Google (NASDAQ:GOOG) Adding $1 Billion to 2011 Costs

The approximate 6,000 or so new hire by Google (NASDAQ:GOOG) will add another $1 billion in costs to the company in 2011.

Included in the $1 billion in additional expenses is the 10 percent increase in salaries the company said their workers will be getting.

Commenting on the numbers, Credit Suisse (NYSE:CS) noted that "from 2005-2010, there is a 94% correlation between GOOG's net revenue growth and the growth in its workforce, implying GOOG hires to support growth. Alternatively, if historical patterns hold, accelerating new hires could be seen as a positive indicator for 2011 revenue growth."

Credit Suisse wasn't swayed in any way by the numbers, as they maintained their EPS estimate for 2011 of $34.15.

They reiterated their "Outperform" rating on Google, which closed Monday at $614.29, gaining $3.32. or 0.54 percent. Credit Suisse has a price target of $750 on Google.

Google (NASDAQ:GOOG) Adding Over 6,000 Workers, At Least 2,000 in Bay Area

while the final breakdown of the location of the approximate 6,200 workers Google (NASDAQ:GOOG) will be adding in 2011 hasn't been broken down yet, we do know that at least 2,000 will be in the Bay area and 1,000 in Europe.

Google's senior vice president for engineering and research, Alan Eustace, said in an interview with the Mercury News, "The growth that we're seeing across a lot of different areas is really based on seeds we planted a long time ago. We made investment decisions a long time ago to plant the seeds in different areas, and the exciting part is those seeds are actually developing now."

The hiring binge will be the largest in the history of Google, and add about 25 percent to their workforce, which will rise to over 30,000 once the round of hiring is completed.

Shareholders in the past have frowned upon some of the huge numbers Google can hire in a relatively short time, so we'll probably see some backlash there. But overall, if it ultimately helps the company grow over the long haul, it should be viewed as positive.

Caution needs to be taken in response to those who are already spinning this into more than what it is. This doesn't mean some type of huge recovery step, and it won't do a lot to alleviate the huge numbers of unemployed in the region Google is based.

It's real, but when compared with the overall employment picture, is more symbolic than it is a major economic impact.

As for the future of Google, they see their growth coming largely from mobile products, and their hiring will reflect that strategy.