FacebookTwitterGoogle+RedditEmail

Google Money

by DARWIN BOND-GRAHAM

If you google “money,” the search engine called Google, from which that verbification is derived, will tell you that there are 1.12 billion results (as of February 27, 2014). That sounds like a lot of anything, but consider this fact: Google Inc. makes $1.12 billion in profit every 33 days.

Last year approximately $60 billion in revenue flowed through Google, one of Silicon Valley’s tech giants. To put this kind of dollar churn in perspective consider that the state of California’s 2013 budget was $96 billion. Google’s own budget, it’s expenses on sales, marketing, salaries, and R&D was $45 billion, about half that of the largest state in the nation. At this point Google might as well be printing money. Google is sized like a mature blue chip industrial corporation, but it’s still growing like a startup. From 2012 to 2013 Google’s revenue rose 20 percent. It’s net income for 2013 was about $13 billion. That’s cash for the company and its shareholders. Google has so much money it has become something of a problem.

Where to put it all? The G-Men have tucked $58.6 billion into different pockets for safe keeping. Google has $10 billion in cash deposits. But why earn less than inflation when you can invest? Google’s financial engineers have bought $1.5 billion in foreign government bonds. Google owns your city’s debt, and the bonds of your local school district; the company owns $3 billion in municipal bonds. Google owns $7.3 billion in the shares of other corporations, perhaps the company you work for? Google might even own a slice of your mortgage; it holds $7.3 billion in federal agency-backed mortgage securities.

Part of the reason Google has so much cash is because it has come to dominate Silicon Valley’s key industry: advertising. More than 90 percent of Google’s earnings come through selling ads, either directly through its own web sites, or third party web sites.

But advertising is only hyper-profitable because Google has figured out how to dodge the tax man. Google’s effective tax rate was already well below the statutory 35 percent federal corporate rate, but last year it dipped even further, falling from 19.4 percent in 2012 to 15.7 percent in 2013. It’s hard to tell what Google actually forked over to the feds and to the foreign governments where it operates, but Google reports that its tax burden keeps dropping “primarily as a result of proportionately more earnings realized in countries that have lower statutory tax rates,” according to the company’s 2013 annual report. Many of the countries Google is referring to are considered tax havens.

But here too it’s hard to tell which countries specifically are hosting Google’s strategic shell companies, and how much Google is earning overseas. As Jeffrey Gramlich and Janie Whiteaker-Poe, researchers at the University of Maine pointed out in a recent study, Google began omitting information about its overseas subsidiaries in its SEC filings three years ago.

“Google’s 2009 SEC Form 10-K, filed in February 2010, disclosed 117 subsidiaries, 81 of which were located in 38 foreign countries,” note Gramlich and Whiteaker-Poe. “When Google issued its financial statements for the year ended December 31, 2010, its Exhibit 21 listed only two significant subsidiaries.”

So where did 98 percent of Google’s subsidiaries go? Did Google terminate them?

Gramlich and Whiteaker-Poe found that most of them still exist and are registered with authorities overseas, but that they have been purposefully omitted from Google’s SEC filings, likely in an effort to conceal tax planning strategies used to reduce taxes paid to the U.S. government and foreign nations. Google’s most recent filing with the SEC reveals only 3 subsidiaries. Two are in Ireland, and one is in Delaware, both jurisdictions that afford Google secrecy and basement corporate income tax rates.

