Google, the Engineering King

These days, Google (Nasdaq: GOOG  ) isn't just a tech company. It's an Internet institution that plays by a different set of rules thanks to its massive wealth, and willingness to aggressively reinvest it. In 2009, Google's ploughed more than $2.83 billion, or roughly 12% of its revenues, into R&D investments. And while the company slashed its capital expenditures in 2009 to a "mere" $809 million to help cope with the recession, Google's capital spending topped $2 billion in the preceding years ... and looks like it's on its way to returning to those levels.

Thanks to Google's willingness to reinvest huge chunks of its AdWords and AdSense billions, the company has both a colossal army of engineers and researchers to work on new products and technologies, and a data center infrastructure to host these inventions that's arguably second to none. And just as impressive as the scale of Google's investments is the quality of the people that much of this money is being invested in. Thanks to a combination of pay, perks, and culture, Big G has long been renowned for attracting the best and brightest.

Add it all up, and Google is one of a kind in the Internet world when it comes to unleashing and supporting a flood of innovative, resource-intensive new services. Google Maps is a good example of such a service – when it was first released, its dynamic interface ran circles around the static maps then provided by Yahoo! Maps and AOL's (NYSE: AOL  ) Mapquest. And while competing interfaces eventually caught up, they didn't do so before Google Maps had gobbled up a ton of market share, and was busy adding new features such as Street View. The unmatched collaboration and syncing features of Google Docs are another example of Google out-engineering a slew of rivals. As are the news aggregation and ranking capabilities of Google News, and the blistering speed of Google Chrome.

And now, Google Instant can be added to the company's feats of technical wizardry. As Google engineer Ben Gomes explained on his blog, making Google's infrastructure Instant-ready required both a massive boost in system capacity to handle all the additional search results turned up by Instant relative to a conventional search, and some major innovations to guarantee that both Google's servers and a searcher's web browser would be able to quickly turn up new search results. Programming a VCR this wasn't.

Maybe in time, Microsoft's (Nasdaq: MSFT  ) Bing, InterActiveCorp's (Nasdaq: IACI  ) Ask.com, or some other Google competitor will be able to deliver a real-time search feature that's competitive with Google Instant. But the resources and technical know-how needed to do this means that they're unlikely to catch up overnight. Until then, Google can use Instant to further add to its search market dominance, all while deploying its money and talent to find new ways to add to it. That's music to the ears of Google investors, for sure. But considering the company's track record, it's also business as usual.

Fool contributor Eric Jhonsa has no position in any of the companies mentioned.

Google and Microsoft are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers selection. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google and Microsoft. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.


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