As Goes Google So Goes The Economy?
Forbes just published a piece about “Google as Economic Barometer”. It has some merit and a lot of details. Basically stating “Investors searching Google’s fourth-quarter earnings may see clues about the state of the Internet ad business, the economy and the future of the company itself.”
Dropping various products like Print Ads, its Twitter-like application Jaiku, and Lively a Second Life clone, reflects a tightening of its bottom line. Firing 100 recruiters (and the implied drop in future hires) and the closing of its offices in Sweden and Norway, as well as a newly opened one in Austin, Texas are also the actions of a company trying to improve its numbers. The cutting of 20 engineers cuts a little to the heart of the company’s operation.
In a recent discussion with a Google Adwords employee I found out it is going even deeper. Apparently budgets for entertaining top level advertisers have also been cut back. Guess now that they have them spending money there is no need to spend as much in appreciation.
To me this reflects a lack of foresight. Google has hit a wall. Those year over year double digit growth days are gone. They have become the major resource and there are not that many new clients to acquire.
Increasing what is paid for the clicks has been a careful balancing act that may not bring in as much revenue as it will lose them clients. That ban on gambling ads to stand as a “No Evil” stalwart lasted just as long as it took Yahoo to start taking money in countries that allow gambling.
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