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Great FT article on Google provides more evidence of Google's cultural aversion to internal controls

Richard Waters of the FT produced a very insightful and newsy article on how Google reportedly passed on buying DoubleClick two years earlier over internal concerns about how that alignment of businesses could clash with Google's famed "don't be evil' highmindedness.

  • It's a must read article for Googlephiles.

My big takeaway from this article was an undercurrent of Google's struggle over internal controls to ensure Google's "ethics" are carried out in practice.  

  • The FT quote that leapt off the page at me was by Nikesh Aurora: 
    • "We try not to have too many controls," says Mr Aurora. "People will do things that they think are in the interests of the company. We want them to understand the values of the firm, and interpret them for themselves." (Remember rogue trader Nick Leeson at Barings...)

I am stunned by this attitude on two fronts:

  • First, it is both amazing and truly scary that the company that archives more personally private/sensitive information than any other company in the world, and that lives in a world of hackers and data thieves, talks about not wanting a lot of "controls" at Google.
    • This is on top of a recent comment by a Google lawyer at an ABA gathering that was reported in Comm Daily, that also indicated Google tries not to have a lot of "controls" as is interferes with Google's "innovation without permission" culture.
    • "Controls" are also called "internal controls and they are absolutely critical in the Post Enron/Worldcom world of Sarbanes-Oxley law that corporations are responsible for the actions of their employees, and are even more culpable if they do not have strong internal controls in place.
      • A previous blog of mine detailed broad evidence of the systematic weakness of Google's internal controls.
      • Google's official and cultural aversion to internal controls may have been appropriate for when Google operated out of a garage, but it wholy inappropriate and irresponsible for a company aspiring to organize all the worlds information -- including its most private and sensitive information.
  •  Second, I am stunned that their organization is so decentralized and unsupervised that at least two Google officials would be stupid enough to be quoted in the press about Google's culture being averse to internal controls! Hello? Is Google's corporate discipline and supervision that non-existent?

Bottomline: As an analyst that has closely monitored Google development over the last several years, I believe the single most defining characteristic of Google as a company is its stunning lack of organizational discipline/supervision.

  • I continually amazed by new Google developments -- to learn yet again -- how this company, with the world's leading brand, obviously has no adult supervision.  

 

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