Google isn’t on the blink after results

Apr 18 2009 by Andrew Mernin, The Journal

Search engine giant Google has reported its worst sales figures in its five-year history as a public company. Andrew Mernin finds out whether the digital giant’s downturn is a sign of darker times ahead.

BUSINESS leaders foolish enough to assume their empire is recession-proof may have been forced into a rethink this week after seeing a seemingly invincible behemoth get shot and wounded.

Internet search giant Google – a colossal brand familiar to virtually every internet user on the planet – proved it is not untouchable as it posted its worst revenue performance in five years.

Google, which owns YouTube, gained £3.7bn in revenues during the first three months of 2009 – 3% below the previous quarter and its first quarter-on-quarter drop.

Although Google was still 6% ahead of the same period last year, it is also the first time that year-on-year growth has dropped to single digits since its stock market launch in August 2004.

Of course the chink in Herculean firm’s armour is not life-threatening – its results beat analyst expectations, while its online dominance puts it in a far better position than most other advertising-based businesses struggling to weather a global slowdown.

However, the very fact it sustained recession-related injuries could have sent shockwaves across the real and virtual world as what started as a storm in a banker’s teacup spirals into a full-blown hurricane to which no one is immune.

As well as economic headwinds, Google’s revenues were hit by the increasing strength of the dollar against major currencies over the past year.