Despite Deep Recession, Google Plows Forward
Google Makes Money; No News There
Despite being embroiled in the middle of the worst global recession of our generation, internet giant Google continues to make money although not at the feverish pace of just a few years ago. Still, with its income up by 8% in the first quarter of the year, the company is in an enviable position.
As usual.
Once Again Google Performs Admirably
Analysts had been expecting Google to taper off, but the first quarter figures show that if any company can weather the current storm, then that would be Google. Revenue did slip compare to the fourth quarter of 2008, but given that the worst of the recession didn’t settle in until after the first of the year, Google’s performance is admirable.
Google still makes a big bundle off of AdWords (advertisers) while not quite a few webmasters are still raking in big bucks with AdSense (publishers). Google’s advantage is that the company basically owns web search which allows it to serve up ads to most everyone who logs on. Given that its algorithm is almost always spot on, Google remains an attractive and relatively cost effective way for businesses to get the word out.
Chairman Eric Schmidt Speaks
Relating to its most recently quarterly performance, Google Chief Executive Officer Eric Schmidt had this to say: “Google had a good quarter given the depth of the recession–while revenues were down quarter over quarter, they grew 6% year over year, thanks to continued strong query growth. These results underline both the resilience of our business model and the ongoing potential of the web as users and advertisers shift online. Going forward, our priority remains investing for the long term to drive future growth in our core and emerging businesses.”
Has Google’s Ad Income Peaked?
Some analysts fear that Google’s ad income may have peaked, but we’ve been hearing them say this for years. Clearly, advertising dollars are harder to come by, but given that newspaper advertising continues to dry up and internet traffic is still expanding, I’m sure that Google will find a way to keep moving forward. Should the economy begin to recover this year, then advertisers will come back, adding more fuel to the Google fire.
What About Twitter?
It is no secret that Google is interested in buying Twitter, given that site’s rapid growth and its threat as a search engine. Personally, I have found that using Twitter Search yields some amazing results, a great way to connect with people who are discussing topics of interest to you and in real time too.
Though I don’t use Twitter Search as much as Google Search, even an incremental shift by users can shift search traffic.
Google will pay handsomely for Twitter and they’ll figure out a way to monetize the site. I could see Google incorporating the feature’s of Twitter Search into its own toolbar, but I also could see them leaving Twitter alone and running ads along the side of these results. Maybe Google would do both.
Returning to Their Roots
As far as the rest of the web is concerned, the other internet giants will continue to work to make their business models more efficient. Now that EBay has sold StumbleUpon and has an Initial Public Offering (IPO) in the works for its Skype internet telephony unit, they’ll be returning to their core business of managing online auctions and internet retailing.
I expect that other businesses will be doing the same thing — dumping unrelated subsidiaries to concentrate on what they do best. In this economy, returning to your core seems like the wisest (and safest) move to make.
Tags: AdSense, advertisers, advertising, AdWords, business, eBay, Eric Schmidt, Google, initial public offering, publishers, recession, Skype, StumbleUpon, Twitter, Twitter search
Technology | Matthew C. Keegan, 17 Apr 09
By GregR, April 17, 2009 @ 11:45 am
I actually think that Google has told twitter that they are interested BUT they need to come back with a good path-to-revenue plan and it can’t just be nailing Adwords to Twitter. I think that Google is the only game in town for Twitter as there is no silly money forth coming from Yahoo or Microsoft or any of the large web property companies. Murdoch has his own problems as does Diller and they dont look like obvious synergy plays.
My guess is that Google knows they are the only game in town and are waiting for Twitter to step up and prove their worth to the Google Empire
GregRs last blog post..The Story of Christian the Lion (Video)
By Matthew C. Keegan, April 17, 2009 @ 11:50 am
Greg, I agree with you. Twitter’s worth may be grossly exaggerated — the site may be attracting many new followers, but monetizing it won’t be a simple thing, especially with the Twitter Search being the only way to do that. Of course, slapping an ad in one corner of the profile page could do, but given people’s aversion to this sort of practice, I doubt that it would stick.
Mostly everyone else is broke, pre-occupied or simply not interested in Twitter. If Google doesn’t step forward we may see more “fail whales” than before, perhaps crashing down the Twittersphere.
By Mihaela Lica, April 20, 2009 @ 2:20 am
Twitter is Google’s evil cousin in my view. I have to explain this in an in-depth blog entry.
I have a few possible monetization ideas for them, but I am tired of giving these people free advice. The problem is that every time you give them “free advice” they implement it, do it wrong and they never give credit where due.
Mihaela Licas last blog post..Burke & Company Take On PR for Mattern & Associates
By Matthew C. Keegan, April 20, 2009 @ 4:58 am
LOL. I never knew that Google had a bad relative…I thought that they had the part of the internet all to themselves.
Twitter definitely needs a lot of work, monetization being one thing. The “fail whale” problem is the other thing plus I’m not particularly impressed that so many mainstream or celebrity folks are gaming Twitter to their advantage.
We’ll see how they work out…they may eventually implode!
By Paul, May 1, 2009 @ 5:22 pm
I wonder if some other search engine will ever be more popular that Google. Additional services, which are provided by Google are the key to its success.
By Matthew C. Keegan, May 4, 2009 @ 4:37 am
I wouldn’t rule that out. I was reading recently about a new search engine, Wolfram Alpha, that is expected to change the playing field when it launches later this month. Specifically, Wolfram reportedly stores and responds to information in same way a real person would. For example, if you want to know the distance between New York City and Miami, you’ll get the precise answer backed up with the proper sources as well as supplemented by charts and graphs.
By hhautomation, May 13, 2009 @ 5:55 am
nice tips.I think that Google is the only game in town for Twitter as there is no silly money forth coming from Yahoo or Microsoft .
By Matthew C. Keegan, May 13, 2009 @ 6:20 am
Neither Yahoo nor Microsoft seem to be in much of a position to snap up Twitter, especially if either one of them gets in a bidding war with Google. Yet, there is no solid evidence that Twitter plans to sell, at least for now. Perhaps when the economy begins to improve they will.
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