Google’s Keeping Secrets


Chris Gaither of the LA Times looks at the wall of secrecy Google often hides behind. If you watched the live video feed during the Google Press Day, you would have seen Chris ask CEO Eric Schmidt about why Google is not more transparent with the way it makes money.

Wall Street knows how many iPods and computers Apple Computer Inc. ships, how many items EBay Inc. lists for auction and how many vehicles Ford Motor Co. sells because the companies disclose that information.

Google, in contrast, discloses only basic financial information, such as its profit, expenses and balance sheet.

Google has many closely guarded secrets, from the number of servers it uses, to the amount of commission it pays Adsense partners. Schmidt claims that sharing information with the public would do more harm than good.

The Google system is such “a complex box,” Schmidt said, that when he wants an update, “I have to have a one-hour meeting with the physicists to get it all right.”

If Google were to start releasing specific data, he said, the company’s market valuation could swing by billions of dollars in a single day because investors don’t understand how those metrics fit into the big picture.

Some analysts are’nt buying it…

“That’s hogwash,” said Rohan, the RBC analyst. “Google doesn’t have to give away trade secrets to make the company a little bit more transparent.”

So what might happen if Google decides to keep the curtain up at the Oz’plex?

Google “is the big kid in the schoolyard,” said Andy Beal, chief executive of Fortune Interactive, an online marketing firm that works with Google and other search engines. “It makes the rules, and it reserves the right to change the rules. But there’s only so long it can continue to do that before the other kids say, ‘We’re not going to play with them anymore.’ ”
;-)