Google faces possible Ferrari factor

[denoir 0]

Found this article interesting:

Google faces possible Ferrari factor [bBC]

Quote[/b] ]

Google, the world's most popular internet search engine, is cruising towards a lesser-known, but very possible business problem - the "all your staff suddenly drive a Ferrari" factor.

As the Californian company prepares to float on New York's Nasdaq market, in an initial public offering that will value the firm at as much as $36.3bn (Å19.7bn), hundreds of the company's 2,292 staff will suddenly find they are, at least on paper, millionaires.

Some 30 million shares have been assigned to the company's workers - something that has already got the company into a little potential trouble with regulators.

But the bigger question for Google is whether the new found super-wealth of all its employees with generous stock options will affect their work ethic.

Will they all continue to work diligently, or will they instead rush out and buy Ferraris and other sports cars to spend more time racing around the north Californian hills?

Google, which is famed for having a down to earth and even quirky working environment (staff are encouraged to play hockey or musical instruments in their lunch breaks), appears at first hand not to have too much to worry about.

But then, extreme and overnight wealth can do strange things to people. Much like a lottery jackpot winner who always said it would never change his or her life, only to start spending like a madman when the six numbers come in.

Staff exodus?

"Sudden wealth is a huge management challenge and big distraction," says Thomas Taulli, a lecturer at the University of Southern California's Marshall School of Business.

"Even people who are hard workers and dedicated employees will suddenly spend all hours of their life looking at the stock ticker, seeing where the stock price is."

Karen Goodfriend, a US financial adviser who specialises in assisting "suddenly wealthy" individuals, says the Google staff should brace themselves for deep and unpredictable psychological changes.

In addition to those employees who may see their work rate lessen, Google could also see some staff decide to quit. Both those that want to swap for a life of leisure, and those that want to set up their own companies and potential future rivals.

Ambitious plans

Google itself has already admitted that this might be a problem."If any members of our senior management team leave the company, our ability to successfully operate our business could be impaired," it said.

"We also may have to incur significant costs in identifying, hiring, training and retaining replacements for departing employees."

Still, with the float intending to raise $3.3bn, Google will certainly be able to afford the training fees.

Another possible issue for the company is whether its planned expansion into possibly everything from email accounts to picture editing services, and music and video downloads will cause it to over-extend itself and drop its eye from its key business - being an internet search engine.

Still way ahead

Google's search engine rivals also have determined plans to try and catch up.

Microsoft, for example, recently introduced a news service to rival Google's, and Yahoo has ditched Google technology for its own newly-developed software.

Yet Michael Vassallo, research analyst at Brewin Dolphin in the UK, says Google is currently so far ahead of its competitors, it can afford for a few of the planned new products to fail.

"Google is by far the easiest search engine to use and can make some of its competitors appear rather old fashioned," he says.

"It doesn't need the money from the flotation, but it has some new ideas to check out and the cash will be good for research purposes.

"Who knows whether it will be any good at its planned new developments, and whether some of its staff will want to go off and do something less commercial instead?

"But whatever happens, I can't see anyone coming close to Google, everyone uses it and it is so far ahead."

Even with a future car park full of Ferraris, Google currently looks unstoppable.

[bn880 5]

Well what can I say, Google is the Ferrari of the Internet. (or is that a bycicle?)

[DracoPaladore 0]

Where does Google get this money anyway? They're a search engine.

[EiZei 0]

Where does Google get this money anyway? They're a search engine.

Are you blind or dont you see the adverts?

[DracoPaladore 0]

Nope, no ads. Not even in news section

[EiZei 0]

Nope, no ads. Not even in news section

Ever bothered to search for phrases like radeon 9800?

[denoir 0]

Ads on the right side.

[DracoPaladore 0]

Hey, never noticed those before. Guess I never look in that direction anyways.

[denoir 0]

That's not however how they got the shitload of money now. They are getting it because they're selling off IIRC 30% of the company as shares.

[SpeedyDonkey 0]

Yes, but the ads have generated a nice income as well.

Btw, you guys should be using firefox (screenshot) 

[DracoPaladore 0]

Opera's fine for me. Keeps things in one, nice, efficent box and dosn't whore up my bar.

[SpeedyDonkey 0]

You have "tabs" in Firefox as well  

Opera - The built in ads = Firefox

[Milkman 1]

So they make a shitload of money on text adverts that barely anyone notices? Gotta love capitalism!

[Tovarish 0]

You hardly notice the adverts on gmail as well, and that with a free gig of storage .

[ralphwiggum 6]

IIRC, google is financially secure, even right now. they were making money before IPO was planned.

I'm betting that just like MS there will be some exodus of company employees.