Did you know that Google
Sounds silly, but it's true. Big G used to manage its finances like any other large business, with a conglomerate of processes and software packages that required manual input all over the place. Treasurer Brent Callinicos got sick of this manual fiddling a couple of years ago, and started doing something about it. Now, Google's finances are a highly automated beast that manages a $26.5 billion purse with fewer clicks than before.
Tapping into the talents of Google's enormous engineering workforce, Callinicos ordered up bits of connective tissue between the separate bits of data management that make up foreign currency exchanges, energy trading for the company's data centers, and more. Then he started hiring financial pros from the banking world, to make sure that the data gets mangled in all the right ways. It's the approach you should expect from the world's possibly foremost expert in making algorithms to solve difficult problems.
Only Cisco Systems
Given the massive heap of gold Google has to shuffle around the globe every day, it only makes sense to manage the treasury like the automatic traders at your favorite hedge fund. Squeezing a better return out of a cash balance this large makes a real difference to the bottom line, until the cash is needed for a huge acquisition somewhere.
Google is no stranger to big deals; if you remember the $1.65 billion YouTube buyout back in 2006, that contract represented about 15% of Google's cash balance at the time. Cisco, IBM
People (myself included) keep telling Apple and Cisco to spend more cash. Maybe Google should speed up the buyout train, too; even a brilliantly managed savings account surely gives a smaller return than a well-designed buyout.
Buy or save -- what's your advice for Google's financial team? Share your thoughts in the comments below.
Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. Microsoft is a Motley Fool Inside Value selection. Google is a Motley Fool Rule Breakers pick. Apple is a Motley Fool Stock Advisor recommendation. Johnson & Johnson is a Motley Fool Income Investor recommendation. The Fool owns shares of and has written puts on Oracle. Motley Fool Options has recommended buying calls on Johnson & Johnson. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.