Friday, April 18, 2008

Google Up, House Prices Down

Shapes #2

Just another day in Silicon Valley.

Google pulled the proverbial rabbit out of the proverbial hat and confounded its (non) proverbial detractors. Profits were up but free cash flow was reduced to below $1 billion, thanks to CapEx hitting an eye-popping $842m. In one quarter. Yipes. Still, I suppose it gives them a budget line item them can trim when the going gets tough.

Meanwhile, the San Jose Mercury News reports that the median price of a home in the Bay Area fell 20.4% year-on-year to $549k, with Santa Clara seeing a fall of 9.3% over the same period to $685k.

So there you have it, a solution to everyone's problems. Have Google divert just one quarter of CapEx into buying houses in the Bay Area and, assuming you get a discount for bulk-buying, that equates to 1,700 properties changing hands overnight, single-handedly reinvigorating the entire Silicon Valley economy and making a handful of realtors rich as a double chocolate toffee pudding with extra cream on the side. Well, there has to be a downside to any plan, right?

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