Google Makes So Much Money, It Never Had to Worry About Financial Discipline • Hacker News Board

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#101

Post by SomeStupidPoint » Thu, Dec 08, 2016, 6:46 PM UTC

gph wrote: post #18

mahyarm wrote: post #7

Earlier quoted context omitted.

A lot of that stuff although is cheaper for the corporation to provide than for the employee to pay for themselves in money and time. The corp has a tax advantage and a bulk purchase advantage. Not having a payment infra probably adds a little bit of efficiency too.

Which does seem like sort of a loophole. Don't companies have to add perks over a certain amount to the employees pay so that it gets taxed? Wouldn't feeding an employee every day qualify? It would be sort of weird if we turn back into having sort of 'company towns' where your employer provides a lot of what you need except they pay for it. It's not just Google this would be beneficial for, even if you run a factory…

The benefits must be provided for a business reason to not be taxed (to the employee as income).

I expect that it's a mix of two things:

1. You can make a case that keeping them in the office (rather than making trips out) is a business need, and it might hold up to scrutiny. This probably covers things like coffee, juice, snacks, etc. The company legitimately does benefit from (some key) employees not constantly leaving the office for small necessities.

2. There's a lot of low-level tax fraud the IRS is too understaffed to deal with (and is directed away from corporate fraud like that, anyway). So you probably are supposed to report the value of the meals you get, but no one tracks it, and each employee is only committing a small error, so the IRS can't justify dealing with every case.

The IRS actually has a great PDF on when giving an employee a free meal is a taxable benefit or not. (I found it a couple years back when starting a small corp, but can't seem to find it now.)

Ed:

According to this document [1], Google providing meals probably falls under a nontaxable status because they provide them on campus and there isn't a lot of food near the campus. (Section starts on page 43.)

[1] https://www.irs.gov/pub/irs-pdf/p5137.pdf

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#102

Post by findjashua » Thu, Dec 08, 2016, 6:47 PM UTC

inopinatus wrote: post #44

furyofantares wrote: post #22

Earlier quoted context omitted.

> Google doesn't do what it does to be successful. It does it because it is successful. Those things aren't mutually exclusive and almost certainly are both true

The most pointed quote in the article is “No one wants to face the reality that this is an advertising company with a bunch of hobbies.” But without search, without Gmail, without Chrome, without Android, without the moonshots and all the "hobbies" Google's brand would wither, and its access to data at massive scale would be crippled, and its access to eyeballs would be curtailed, and the talent would walk. Others ha…

"But without search, without Gmail, without Chrome, without Android, without the moonshots and all the "hobbies" Google's brand would wither"

I'd argue it's less about branding, and more about creating an ecosystem.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#103

Post by brightball » Thu, Dec 08, 2016, 6:47 PM UTC

gph wrote: post #18

mahyarm wrote: post #7

Earlier quoted context omitted.

A lot of that stuff although is cheaper for the corporation to provide than for the employee to pay for themselves in money and time. The corp has a tax advantage and a bulk purchase advantage. Not having a payment infra probably adds a little bit of efficiency too.

Which does seem like sort of a loophole. Don't companies have to add perks over a certain amount to the employees pay so that it gets taxed? Wouldn't feeding an employee every day qualify? It would be sort of weird if we turn back into having sort of 'company towns' where your employer provides a lot of what you need except they pay for it. It's not just Google this would be beneficial for, even if you run a factory…

A lot of factories used to work like that if I recall.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#104

Post by gph » Thu, Dec 08, 2016, 6:48 PM UTC

quotemstr wrote: post #93

gph wrote: post #67

Earlier quoted context omitted.

Interesting, even if you give them the lunches it would be a huge stretch to say a fitness center and massages benefit the company. Sounds like a rule that is hard to impossible for the IRS to enforce. I hate rules like that, we ought to create a better rule or get rid of it altogether. Because I'm guessing if a factory lowered their wages while providing the same perks as google the IRS would probably say something.

> a fitness center You'd be amazed how much exercise helps with concentration and reduces stress.

Yea I get that, but you can extend that logic to just about every domain of life. Should they be allowed to buy all their employees the best mattresses available because a good night's sleep helps productivity? Should they pay for a nanny because help with child care makes you more productive?

With that logic you could fund your employees entire lifestyle if you made the case that it helps them be more productive.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#105

Post by yuhong » Thu, Dec 08, 2016, 6:50 PM UTC

ocdtrekkie wrote: post #96

bzbarsky wrote: post #89

Earlier quoted context omitted.

And the people who ended up with Chrome installed and set as their default browser because they installed some other application (like Flash) were using Chrome willingly, right? Yes, Google was doing that sort of thing for Chrome distribution for a while. They've stopped since, which is better than nothing, I guess. [Edit: apparently they haven't stopped, according to ocdtrekkie's comment! Or maybe they have started…

They still do it: https://get.adobe.com/reader/ (Checked today, Windows 10, while using Edge. Default checked on this page is to also install Chrome.) It's worth noting that Sundar Pichai's claim to fame at Google, prior to Chrome itself, was getting the Google Toolbar installed on everyone's PCs whether they wanted it or not. The CEO of Google isn't just a fan of software installation dark patterns like this, he's t…

Google Toolbar was one of the better browser toolbars AFAIK though.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#106

Post by nostrademons » Thu, Dec 08, 2016, 6:51 PM UTC

vkou wrote: post #56

Periodic wrote: post #40

Earlier quoted context omitted.

