In accounting, Gross Profits are typically your Sales – Cost of Goods Sold (COGS). And then you subtract Operating Expenses from Gross Profits to get Net Profits. Of course, here we don’t quite have a Cost of Goods Sold because this isn’t retail, but Gross Profits should still be greater than Operating Expenses.

If you do that for AT&T, Verizon, IBM, or Google itself, they’re supposedly all operating at a Net Loss. We know that’s not the case.

Indeed, as per Google’s Income Statement on Yahoo Finance, Google only had about 6.7 billion in operating expenses.

Conclusion: Ask where in the world those numbers come from, or what they mean. Per my accounting teacher, this kind of thing means Google is susceptible to be participating in Earnings Management – a nefarious accounting practice that misrepresents the company’s real situation. In this case, the likely objective is to appear smaller and less profitable for lobbying purposes. The big banks are also known for trying to manipulate Congress and Parliament this way…