Google CFO Patrick Pichette dispelled criticisms about lackluster revenue and increasing spending, claiming the company is still a start-up and needs to expand, as it focuses on long-term growth.
Speaking at Fortune’s Brainstorm conference, Pichette addressed naysayers who suggest Google needs to produce more revenue from products like Android, Chrome or Google+ need to calm down. He also said criticisms of Google’s considerable operating expenses is justified as investments for the long-term.
“Everybody’s all nervous about the fact that it’s been 36 months since the Android launch and you only have search,” Pichette said. “Just relax.”
Pichette reminded them Google is selling 550,000 devices a day, and said the company is focusing on the opportunities that kind of volume can bring, a new attitude at the company since Larry Page took over CEO responsibilities from Eric Schmidt earlier this year.
Google isn’t concerned the new products have yet to generate revenue, and instead looks at the long-term in these endeavors, according to Pichette.
“That’s not the way Google thinks. It’s not the way Larry thinks or Eric thinks,” Pichette said. “We don’t have an obsessive mind set of the next 30 days.”
Characterizing the company as a big dreamer wanting to change the world may be accurate, but the reality of the company’s heft and girth resembles anything but a nimble newcomer.
The company increased its operating expenses to 49 percent last quarter over last year, a move that does not exactly generate a lean “startup” image. Google has a $194 billion market cap, most recently launched a new social network to rival Facebook, and picks up the tab for the 300 routes its shuttle buses that take the 28,000 employees, who received a 10 percent pay increase across the board, to their jobs.
Still, no matter how it sees itself and how it functions, Pichette stressed that down the road, non-search Android revenue will stream in when mobile payment option Google Wallet and daily deals with Google Offers begin to take off.
Google is racing to get its Google Wallet and Offers programs popping in increasingly crowded marketplaces. Google’s mobile payment product is set to compete with PayPal, Square and AT&T, Verizon and T-Mobile’s “Isis” mobile payment network, in what is expected to be an industry worth $670 billion by 2012.
In addition, the search giant is making somewhat of a late arrival to the daily deal scene. Google launched its Offers program earlier this summer, under the large shadow of industry innovator Groupon.
With a range of endeavors to both build upon and diversify Google beyond its search engine business, the company’s image of itself as a startup may help keep it energized despite the many challenges and rivals. But the spate of lawsuits targeting its flagship Android OS as well as rising antitrust action indicate the tech industry does not see the company as a young upstart but a giant in its field, with the power to shape the market in significant ways. What view wins out may impact the company’s future and direction.
Nevertheless, according to Pichette, things are clicking along for Google, and the company is assuming the mode of “What, me, worry?”