Monday, October 27, 2008

If Google Were a Person...

Someone mentioned to me today that Google's quarterly revenue is $5.5 billion.

That means the company makes a little under $42,000 per minute, before overhead, all day every day. At first this seems utterly stunning -- especially given the going salaries these days -- but how many AdWords clicks does it take to generate that money? If the average click costs $2, that's 21,000 clicks per minute. Of course that seems insane to most of us small-timers, but for the reach and reputation of Google it doesn't seem particularly impressive. Even if the average click is only $1, the 42,000 clicks required to get that revenue doesn't seem that overwhelming for the mighty giant.

The great part about this, from a business standpoint, is the ability to spend time working on high-value activities (HVAs) while the money-making end of things practically run themselves. For Google, this means they can spend time working on improving the process, improving the profitability and the long-term value of their business while AdWords chugs along. They can explore new possibilities for revenue streams; ones involving their existing technologies (Gmail, for example, shows you unobtrusive ads but hosts your e-mail for free) as well as completely new avenues.

Most companies simply don't have the luxury. Google's constant innovation is not really so surprising, since they have time to get to their non-urgent, important activities. The rest of us spend so much time putting out fires (our urgent, important activities) and making sure things run in the day-to-day that the small amount of time we have for improving the business as a whole takes a long time (forever, if we're unlucky) to manifest positive results. As the saying goes, you must work on your business to be truly successful. not just in it.

Here's the fun part: if Google were a person, working 50 weeks a year with 9 hour work days, they would make $9,777,777 an hour.

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