I tried to clarify the wording. I'm specifically trying to call out the structure of Google's management and the general way they approach problems. For example, even within the profitable Google portion of the business, they often have many competing projects. There will be competing search features, competing chat applications, competing cloud services. Google will make big speculative bets or internally competitiv…

Yet, free markets beat out top-down managed economies because they have competing teams seeking to provide the same services. Tech is, to an extent, a winner-takes-all market. If you build out two competing products internally, in the long run, it will cost you less then building one product, and having an outside competitor fight you for market share, by building that second product. Case in point: I'm sure that Fac…

For most companies, having two competing products internally does not also prevent you from having two competing products externally. There's no law preventing an outsider from starting a competitor just because you've already got two alternatives.

Whatsapp is a great example - Facebook already had Facebook Messenger, and Facebook Chat, internally. Google had GChat and Hangouts and whatever else they're working on these days. It didn't prevent the outside company with half a dozen employees from eating their lunch.

The parent's point is that because of their core markets in search & social networking, Google and Facebook have the luxury of no major competitors, and so they can afford the internal competition to advance the state of these markets. The market structure came first, not the corporate structure. And if you try that in a market with few barriers to entry (like mobile chat, before everyone had built their network effects), it's just as likely that a competitor outside the company will eat the market, not one inside the company. Probably more likely, since internal projects are hamstrung by things like executive approvals, PR worries, and potential legal issues while startups can just take their product to market and see where the market takes it.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#107

Post by ronald_raygun » Thu, Dec 08, 2016, 6:53 PM UTC

bad_user wrote: post #79

inopinatus wrote: post #44

Earlier quoted context omitted.

The most pointed quote in the article is “No one wants to face the reality that this is an advertising company with a bunch of hobbies.” But without search, without Gmail, without Chrome, without Android, without the moonshots and all the "hobbies" Google's brand would wither, and its access to data at massive scale would be crippled, and its access to eyeballs would be curtailed, and the talent would walk. Others ha…

All of Google's products are complementary products that create lock-in. For instance both Chrome and Android have been created with the purpose of controlling the underlying platform that people use, in order for them to not be at the mercy of the other platform owners, like Apple or Microsoft. And it worked. This is very obvious to anybody with an interest in how microeconomics works. For example this is why open s…

A good blog post on what youre talking about

https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#108

Post by rqebmm » Thu, Dec 08, 2016, 6:56 PM UTC

matwood wrote: post #68

Periodic wrote: post #11

So many companies try to emulate how Google works. There are multiple books, hundreds or thousands of articles. People speculate on the perks, the review structure, the hierarchy, the autonomy. However, when other companies try to imitate Google they always fail because they're missing a crucial piece: Billions of dollars in ad revenue Google doesn't work the way it does to be successful. It works that way because it…

Reminds me of Valve's no manager management style: https://www.bloomberg.com/news/articles/2012-04-27/why-there... When you have a lot of money, a lot of things work because you have a lot of money. You often see the same thing with people trying to emulate pro-athletes training methods. A genetically gifted pro-athlete can often succeed in spite of their training, and not necessarily because of their training.

Valve also has the prestige of being a high-profile gaming company, which brings with it choice pick of engineers. A "normal" enterprise app consulting shop doesn't have the luxury of every computer geek clamoring to work there.

If you have first-pick of incoming talent, it makes sense that you can get away with giving those employees an extremely high degree of autonomy.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#109

Post by yuhong » Thu, Dec 08, 2016, 6:57 PM UTC

ocdtrekkie wrote: post #62

sp332 wrote: post #48

Earlier quoted context omitted.

I think it's medical/clinical. https://en.wikipedia.org/wiki/Informed_consent "Express permission" is also a little jargony but I think it avoids the problem you mentioned?

I'm not sure "express permission" indicates that you are aware of the full extent of that permission, merely that you were explicitly asked for it and you agreed to it. To answer the parent, I wasn't trying to say everyone who knows what Google does with their data would not actually consent. There are people who argue that "privacy is over" and that it's entirely okay for Google to know everything about them. Most G…

"Most Googlers fall into that category"?

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#110

Post by MicroBerto » Thu, Dec 08, 2016, 6:57 PM UTC

espadrine wrote: post #37

Contrast Google's old way of managing bets with Tesla. When Google started working on self-driving cars, they went about it academically. They did not plan a sequence of stepping stones that they could sell. They meant to have a product in an indeterminate future which should be immediately perfect and better than a human, essentially not needing a wheel. Tesla went about it with an engineering perspective. First, ca…

> but they make money along the way

Only killing a few people in the process, but hey who am I to judge?