscription based is the simplest to market and understand.
I don't know how I'd feel if he was being deliberately misleading. He is still a CEO of a large publicly traded company...and should be somewhat upfront about what they're up to. I mean to hide is one thing, but to deliberately mislead?
Yet just as with the iPhone SDK, where he initially did not want third party developers writing applications on it, he listened to the demands of the market. Yeah, he's still being a little up tight about iPhone App registration...but I guess my point is the man makes an initial guess of what's best for the company, but then listens to the market in the end, as he should.
Exciting stuff though. I'm psyched.
Related to that, the historical US National Bank (http://en.wikipedia.org/wiki/First_Bank_of_the_United_States) and Central Bank (Federal Reserve) have very different objectives. Do not confuse the two.
In terms of the Fed wanting to promote the economy and "make money" for the government...not so much. The Fed as an organization is set up to operate independently, and in the long run the government is going to lose more money due to economic fluctuations. The whole point of a central bank is to smooth out the business cycles (to everyone's benefit).
Projected to be less tomorrow? Says who? I would think that JP Morgan would not accept even a $2/share buy out if they thought it would be worth less tomorrow. They would only make such an offer if they thought it was a good deal to them with a potential upside. Thus they are willing to buy a "illiquid" asset and provide "liquidity" for "value" to themselves. It's how the world goes 'round. Illiquid and crappy may be the same thing now, yes, but investment is, by definition, making decisions for future profit. This is why, in terms of net present value, crappy and illiquid are not the same thing. JP Morgan is thinking "This is a great opportunity".
In terms to my reference to LTCM as being hardly reassuring: get over it. We are in a credit crunch. We were in '98, we are now. It's bad, yes. This is probably worse than LTCM. I never said this was good, I said that 'illiquid' and 'crappy' are not by definition the same thing. That's all I said.
I'm not even going to address your Buick analogy. Read this book - http://www.amazon.com/When-Genius-Failed-Long-Term-Managemen... - it will give you a good idea how credit markets operate and how they can act irrationally.
Right now the major issue is that no one knows how to value themselves because no one else knows how to value themselves because no one can value their portfolios. And in that uncertainty no one can judge who is right and wrong, who is getting a good deal and getting a bad deal. This is exactly why this situation is so screwed up. And this is exactly why the Fed is offering to provide liquidity for the rest of the market: because no one else is liquid enough to. Yes, it is a moral hazard, it sucks, but it is how it is.
Look, this isn't a zero sum game. For all we know, inaction by the Fed could lead us down a more damaging path. There are smart people working there, with far more education and experience than both of us and then some. Let us not be so quick to judge.
"Ironically, after the bail-out by the other investors, the panic abated, and the positions formerly held by LTCM were eventually liquidated at a small profit to the bailers." http://en.wikipedia.org/wiki/Long_term_capital_management
This is so true - the Japanese mortgage downfall of the 1990's was only made worse by the fact that the banks did not purge their loses and move on (with the government only making matters worse by helping them hide it), effectively prolonging their recession.
Right now the Fed is pumping so much money into the economy, and a lot of it is, ironically, going into commodities due to fears of inflation (oil, metals, etc) driving up prices even more - shooting ourselves in the foot, effectively.
I'm really curious about the impact on software/technology though still - does anyone see this seeping into their various sectors of technology they work/have companies in? There was a WSJ article talking about how programmers were doing an effective "flight to quality" in terms of jobs (moving to big companies in preparation of a recession). Any more observations?
Engineers solve problems. Understanding physics is a means to solving some problems. That's it.
"The application of scientific and mathematical principles to practical ends such as the design, manufacture, and operation of efficient and economical structures, machines, processes, and systems." http://www.thefreedictionary.com/engineering
iTunes Radio: Electronic->AH.FM, Ambient->Drone Zone on SomaFM
Well, you need to really look at what sectors of the economy have lost the jobs - mostly retail, manufacturing and construction - so if you're looking to start a technology company, you might be out of luck with this newly freed labor pool.
The thing is these things work their way through sectors of the economy. It's hit banking, housing and construction/related so far pretty hard - it hasn't quite gotten to technology though. Or has it? Anyone have any thoughts?
But I agree, there is always room for improvement. Most dev cycles are based on milestones that have a quantified completion point, and that's when things are "done". Otherwise we'd never get anything "done". We change the language. ;)
It's just that every basket of tasks that compose a Milestone (bug fixes, UI enhancements, etc) has a statistical break down of things that tend to be really easy --> really hard. Being that a certain % of tasks on average will be really hard (say ~10%), you end up spending ~90% of your time on those ~10% of tasks. So even when you quantify things down to a completion point, you still see this (perceptionally) diminishing return on labor invested phenomenon.
Just think about coding looking unto the beach with a cup of tea. Living the dream.
I guess I'm thinking of what is called "Net Present Value"...which basically factors in short term losses for long term gains. Which kind of is what you're saying with "value creation" I guess.
In which case, yes, they decided to give away Google Search for free (as well as GMail) because they saw future revenue streams in another area.
My point is calling it "free" is BS in terms of NPV - which business decisions are all about, which valuation is all about, etc.
That and the real point of education is to learn how to learn and think. View it as a mental workout if you truly do tell yourself "this is pointless, I am never going to need to know this". Remember that it will only make you stronger in the end.
Not quite there yet, but that's the direction we're heading in with more providers jumping into the field. Exciting stuff.
No one economist is ever going to get this right because economics is more like weather forecasting than anything. You're better looking at "surveys of economists" you can find in many publications to get an idea of what economists on aggregate think. The wisdom of crowds, anyone?
The episode on "Emergence" will be of interest to people here as it pertains to wisdom of crowds/group think/etc. All together an amazing radio series.
Note that they also have seasons 2 - http://www.wnyc.org/shows/radiolab/season2_2006.html and season 3 - http://www.wnyc.org/shows/radiolab/upcoming.html
How do you think he implements his "models"? I was thinking of using a glorified General Problem Solver to list our possible operations (elect this person, elect that person, do this, do that) in order to reach an end goal, the equilibrium. Maybe? Ideas?