Brij Singh's Blog

April 20, 2007

Just tracking customer happiness

Filed under: Tech — Brij @ 1:33 am

Interesting question and answer exachange between Anthony Noto, analyst at Goldman Sachs and Eric Schimdt:

The second question is, we tracked your revenue per employee on a
gross basis. Up until the fourth quarter of 2005, gross revenue per
employee had been growing in the single-digit range. Since then it has
been declining, in fact down 12% year-over-year this quarter. I
recognize that is because you’re adding more new employees that are not
productive. At what point do you think your existing employee base is
large enough that your new employees do not cause your gross revenue per employee to decline?

Eric Schmidt

An interesting series of questions. We don’t approach the questions quite
the same way that you phrased them. Our primary focus is on end user
happiness, end user traffic, end user growth. So what we look at is we
look at what will drive even more end users using our product globally.
So, for example, if we could bring out a product that will cause people
to use Google and its various applications that much more and they
spend more and more of their day using Google services, that allows us
to eventually monetize that. So we do not insist on a direct link from
say a product that does not get revenue to one that does. In the cases
that you cited, we look at the revenue contribution. But the primary
focus and the primary management focus is around end user happiness,
end user growth, end user everything.

With respect to the revenue per headcount, again we are not very focused on that. We are much more focused in total growth of the platform, total growth of the
number of advertisers, total growth of the monetization. It is easy
enough for us to dial any particular metric like employees per gross
revenue up or down as we see fit. It is more important to focus on end
user happiness. A lot of the people we are talking about are, for
example, coming in for customer service globally. We are also way, way
investing in engineering because we believe this is a time where our
model is scaling that products that we are going to bring out in a year
or two are going to have huge impacts to the investments we’re making
in data centers, and we need the engineers to build the great products
to do so.

I thought this question betrayed how little this analyst understood Google culture.

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