Google may spend money lavishly, increasing its operating expenses 49% last quarter over the year before. But Patrick Pichette, the man who governs Google's spending as its chief financial officer, says the search giant is actually frugal, reports The New York Times. "I think people have a misconception about Google in general on that topic," Mr. Pichette said Wednesday at the Fortune Brainstorm Tech conference in Aspen. "Google is a very responsible company. It's a generous company but it's very frugal in many ways."
Revenue from Google's core search business continues to soar, but what about revenue from its newest businesses, like Chrome and Android, both of which Google gives away?
"The questions that are asked so much are short-termish, and are not the way Google thinks," Mr. Pichette said.
Like Android, Chrome OS also encourages people to use Google's services more often. "People search more when they use the Chrome browser or Android phones, which increases Google's core business," says Pichette. Android will also offer additional revenue opportunities. "Nonsearch revenue will eventually arrive for Android as it combines Google Maps, mobile payments with Google Wallet and daily deals with Google Offers."
When we've products that get resounding user and consumer success and that are growing in the hundreds of millions we don't worry. The only question is when and how'll we monetize. Everybody's all nervous about the fact it's been 36 months since Android has launched and you only have search (revenue). That's the criticism I hear. The questions that are asked are so short-termish. That's just not the way that Google thinks.
Pichette mentioned, "Google is making some money from companies buying computers that run the Chrome operating system." Google came up with an innovative subscription model for businesses and schools. Instead of paying for the hardware, organizations can pay $20-$33/device/month and get a notebook, enterprise support, new devices every 3 years or even more often, a Web-based central management console, integration with Google Apps. While enterprise Chromebooks are a lot more expensive than the regular Chromebooks available at Amazon or Best Buy, Google says that the total cost of ownership of a notebook can be reduced by up to 70%. "Chromebooks and the management console automate or eliminate many common, time-intensive IT tasks like machine image creation, application distribution, patching, and upgrades. Additionally, there is no need to purchase licenses for anti-virus, data encryption or data back-up software."