Alastair Barr on why Google is planning stricter cost cutting over the next few quarters:
Google revenue grew 19% in 2014, down from 21% in 2013, 22% in 2012 and 29% in 2011. But operating expenses grew 31% last year, according to S&P Capital IQ; spending on research and development soared 38%.The result: operating-profit margin declined to 32%, from 38% in 2011, according to Goldman Sachs.
The company has matured and still relies on a single product for the overwhelming majority of its revenue. In contrast, Apple has diversified much of its revenue – even though much of its growth is still tied to iPhone.
Initiatives like Google Glass, Project Loon, Google Fiber, robotics, and self-driving cars are the future. With that said, they are far from being able to monetize them, plus the sheer amount of these moonshot-type projects makes them look unfocused. Pressure from investors was bound to happen as growth started to slide.