The Google Rainy Day Fund

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Almost as many suggestions exist on how Google could spend its $10 billion cash pile as there are dollars in that cash pile. CNNMoney asked of Google, “What kind of downpour do you expect?” A Google spokesperson offered a lengthy insight into the search advertising company’s plans

The Google Rainy Day Fund
Google Savin’ For A Rainy Day

… Well, actually, the company declined to comment.

Analysts cited in the report suggested several options for Google and that tempting string of zeroes trailing after a one. Buy small, interesting companies. Expand into social networking. Grab a travel company. Extend further into Asia. Acquire a cable or telecom company. Pay a dividend.

One might suggest the same list to Microsoft as well, except that it did start paying a dividend in recent years. Microsoft could represent one of those possible downpours, should its forthcoming adCenter service prove a competitive option to Google AdWords.

The most sensible suggestion in the article from Michael Cohen, director of research with Pacific American Securities, who thinks Google should stick to do what it does best: search.

“Here’s a company that has the ability to raise cash and do anything they want. But I think they’d be ill-served if they didn’t stick to their core strategy,” Cohen said.

But Google’s core strategy isn’t search; it’s search advertising. Google makes nothing from search. In fact, it pays Mozilla and Opera for having it as the default search in their browsers.

Search advertising, however, represents the near-total majority of Google’s revenue stream. The company does contextual ads very well. They need to do everything possible to ensure the click fraud issues it has faced, such as the Lane’s Gifts lawsuit where Google agreed to pay $90 million to settle claims, do not happen again.

The company should consider disclosing more information to its customers who find themselves banned from the search engine or its advertising programs. Google considers disclosing such details a threat to its proprietary algorithms and trade secrets.

But they have reached a point where Google the brand is synonymous with online search. Having details of being banned or dropped available contingent on agreeing to a non-disclosure agreement would at least mollify webmasters who find themselves ousted from Google.

Maybe Google could invest in offering a little more clarity on its procedures. The goodwill they develop could help them in the future should they again face a government grab for data. Without that goodwill, public opinion could shift to “Go get ‘em DOJ, and put it all out there for public review!”

It shouldn’t have to come to that. Google can afford to be a little more transparent.


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David Utter is a staff writer for WebProNews covering technology and business.

The Google Rainy Day Fund
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