Darwin Bond-Graham, a contributing editor to CounterPunch, is a sociologist and author who lives and works in Oakland, CA. His essay on economic inequality in the “new” California economy appears in theJuly issue of CounterPunch magazine. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion

 

 

Darwin Bond-Graham is a sociologist and investigative journalist. He is a contributing editor to Counterpunch. His writing appears in the East Bay Express, Village Voice, LA Weekly and other newspapers. He blogs about the political economy of California at http://darwinbondgraham.wordpress.com/

More articles by:
May 26, 2016
Paul Craig Roberts
The Looting Stage of Capitalism: Germany’s Assault on the IMF
Pepe Escobar
Hillary Clinton: A Major Gold-Digging Liability
Sam Pizzigati
America’s Cosmic Tax Gap
Ramzy Baroud
Time to End the ‘Hasbara’: Palestinian Media and the Search for a Common Story
José L. Flores
Wall Street’s New Man in Brazil: The Forces Behind Dilma Rousseff’s Impeachment
Patrick Cockburn
The Battle of Fallujah: ISIS Unleashes Its Death Squads
John Feffer
The Coming Drone Blowback
Alex Ray
The Death Toll in Syria: What Do the Numbers Really Say?
Richard Pithouse
We Shall be the Prey and the Vulture
Binoy Kampmark
Trump and the Polls of Loathing
Manuel E. Yepe
A Cruise Ship Without Tourists Arrives in Havana
Jack Rasmus
Greek Debt Negotiations: Will the IMF Exit the Troika?
Ajamu Nangwaya
Pan-Africanism, Feminism and Finding Missing Pan-Africanist Women
Howard Lisnoff
Israel, a Palestinian State and Anti-Semitism
May 25, 2016
Eric Draitser
Obama in Hiroshima: A Case Study in Hypocrisy
Ryan Mallett-Outtrim
Does Venezuela’s Crisis Prove Socialism Doesn’t Work?
Dan Arel
The Socialist Revolution Beyond Sanders and the Democratic Party
Marc Estrin
Cocky-Doody Politics and World Affairs
Sam Husseini
Layers of Islamophobia: Do Liberals Care That Hillary Returned “Muslim Money”?
Susan Babbitt
Invisible in Life, Invisible in Death: How Information Becomes Useless
Mel Gurtov
Hillary’s Cowgirl Diplomacy?
Kathy Kelly
Hammering for Peace
Dick Reavis
The Impeachment of Donald Trump
Wahid Azal
Behind the Politics of a Current Brouhaha in Iran: an Ex-President Ayatollah’s Daughter and the Baha’is
Jesse Jackson
Obama Must Recommit to Eliminating Nuclear Arms
Colin Todhunter
From the Green Revolution to GMOs: Living in the Shadow of Global Agribusiness
Binoy Kampmark
Turkey as Terror: the Role of Ankara in the Brexit Referendum
Dave Lindorff
72-Year-Old Fringe Left Candidate Wins Presidency in Austrian Run-Off Election
May 24, 2016
Sharmini Peries - Michael Hudson
The Financial Invasion of Greece
Jonathan Cook
Religious Zealots Ready for Takeover of Israeli Army
Ted Rall
Why I Am #NeverHillary
Mari Jo Buhle – Paul Buhle
Television Meets History
Robert Hunziker
Troika Heat-Seeking Missile Destroys Greece
Judy Gumbo
May Day Road Trip: 1968 – 2016
Colin Todhunter
Cheerleader for US Aggression, Pushing the World to the Nuclear Brink
Jeremy Brecher
This is What Insurgency Looks Like
Jonathan Latham
Unsafe at Any Dose: Chemical Safety Failures from DDT to Glyphosate to BPA
Binoy Kampmark
Suing Russia: Litigating over MH17
Dave Lindorff
Europe, the US and the Politics of Pissing and Being Pissed
Matt Peppe
Cashing In at the Race Track While Facing Charges of “Abusive” Lending Practices
Gilbert Mercier
If Bernie Sanders Is Real, He Will Run as an Independent
Peter Bohmer
A Year Later! The Struggle for Justice Continues!
Dave Welsh
Police Chief Fired in Victory for the Frisco 500
May 23, 2016
Conn Hallinan
European Union: a House Divided
Paul Buhle
Labor’s Sell-Out and the Sanders Campaign
FacebookTwitterGoogle+RedditEmail