Google Inc. (NASDAQ:GOOG) has hired Ruth Porat as the company’s CFO to help cut some of the aggressive spending habits that the company has acquired over the last decade.
Google Inc. (NASDAQ:GOOG) wants to make sure that their approach on spending money makes sense heading into the next several months and years and to do so they have hired Ruth Porat as Chief Financial Officer. The move is one that makes sense to many, as she leaves her post at Morgan Stanley, to lead one of the largest tech companies in the world into better economic times.
For some, it’s ironic and difficult to wrap their minds around – given the fact that Google is making so much money. However, it’s a sensible move for the company, which has seen their overall spending dramatically increase over the course of the last several years. That though is to be expected. Technology is an expensive business to be in, and with the innovation that is taking place – the money has to be there.
That being said, Google hopes to cut back some of their overall spending – and possibly reduce some of the unnecessary spending that ultimately has some investors worried. Her hiring isn’t really one that was made to stop spending, as much as it was to push back against unnecessary spending. In other words, Google wants Porat to be the sensible, logical, spender that the company really hasn’t had to this point. The company has been quicker to spend and throw money at ambitious projects with long-term positives, but short-term losses.
As for Porat – she has a good track record with tech companies – leading Morgan Stanley’s investment banking business with tech companies – like Amazon through the Internet boom that took place in the late 90s. This though has become a common occurrence on Wall Street since the recession and banking crisis of the last decade. As restrictions grew tighter post-crisis many investment bankers and other significant figures in Wall Street have sought refuge in the technology sector – where regulation and policing have yet to catch up to the speedy nature of the business.
It’s unclear how much she will make as CFO of Google, but it would be expected to see that given her role as “cost cutter” that she would in turn take a less significant pay rate – to protect the overall mission she comes to Google looking to achieve.