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Analyst urges Google to do evil

Posted by Michael Bloch in web marketing (Friday October 10, 2008 )

I was reminded today why I don’t play the stock market (aside from the recent crash) and of my general distaste of many that do.

As I’ve mentioned from time to time, the whole problem with publicly listed companies is that shareholders expect increasing profits year after year and they don’t really dig around (or usually care enough) to find out how the company achieves that. Additionally, If a company is successful, the shares go up in value, often beyond what is realistic and then when the shares start dropping, shareholders start screaming. It’s all very unsustainable and just pure and utter greed.

This seems to be particularly the case with online-focused companies – expectations for return on investment are always high based on the stellar performances during the Dotcom Bubble of the 90’s.. which ended in a massive bust. But we still haven’t lost that mentality.

Google’s famous motto is “don’t be evil”. That credo is certainly being put under strain of late with Google shares dropping dramatically in value from their high of $700+ – but bear in mind they are still worth much more than when the company floated on the stock exchange a few years back – $85 a share then, around $340 now.

The drop isn’t because Google is doing a bad job – it’s still the best search engine out there by a long shot. They are still making tons of cash too. Aside from the global economic woes, maybe it’s that people are now getting more realistic about what the stock is actually worth.

One of the first things that companies do when they start losing money or are pressured by shareholders and commentators is to trim the fat – unfortunately, some of that fat mightn’t be trimmed off the fat cats, but off things like customer support or general service quality.. or philanthropic pursuits.

I’m a big believer that business should give back to the community that supports them. Google is well known for its philanthropic efforts and free services that many find useful, but some bright spark analyst has urged the company to drop all that.

Soleil-Media Metrics analyst Laura Martin believes Google should stop the practice of donating 10 percent of profits to charity amongst a variety of other odd recommendations. While I don’t profess to understand a great deal about big company economics or the stock market, I do know a little about cause marketing – it works. It *makes* money through the warm and fuzzy WOM (Word Of Mouth). Not only does it work, but it’s a responsibility and an obligation for all successful businesses in my view.

Google, whatever is left of your soul, *please* ignore Ms. Martin’s recommendations – the degree of philanthropic work you do is what makes you less evil than other megacorps!


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