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Google Associate Product Manager Interview Question

I interviewed in Mountain View, CA and was asked:
"What is the marginal cost of a gigabyte in gmail?"
Tags: google, gmail, marginal cost, product management
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Answer

Part of a Associate Product Manager Interview Review - one of 3,037 Google Interview Reviews

Answers & Comments

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I had no idea what marginal cost is but after a lot of hints, I finally came up with 1$ / a gigabyte though that's probably on the low end. The right answer is probably a bit higher, say 2-3 $ / a gigabyte (from the costs of servers, disk space, maintenance, set up of servers, maintaining webpage, designing user interface and then offset by the advertisements and click-throughs)
- Interview Candidate on Mar 18, 2009
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probably even less than that now.

http://thenextweb.com/2009/11/11/data-quarter-price-googles-plan-chrome-os-storage/
- Reviewer on Dec 18, 2009
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Isn't marginal cost the cost to produce an additional unit? So costs like designing the user interface, maintaining the webpage (which would have to be done no matter the gigabyte capacity) shouldn't be accounted for.
- anonymous on Jan 13, 2010
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Ah, you clearly would have made a better candidate than I have. Like I said, I didn't know what marginal cost was so I just came up with a ballpark figure.
- Interview Candidate on Jan 14, 2010
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Here's my guess at what they're looking for. Marginal cost - this is the additional cost for adding a user. It doesn't need to take in to account the software development effort, but it should take out the atomized cost for everything else.

You need to price out the the cost of the enterprise HD/GB. We can call it $1 by GB. Then you need to realize that there needs to be redundancy, so at the lest we need to double that number, if they put a super high value on data retention triple it.

Then you need to think about server cost and divide that out, server rack space cost and physical rack area...etc.

So if it's $1 for the actual HD space it's probably more like $2.50-$3.50 for the total marginal cost.

I don't work for google, but my guess is that they're looking at the though process. What will change with a marginal user increase and what will not. If you only think of the cost of the HD then you're not getting a job with google.
- Jon on Jan 22, 2010
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The simplest answer is to look up the Amazon S3 costs (currently platoing at 5.5c/GB) and assume that the economics are fairly similar.
- Alex M on Apr 6, 2011
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To correct my own post - these are per/month prices. So the eternal retention prices would be ~50 times higher, which gives us the same figure as Jon's.
- Alex M on Apr 6, 2011
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Considering the money they make per account signed up with gmail, I'd say they definitely make money per gigabyte spent for gmail, but I'm not sure how much.
- Anonymous on Aug 23, 2012
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I never worry about the capacity of my gmail account, it seems to me the cost of an extra gig of gmail storage is zero. As it is the mission of Google to make sure every users always have enough storage capacity and Google is doing a great job in this area, so the maginal cost of a gigabyte in gmail should be zero.
- Rose on Aug 24, 2012
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If it was a cost, Google would not exist. When analyzing costs, and especially marginal cost, one must consider all aspects. Once one considers the return too, the cost goes into a negative
- zaheer on Aug 24, 2012
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The marginal cost of adding a gigabyte is either zero or thousands of dollars.. Either the gigabyte is already physically in existence or you would have to build a new server. The marginal cost is not averaged across all gigabytes. There might be a minor increase in energy consumption due to this extra gigabyte, but who will notice that? If your goal is to stand out in an interview, I would suggest going the Thousands of Dollars answer. For those non computer guys out there, let's relate this question to something physical.. What is the marginal cost of adding one more person to an airline flight.. Their are two situations, the plane in not already full so we can essentially neglect the cost of the additional passenger since it is so low.. (The extra energy to move the 200 pounds, when the plane is already moving hundreds of thousands of pounds, and the 25 cents for a soda..) But if the plane is already full, then the marginal cost of one extra passenger is the cost to fly a second plane.. Thousands of dollars...
- Steve on Jan 16, 2014

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