The recession, economic slowdown, or global credit crisis depending on your point of view is affecting everyone, no matter how big or expansive they are. The latest financial results from Google, covering the first quarter of 2009, show that even the search giant is noticing a change in the air.
Since going public in 2004, Google has seen its revenue grow in every single quarter. Until now. The newly-announced earnings report shows that Google revenue dropped by around thee percent between the last quarter of 2008 and the quarter ending March 1, 2009.
Google chief executive Eric Schmidt admitted the recession was a factor but was mildly optimistic that things are looking up for the company. According to CNET, he said in a conference call discussing the earnings results:
No company is recession-proof. Google is absolutely feeling the impact. We think Google is now well-placed for the recovery. The shift to online gives us a real advantage.
While the drop in revenue is important to note in terms of the economy as a whole, Google focused on the positive things to emerge from the report. Which is hardly surprising when we’re talking about a company which can bring in $5.51 billion in an economy this unhealthy.
Analysts had been forecasting much worse results due to online advertising budgets taking a big hit thanks to the recession. In actual fact, Google’s revenue grew 6 percent between Q1, 2008 and Q1, 2009. In the same period income rose from $1.31 billion ($4.84 per share) to $1.42 billion ($5.16 per share), an increase of around eight percent on the previous year.
Google has helped itself by taking measures to safeguard against the economic slowdown. The fact that this quarter showed the first decline in Google workforce (from 20,222 to 20,164) shows its intentions. Google has also reduced its use of contractors and cut a string of projects that weren’t performing as well as expected.
While many of us would love to have businesses as big and profitable as Google, even it clearly isn’t recession-proof. Just like the rest of us.