Google : Ready for an Economic Downturn

Google Inc (GOOG.O: Quote, Profile, Research), the world’s leading Internet search engine, said on Tuesday it was well positioned to weather any economic downturn as its advertisers were broad based.

Google Chief Executive Eric Schmidt acknowledged sliding share values and a shortage of credit in financial markets was “a very serious issue” and that many people were expecting a global economic slowdown.

“It’s too early to say if there’s (already) been any specific impact but if there were I don’t think it would be much,” Schmidt told reporters at a briefing during a visit to Sydney.

“We believe that if there were (a U.S. recession), we’ll be well positioned. We’re not particularly dependent on any particular one market. There’s not a lot of advertising for any one market over another,” he said.

Direct marketing, a successor to online marketing, had historically performed well in times of economic recession, Schmidt said.

“There tends to be a flight in a global slowdown to higher quality advertising and higher quality advertising is determined by what sells,” he said.

Google, which earned $4.827 billion in revenue in the fourth quarter, makes around 98 percent of its income from text ads but was exploring new formats, such as advertising on You Tube videos.

Google has a $900 million, three-year deal to sell advertising to News Corp’s (NWSa.N: Quote, Profile, Research) MySpace customers under which it must pay MySpace whether or not it makes money selling ads on the site.

Shares in Google, which traded near $750 in November, fell 4.1 percent to $419.87, yesterday.


About theultimaterenaissance

I am an Engineer and a Management Graduate. I love writing poetry and research reports on cars. Surfing, listening to music, and Reading and writing Technical & Research papers are among my most savored hobbies.
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2 Responses to Google : Ready for an Economic Downturn

  1. Hi ,Its interesting to go through your site which really has great information on Economic growth using online market research.Online market research is now big business and for the average person it can be a fun, interesting and a possibly rewarding way to get your voice heard and share your opinion.

  2. Shantonav Sen says:

    Going thorugh this article and seeing what Google has done in recent times, I feel you have done a good analysis. Recently Google has announced a job cut of 25% of employees from its advertising company DoubleClick
    Today gloabl market is very much volatile, and US ecomony has a big impact on the world and now that the “R” word is pretty much up in US, i guess we will get to know more such news in recent future. What I al particularly interested is in US presidential elections and how they can tackel this unavoidable recession.

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