I’m never surprised by the stock market. I was happy when the Google stock peaked at around $555/sh last week, but yesterday they dropped ~8% to ~$515. Why? Well, because Google announced record revenues and profits of course!
But actually, I think there is one thing which really reflects the market disappointment – too rapid growth. According to the public quarterly report, we hired 1548 people, bringing total headcount to 13786. That means that 11% of the company arrived last quarter, and that is on top of very high growth rates in the prior quarters as well.
If growing at that rate quarter-over-quarter doesn’t raise your eyebrows, then I’m not sure what will. On the good news front, Eric and others on the conference call seemed to indicate they were looking at this. I guess we’ll see what happens next.
For investors (anyone?) it’s just hard to believe that a company can absorb that volume of people without also taking on significant risk to their culture, technology, quality, profitability, and ability to innovate. Risk is uncertainty, and uncertainty warrants a lower stock price. It’s just that simple. On the other hand, to not grow rapidly would mean to take on another, less visible type of risk – that competitors in the field just bulldoze you with massively more features, products, and sales.
All that said, please continue to invest in Google because there’s a whole bunch more of us now working together to make sure that Google’s best days are ahead, and not just part of the past.