This week, Fortune magazine released its list of the 25 most powerful business people in the world… Number one is Steve Jobs of Apple; number two is China’s best friend Rupert Murdoch; at number three comes Goldman Sachs head honcho Lloyd Blankfein. Google’s founders Eric Schmidt, Larry Page and Sergei Brin are at number four; and in fifth place is Warren Buffett.
All very interesting and unsurprising, but it looks like Google’s founders Schmidt, Page and Brin believe that their all powerful business status can change the world for the better.
Overnight, the company revealed that it was moving into the alternative energy arena. With its massive energy-guzzling servers, this move is far from the philanthropic gesture as which it was presented. The company’s servers guzzle massive amounts of energy and this consumption is going to increase significantly.
Next year the company plans to allow more and more files to be stored on its servers by internet users. This will create a massive demand for power at the Googleplex, in ultra-trendy California. This has the potential to be a real PR disaster for the founders’ cash cow going forward.
In order to prevent this bad publicity, the company has said that it will pour hundreds of millions of dollars into a quest to lower the cost of producing electricity from renewable energy sources – particularly wind and solar.
The last time I commented on businesses using wind power as a PR stunt I got some genuine hate mail from readers. In my career as a writer I have only had serious hate mail on two occasions. One of them was when I said that Victoria Beckham was a waste of space (yes really), the other was when I dared to suggest that wind power was not going to solve the world’s energy needs.
Go on gov’nor, buy my book
The rabid responses to my comments on wind were all down to mockney moron Jamie Oliver. I mentioned the fact that his company had issued a press release in September 2006 saying that he was planning to install wind turbines on top of his Fifteen restaurant in Cornwall.
The story was picked up in the national press and he got lots of free publicity for his business venture. Such gushing column inches are hard to come by… and they are valuable…
More than a year later and the story has died a death. I suspect that if these turbines had been constructed it would have made it into the press yet again. After all, Mr Oliver would never miss a chance for some free PR, would he? So are the turbines there – or am I just a little bit more cynical than I think I am…?
If anyone has been to Fifteen recently and spotted them, I’d appreciate it if they could let me know if it is now a trendy eco-zone…
Anyway… Google has a problem. It’s hip… it’s trendy… its employees go around the place on scooters wearing three-quarter trousers with baseball caps turned around the wrong way… They probably even call each other “dude”…
However, as the trendy people embrace climate change as their cause celebre, Google could have found itself stuck between a rock and a hard place. More and more people are focusing on the energy consumed by technology and how detrimental it is environmentally.
For example, Internet blogger Nick Carr has actually worked out that an avatar existing in internet world Second Life consumes as much energy as a real person living in the real world. I find that fascinating…
Good PR deals with issues head on
So, in order to deal with negative criticism before it happens, these clever men… sorry… these clever dudes, have declared that the cost of solar power could fall by 25%-50% “should they reach their goal”. (Note the part in inverted comma’s – it’s important).
The company’s new project is called Renewable Energy Cheaper Than Coal, or RE
"If we achieve these goals, we are going to be in the (electricity) business in a very big way," Larry Page said in an interview. "We should be able to make a lot of money from this."
The company certainly has the financial muscle. In its results for the three-month period to the end of September, the group had a nice cash pile of $13 billion sitting on its balance sheet. This pile is expected to grow significantly as its business model throws off cash.
There are precedents for tech supremos using their millions to do good. I am a particular admirer of the Bill & Melinda Gates Foundation and applaud the fantastic work it is doing to prevent malaria in Africa.
I have suffered this illness numerous times myself and I have had the misfortune to see people die of the disease. It is vile, but large pharmas don’t want to spend too much money developing products to cure malaria because there isn’t enough profit in it. The Gates’ money has bridged this gap – and I give them a standing ovation.
This means I am split over the Google statement. One half of me dismisses it as New Labour-esque piece of cynical spin, while the other half of me really, really hopes it succeeds.
At least the dudes at Google will follow up on this story. I do not believe that this will be the last we hear of this project - unlike Jamie Oliver’s piece of wind. That got him free publicity in the newspapers, so it served its only purpose… P.S. If you enjoyed this article then sign up for Smart Commodities UK. It’s dedicated to searching out the investment trends that could provide our biggest profit opportunities for the next decade…
