That's a weird bar to set. Why does productivity depend on net new products? Why can't companies with cash cows spend effort on figuring out how to grow that cash cow and boost their revenue that way instead?

Is it? I can name other companies that have released successful new products.

If you're just aqui-hiring or buying successful products what does that say about your internal culture? Are you super focused on only your primary product, or are the people you've hired kind of not "new product" innovative?

I guess a lot of people think Google/FB == innovation, and they are without a doubt highly innovative, but when it comes to products I'm not really sure that they are. I think most of their innovation comes from improving what they currently do, not really expanding into new markets or with new products.

Maybe I'm wrong? What do you think?

Well, maybe? I guess a couple of things:

1) Innovation doesn't have to be in creating new products, and can very well be in incremental improvements to existing products.

2) "new products" also doesn't need to be externally visible. There could be lots of innovation but just for things that aren't visible to customers.

Netflix hasn't come out with a new product since streaming started. But there are definitely a lot of new things that are built that are at least arguably innovative.

Google Cloud has $10b / year of revenue and hardly existed five years ago.

Is it profitable? Revenue means nothing without profitability.

What does it matter when advertising revenue has more than doubled in that short time period? If you're good at one insanely profitable thing and you're making money out the wazoo with it, who cares?

For Google, the Pixel phones?

That doesn't entirely get by the acquisition test. Google acquired the HTC smartphone design team for $1.1 billion.

See https://www.theverge.com/2018/1/30/16949366/google-htc-smart...

The first Pixel phone was released in 2016. Your linked article is dated 2018.

It does also say: "Google worked with a subset of its new HTC hires on a contract basis for the Pixel and Pixel 2".

This suggests they at least partially outsourced the work initially and then acqui-hired their way into in-housing it.

Though, yes, it is possible that some of it was done in-house from the beginning. Just because they leaned on external resources to some extent doesn't mean they developed no internal capability on their own.

The requirement was financial success, not money pit.

Name a billion dollar company that was income positive 5 years after it was founded.

If I remember correctly, FB was profitable within 5 or 6 years of its founding.

Why five years? I'm pretty sure both of those companies had offices before then

You're welcome to go back further, but it's mostly commentary on the current state of those companies. Google / FB / others have become significantly less innovative as time has proceeded. They are almost entirely driven by their core product (with little changes, despite comments suggesting incremental innovation - not enough to justify thousands of devs) and acquisitions. Others, like Apple and Microsoft, seem to be more willing to innovate internally.

Plenty of $ positive launches happen that way.

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