Posts

The crisis does not affect Google

There are businesses that the crisis does not affect Google is one of them.

Google last week presented the results of the third quarter of 2008 and announced a profit of 1,006 million euros, up 8% over the same period last year.

Motor revenues amounted to 4.1 million euros in the 3rd quarter 2008, representing an increase of 30% over the same quarter, but the year before. Operating profit for this quarter was 1.2 million euros, 31% more than the same period of 2007.

This increase shows two things:

  • Google's good health (compared to the economic problems facing Yahoo)
  • The good health of online advertising.

Google's good health is due in part to its ability to attract users beyond its search service, for example, in Gmail, Google Maps, Blogger, YouTube and other services offered by the search engine. As Eric Schmidt said in the same statement referenced by this news, long he has played in its favor and is paying off ...

"While we are realistic about the weakening global economy, we continue to manage Google for the long term, implementing improvements in both searches and applications, while invest in the growth of business-related or mobile areas".

The good health of online advertising is partly due to two factors:

  • Advertising is countercyclical (if the crisis does not last long), as companies are lowering their sales and decide to seek new channels through which to sell, new public and generally decide to invest more in advertising.
  • Online advertising is much more efficient than offline advertising. Consider, for example, all you can do a business with an advertising budget of 2,000 euros and the results you get if online investing. Instead, the same budget invested offline does not give practically anything ... hence investment in online advertising is increasing rapidly.

To corroborate this last statement I refer you to an interesting article by Juan Varela, you can read here:
http://www.soitu.es/soitu/2008/09/24/sociedadcableada/1222274960_720622.html

Additional information: