Google Production Costs
20 October 2006
2 Comments
This tidbit from the google quarterly earnings somehow stuck with me.
Other Cost of Revenues – Other cost of revenues, which is comprised primarily of data center operational expenses, as well as credit card processing charges, increased to $223 million, or 8% of revenues, in the third quarter of 2006, compared to $204 million, or 8% of revenues, in the second quarter.
So their raw production costs (which includes the the worlds largest datacenter) is 8% of revenues.
This kind of margin just goes to show you why other industries are in such trouble, particularly other traditional information and media industries. I wonder how those numbers would stack up to cost per revenue analysis of other major media companies with more capital intensive holdings. Clear Channel, the mega radio coporation, for example.
If that is so, I am wondering what on earth I am doing wrong. Duh! Why on earth do I have a chip on my shloulder about advertising? I need to refresh my thinking on revenue generating strategies.
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