Archive for March 23rd, 2008
Google presents itself as a technology company. However, in reality they are an advertiser exchange board. Vendor A creates good or service. Customer B wishes to purchase good or service. Google makes it possible for Vendor A to be found by Customer B. Vendor A is willing to pay Google some money for that service.
The problem, and here’s the nut that needs to be understood, is to create that switchboard Google has to expend vast amounts of cash to maintain its vast server farms. In effect, Google’s server farms provide the medium through which Vendor A is found by Customer B.
Why is this important?
Google makes money from trades. They don’t manufacture the content. To be the preferred location for the trades they need to invest huge amounts of capital to create the best platform for making the trades. As long as the trading exceeds the capital cost things are going well. If the trading were to drop all of a sudden, the capital costs remain and things start getting very interesting.
Let me try this differently.
Once you bring a data center online, if the trading revenue does not match the cost of running the data center, the capital cost remains. Given that trading revenue can disappear overnight, the danger is that overnight the total revenue that Google has can collapse. In that case Google would have vast operational liabilities with no revenue stream. The net effect would be complete collapse.
That of course is an absurdly negative belief, but it is interesting to observe that Google’s vast resources are being deployed into vast capital expenses,and that the vast resources are dependent on trading and that if the trading were to stop, then the capital expenses would remain creating all sorts of interesting pressure on their bottom line.
March 23rd, 2008
I happen to listen to the Puck Podcast on a fairly regular basis. They are one of the podcasts that I listen to when I am exercising.
This past winter, I got out of shape and as result fell behind…
Anyway, so I am listening to the January podcast, and Doug says that maybe the reason Alex the Great has that many goals (as does Kovalchuk) is because the defense in the west is better and they play a lot of games against weaker Eastern teams. He then proceeds to rattle off the names of the great defenders that play in the west, guys like Niedermayer, Pronger and Lidstrom.
And just recently, Ron Wilson of the Sharks, remarked that there are no top ranked defensemen in the Eastern Conference after Brian Campbell arrived in San Jose. As a fan of Mr. Markov, I would think that Mr. Wilson is mistaken, but after Markov, I would be hard pressed to name a top-rated defenseman in Eastern Conference.
Personally I think that Doug was wrong, because he discounted the fact that although the West may have better defensemen, the East has better goaltending.
One of the implications of Doug’s statement would be that the Ducks Getzlaf’s 23 goals are more valuable than Ovechkin’s 60 because they are against superior defense.
But facts and numbers are always more interesting than statements.
So I decided to see how many goals did Ovechkin score vs the West and vs the East.
Ovechkin has scored 60 goals, and has 7 goals in 6 games against the West.
What about Kovalchuk?
Kovalchuk had 3 goals in 6 games against the West.
All this shows is that great players will score regardless of who is defending them. And both Ovechkin and Kovalchuk are great players.
March 23rd, 2008
After 15 years of futility it is fun to watch Montreal thoroughly dominate someone.
The Bruins are not a bad team, it’s just their style of play is uniquely unsuited to the Montreal Canadiens. Essentially they rely on a physical game that prevents many chances. That style works well if you are dealing with a team that does not have precision passing like Montreal. That style would also work well if the Bruins goaltending is good.
The latest game was proof. The Bruins were able to stay in the game because of their excellent goaltending. The Habs had the kinds of chances they typically get against Boston, but this time Thomas was on the ball.
I do not expect the Bruins to lose another eight to the Canadiens, but it would be fun…
March 23rd, 2008
