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Non-Tech : ACCO: 800America.com, Inc
ACCO 3.435-0.3%Nov 10 3:59 PM EST

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From: LTK0071/31/2007 8:51:18 PM
   of 694
 
But while Google was generous with the numbers Wednesday, investors were wishing the company would be more stingy with its own dollars. Google executives found themselves defending all types of corporate spending. Google spent nearly $2 billion in capital expenditures in 2006 to grow its operations. When asked about it, Schmidt insisted the huge figure was necessary to create Google’s competitive advantage.

Analysts felt similarly about the cash Google handed out to promote its new payment system, Checkout. Was the spending worth it? "I don’t have any data," said co-founder Sergey Brin. "But we’ve seen a substantial increase in the likeliness of people clicking on an ad with a Google Checkout badge." Hardly reassuring.

The cash Google must hand over to its publisher network--$3 billion in 2006--is both a blessing at a curse. It keeps people using Google’s products but restricts Google from posting the outlandishly high revenue growth rates investors crave. But that revenue sharing deal is part of the backbone of Google’s business model, so nobody should be surprised when the bill arrives.
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