Slightly deceptive title, but while they’re not in trouble of going bankrupt or anything, I’ve got a feeling in my gut that Google is either feeling the pain of the economic downturn or is just trying very, very hard to protect themselves from it. Yes, they just released very positive earnings yesterday showing better than expected revenue and profit. I’m also expecting 4th quarter to beat expectations too, especially if they go ahead with the Yahoo deal.
However, there has been news and statements made by the company that makes it seems as though they are trying very hard to keep profits up to par with investor expectations. Below is a short list:
- Google Cutting Back on Dinner and Free Snacks
- Increasing the Costs of Child Care
- Allowing Gambling Advertisements in the UK
- Statements made by Google during the Q3 earnings call about hiring more responsibly and that with the current economic situation, they’re entering into “uncharted territory” and are keeping “a very close eye on costs”
- They also seem to be letting advertisers have more free reign than usual, allowing the marketplace determine who gets listed rather than Google’s quality standards
Overall, I think all of these changes are for the better for investors and advertisers. Growth rates might be slowing, but there is still strong growth in search. Analysts have previously said that since Google’s revenue is so reliant on search, it could cause financial trouble for the company, but I think their excellance in search is actually what’s keeping them growing faster than most other companies. They might start feeling the pain of a poor economy and have some financial trouble, but it will be much worse for their competitors if it does happen.
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