Google cites economic downturn as growth factor

18 Jul 2008

Google’s Q2 financial results were a bit of a mixed bag this time around with a 39pc increase in revenue year-on-year for the quarter ended 30 June, while on the other hand Google’s source of revenue through advertising with Paid Clicks and AdSense had actually decreased respectively by 1 and 2pc since the first quarter of 2008.

Google said all is well, and who can point out any different because the company never released projected sales or revenue figure prior to the Q2 results. In fact, Google said it is doing better than okay and this is because of the ‘Wal-Mart effect’.

The economic downturn is doing wonders for the company because people are watching their wallets and doing more bargain hunting and shopping online, said chief financial officer, Hal Varian.

The decrease in revenue through display advertising is the result of a choice made by the firm to control the quality of AdSense by being more choosy in who its clients are, said Jonathan Rosenberg, the SVP for product management.

“As we continue to focus on innovating in our core business of search, ads and apps, we also look forward to enhancing the experience of our users and expanding the reach of our advertisers and partners with new technologies and formats, particularly as our integration of DoubleClick gains momentum and creates new opportunities in display advertising and elsewhere,” said Eric Schmidt, CEO of Google.

So while Google reported revenues of US$5.37bn for its second quarter of 2008, the company’s stock plummeted by up to 11pc following announcement of the results, before settling at an 8pc drop.

By Marie Boran

Pictured: Life’s a beach Google tells us (employees at play outside Google HQ)