# Google Takes Stricter Approach to Costs

Type: linked post (commentary on an external article)
Article: http://www.wsj.com/article_email/google-takes-stricter-approach-to-costs-1436827885-lMyQjAxMTE1NzEzMzQxNjMwWj
URL: https://www.jonathant.com/blog/google-takes-stricter-approach-to-costs/
Published: 2015-07-15
Updated: 2026-08-09
Author: Jonathan Tarud

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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.

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Source: http://www.wsj.com/article_email/google-takes-stricter-approach-to-costs-1436827885-lMyQjAxMTE1NzEzMzQxNjMwWj