Google and Apple's Financial Statements

For fun, I decided to compare the financial statements of these two giant companies. Google, incorporated as a privately held company in September of 1998, is doing quite well for itself. For 2009, Google reported $6.5 billion in net income. (Net income is basically revenue minus expenses as well as tax.)

Apple, on the other hand, was incorporated in January of 1977, about 21 years before Google. In 2009, it reported only $3.3 billion in net income, almost half of Google's net income.

I make this comparison for two basic reasons. The companies are competing against each other right now in a few areas such as mobile phones. They also have completely different business philosophies. Google is pioneer in innovation and loves open-source. One of the most admirable tasks Google has taken on is Google Books. They want to digitize, and therefore preserve, knowledge and history for the good of civilization and its advancement.

Apple has a polar opposite business philosophy. It views success as being closed-source, closed-distribution. You cannot create and app for an iPhone or iPad without Apple's approval. Even then, you have to create the apps in the way that Apple wants. The creator does not have complete freedom when trying to be creative. This easily hampers innovation.

I was particularly caught off guard yesterday when I noticed that I cannot choose any color as my desktop background on my MacBook. It has a list of 10 colors that I can choose from, but I cannot open a color wheel and create my own. I could however choose my own background color if I chose a picture as my background but that picture didn't cover the whole desktop. I heard from a friend that in the upcoming iPhone/iPad update, the user would be able to change their background, which is something PC users have been able to do, well, forever.

It's easy to see how a business' philosophy translates into revenue for the company. Some companies care about advancing society. Some companies want to choke their customers, and when they choke a little less, they call it an upgrade.