Google Takes Stricter Approach to Costs →

Alastair Barr on why Google is planning more 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 managed to deversify much of it’s 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 clearly the future. With that said, the fact that they are far from being able to monetize them plus the sheer amount of these moonshot type project makes them look unfocused. Pressure from investors was bound to happen as growth has started to slide.