Google Increasing Innovation Spending in 2006
Google has said in a statement that they would be spending a lot more than usual to continue innovating in the market where they face serious competition from big players like Microsoft and Yahoo!
This means that their revenue growth will continue to decline amid increasing competition. Google also notified this in its annual form filed late Thursday with the Securities and Exchange Commission.
“Our investments in property and equipment, including information technology infrastructure and land and buildings, will likely be significantly greater in 2006 compared to 2005.”
In 2005 Google spent $838.2 million dollars on capital expenditure compared to just around $319 million in 2004. They also added that their primary revenue source (online advertisement) faces increasing competition from the traditional sources of advertisements like on television and print media.
Even if revenue declines a little, Google still remains a strong long-term investment. And, a fun company to watch:-)
Google must be running out of steam. I wonder if we will see another dot bomb?