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May 12, 2006

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» Google Cap-Ex: Or Why $1.8M On Aeron Chairs Is Good News from DealBreaker.com
Henry Blodget explains. So maybe the outlook for free cash flow growth isn't as bad as it seemed. Unless Google plans to become a REIT, approximately $750 million of the $1.5 billion in CAPEX estimated for this year should disappear.... [Read More]

» Google Cap-Ex: Or Why $1.8M On Aeron Chairs Is Good News from DealBreaker.com
Henry Blodget explains. So maybe the outlook for free cash flow growth isn't as bad as it seemed. Unless Google plans to become a REIT, approximately $750 million of the $1.5 billion in CAPEX estimated for this year should disappear.... [Read More]

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Comments

Anders Kargaard Jensen

Where is the "first" guy now?

Good input in the very important CAPEX spending - thanks!

Victor

Great insight Henry. I agree, some of this CAPEX is clearly ephemeral and that bodes well for future earnings.

King Troll

Too busy in my stores bros. Henry hasnt been as active lately so I havent been on much.

Business is fucking slow this week. Last week was incredible but this week sucks. Im thinking the local drug dealers got pinched, supply is low, weather is horrible, no major events, knockoff clothing stores increasing, and gas prices. Good things, weather will get better, this is the slow season, and we will be paying the knock off stores a visit to either beat their asses or make them pay up for opening. Basically we run this shit bros.

On another note, Im going to build out a website. My only competition would be drjays.com and karmaloop.com. Should have it going in a few months.

I need to get Nike though. That's the only account I'm missing. Hard as hell to get them on my team. I have exclusivity with Reebok's urban and music line in my whole city. Whole city bros!

I'll post a link to the website when it launches. Within 3 years I plan on expanding all over the U.S. Watch fuckers. Zero debt, no funding. Fuck VC's.

I was checking out Finish Line's 10k because they bought out Man Alive. ManAlive spends $480,000 on each store for fixtures/ equipment. Each store is about 3,500 sq. ft, and they do about $380 per sq. ft. We're at about $25,000 in opening costs, 3,000 sq. ft. and we do about $180 per sq. ft with word of mouth marketing. Our upside potential is huge. Operating and net margins are about the same as Man Alive as well.

Neal Lachman

KT,

Good luck man. It is best to go self-funded all the way, which is how I got to where I am today. Well... i had family backing.

Drop me an email at neal at 21centuryvc.com when you want advice or when you feel like giving me advice.

Jeff Kaplan

Nice visability into Google's CAPEX. But it begs the question, should Google be investing in fiber? Another way to put the question is: what might it cost Google to deliver search if they have to pay broadband providers a premium for highest speed content delivery?

Chris Fischer

Neal

Not to get personal and drag this blog even more off topic, but your constant and unrelenting self promotion/congratulation, you simply scream of fraud. Sure enough, a 2 second google search yielded
http://www.bizjournals.com/kansascity/stories/2004/04/26/daily51.html . You never seem to mention your two bankruptcies when you're giving financial advice.

ndame

Thats hilarious Lachman. I'm an equity analyst in Kansas City and I can assure you that the city couldn't come close to supporting your "project." First of all, tourism doesn't exist in Kansas City. Secondly, the median income in Kansas City is relatively low. Third, it is winter in Kansas City for around one third of the year. I could go on and on but there is no point. The point is: you either do little homework, terrible research and/or have terrible business sense. Perhaps that explains the bankruptcys. But I digress....thanks for the laugh of the day

ndame

Good god Lachman, I applaud people that aim high but this...

http://www.grandamericana.com/

with zero experience?

I suppose the world needs dreamers.

Neal Lachman

Chris,

My two bankruptcies are incorporated in my resumes on my corporate sites. I am proud of them ;-)

Ndame,

We had support from the KCEDC at the time, but my mistake was that I proposed a too big project for kansas. BTW, there are 20 million visitors per year in and around KCMO. The development was not meant for local tourism.

Grand Americana is a project that is larger than your messed up brain can handle.

And to make things worse for pricks like you, I am now proposing the world's largest investment fund, and I am proposing a $5B development project in NYC. Any problems with that? Go suck a tree trunk then.

Chetan

And its stock is falling, any comments ?

Neal Lachman

Chetan,

You are right. The stock's recent decline should be commented on. My 2 cents is that this proves once again that Goog is a yoyo stock, and nowhere near stabilization.

GOOG represents the bubble and the burst we are all so well aware of. But the thing beyond comprehension -i.e. with Goog- is that it keeps on bubbling up after bursting again, and again, and again.

Has Henry ever seen this kind of bubble-burst-bubble-burst effect before in his career? I can't remember any comparable history of an internet stock.

billy

Neil, the ideas sound great but why not start smaller.

I doubt you can start a 50 b fudn without have a 500 mil fund first.

Neal Lachman

Billy,

Thanks for the advice, but this is not the place to discuss my personal stuff. I will briefly say that I have no desire to start something smaller, because it would neither make a major difference in the greater perspective (the tripple gain) nor in my original business, the Fiber To The Home industry.

Chris Fischer

Neal,

I'm wondering what experience you have in the telecom industry that you think you'd be able to succeed in raising funds for a plan like that? I mean, you didn't let the fact that you had no experience dealing with real estate dissuade you from trying to build something almost twice the size of the Petronas towers in Kansas City without even visiting there, so I don't expect your lack of experience matter here either, correct?

Personally, I think you're a fraud that knows how to put up good looking websites in order to seem legit, to try to bilk people out of their money. According to that article you wanted, what, $7 million to get in on the Kansas City project? So how much for the fiber project? Nice language you use in the above post too - you're exactly that kind of person I'd like to give several million dollars to.

Neal Lachman

Chris,

Get a life.

Neal Lachman

Chris, Danny, Ndame:

What is this? Invasion of lame and jealous people?

Posting my company telephone number here makes you a man? Calling me a fraud makes you successful in life?

Gentlemen, the person who asks money from an investor is subject to thorough checks. You are so naive to think that someone can fraud large investors into handing over even $100. Yet, I can raise more money in a month than you will make in your life time. That is the harsh truth for you.

I have 15 years of experience in Real Estate finance and fiscal business, and the same number of years in broadband buying business (Cable and satellite).

I have world class engineers, MBAs and PhDs in my companies who have done the same checks on me as investors did.

This is my last response to lame people like the three of you.

Henry Blodget

All right, fellows. Sorry to intervene, but we're a bit off-topic here. Readers (and I) are grateful for all intelligent thoughts, so please keep them coming, but please also stay on topic. Thanks.

jm303303

Henry - The footnotes in the Q state "Construction in process is primarily related to the building of production equipment servers and leasehold improvements". I know Google builds a lot of their servers themselves from components. I read this to mean that the majority of "construction in process" is related to servers and data center build-out. Last year land and buildings was 15% of total capex, and in Q1 it was 12%. So I'm not sure you can infer that the capex surge in '06 is facilities related.

Bill Burnham

Everyone loves Google, but I also like Yahoo. What I love about Yahoo is that they have great ads. They're so creative.

This is a nice trip down memory lane of the Yahoo TV commercials.

My favorite is the original Yahoo! gone fishing ad . It's sure to go down as a classic like the Apple ad from way back.

Armchair Analyst

Can't we try to break down the capex by looking at the increase in depreciation from one quarter to the next? If we know the amount of additional capital investment that is being depreciated, then the depreciation figure gives us the weighted average depreciation period of the new capital assets (assuming straight-line depreciation; adjust as appropriate). This can then give an approximate breakdown between short-lifetime assets like servers, and long-lifetime assets like real estate and building improvements.

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