Comments on: For Google, Capex Costs Are Worth the Money

By: For Facebook, Now Is the Time for Infrastructure Spending: Cloud Computing News «

Mon, 03 Jan 2011 23:25:45 +0000

[...] Om lamented upon hearing that Google was once again ramping up its infrastructure spending, Wall Street analysts have a tendency to wring their hands over such investments. Despite the fact [...]

By: doc-kit

doc-kit — Fri, 22 Oct 2010 08:27:41 +0000

Google is SO about infrastructure that they can just drop bombs like Maps, or Docs, or Instant Search – and everyone forgets what they were just excited about.

Yahoo is such a vaporous bag ‘oh’ stink.

By: brian

brian — Wed, 20 Oct 2010 17:30:27 +0000

Google’s going to be introducing Google TV.

They will need to add a lot of infrastructure to manage the video traffic and the storage of the content that they will be providing.

By: The iPhone’s Challenge to Open Source: Tech News «

The iPhone’s Challenge to Open Source: Tech News « — Tue, 19 Oct 2010 18:39:27 +0000

[...] isn’t actually new. Think of Google. As Om Malik has written, infrastructure is Google’s key competitive advantage. Guess what? That same infrastructure [...]

By: Hey Shareholders, Capex Means Cash in the Cloud!: Cloud «

Hey Shareholders, Capex Means Cash in the Cloud!: Cloud « — Fri, 15 Oct 2010 23:28:01 +0000

[...] Om’s post about Google’s soaring infrastructure spending got me thinking about the hypocrisy in the way we assess web companies’ decisions to splurge on [...]

By: Google Instant Coming to Mobiles & I Can’t Wait: Tech News «

Google Instant Coming to Mobiles & I Can’t Wait: Tech News « — Fri, 15 Oct 2010 22:32:55 +0000

[...] thinking about it from a mobile perspective. As I wrote on my earlier post about Google’s increased cap-ex spending: Google Instant in many ways is an evolution of a product to keep up with times – today’s [...]

By: SearchCap: The Day In Search, October 15, 2010

SearchCap: The Day In Search, October 15, 2010 — Fri, 15 Oct 2010 20:01:55 +0000

[...] For Google, Capex Costs are Worth The Money, gigaom.com [...]

By: Mike Lee

Mike Lee — Fri, 15 Oct 2010 18:40:42 +0000

I just realized your article on infrastructure as Google’s competitive advantage was written in 2007. Great insight back then.

I am impressed that Facebook managed to scale so quickly as well (with the occasional bump). Would you consider that ability a competitive advantage of Facebook as well? Or are infrastructure architects becoming more & more common, thus potentially removing the advantages of such an ability?

By: Derrick Harris

Derrick Harris — Fri, 15 Oct 2010 18:36:45 +0000

Spot-on analysis, IMHO. Some analysts questioned Amazon’s recent data center spending, too, despite AWS leading the cloud computing movement and seeing skyhigh demand.

By: modelportfolio2003

modelportfolio2003 — Fri, 15 Oct 2010 17:54:54 +0000

You have produced a very thoughtful piece on why cap ex growth is so important to Google. Analysts on Wall St are very short term oriented and if they do not worry about increased hiring numbers (Google hired 1500 this past quarter, as reported), they worry about anything else that will have a potentially adverse affect on margins growth. Google actually expanded EBITDA margins by 30 basis points quarter over quarter, despite the surge in cap ex you cite. That is no small achievement. With newer sources of income (display and mobile), the need for satisfying users need for speed and quality of result/targetted ad, etc, cap ex should continue to be a major differentiator with its competitors. As Google layers on more social and other services onto its existing product range, avoiding downtime yet spending money “frugally” (as the CFO says) will be a on-going challenge.