Google+ Costs approx. $600 Million

Google spent approximately $600 million for the development and launch of Google+ social network, this  can be equivalent to the price of News Corp.’s MySpace.

There are about 500 Google+ employees and the average annual salary of these employees is $ 250,000. Google+ took advantage of the technology and talent from Google’s 3 acquisitions;

1. $ 123 million acquisition of On2
2. $ 158 million acquisition of  Widevine, and
3. $ 179 million acquisition of Slide

 

 

 

 

The estimated calculations were put down by Phil Terry, the co-founder of Creative Good, a user experience business. They are as follows:

  • 500 employees working on Google+
  • $250K in average all-in comp for each of them including stock-based compensation.
  • $125 million in annual labor-related costs and stock-based compensation for the Google+ team
  • Google+ also relies on or uses in part technology and people from three acquisitions
  • $123 million for On2
  • $158 million for Widevine
  • $179 million for Slide
  • Add up the $125 million in comp plus the $460M in acquisitions and you get $585 million.

 

MySpace was sold again for a paltry $35 million. Like  MySpace and eventually  Facebook,  Terry believes  Google‘s $585 million investment may be a losing one. He proposes Phil’s law, which states, that there’s an inverse correlation between the speed of scale of a social network and its durability.  Of its inevitable failure, he says:

While I like what I see with Google+ and think they understand some of the problem with online social networks, Google is underestimating the durability of even a reformed  online social network like theirs. Elements of Google+ will live,  especially Hangout (the very compelling video chat service) but Google+ as a social network will either not scale or, if it does, it will eventually fall for the same reason that MySpace did or Facebook will.

via: TNW

 

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Dhawal D