Google sales finally feel impact of economy

The fall in advertising revenue has resulted in the first drop in quarterly sales for the first time since its incorporating as a public listed company.

The recession has had an impact on slower profits and sales, as users of the search engine are not clicking on ads as often. As a result, sales in the first quarter reached $4.07 billion, although analysts had predicted sales to be closer to $4.1 billion.

Chief Executive Officer, Eric Schmidt, admitted that the recession is still uncharged territory for the company and as a result cut backs are being made in research, marketing and side projects.

Advertisers are, in turn, spending less money online, particularly in the financial and motoring sectors. However, despite the 3 percent fall in Google’s Adsense the company has become more efficient with the operating margin increasing by a further 1 percent.

Google has proved to be very robust in the current financial turmoil and has managed to post an 8 percent annual increase in the slowdown, with only 58 jobs being cut out of the 20,000 staff employed by the company.

Google’s monopoly of the market keeps growing, with the US market share at nearly 64 percent meaning that the company is still able to grow.

Discuss this in the Finance Markets forums

Story link: Google sales finally feel impact of economy