Internet Search mammoth Google beats the economic downturn in the first quarter, posting an 8.9-percent rise in profits as revenues climbed 6.2 percent. Revenue fell 3% for the quarter versus the fourth quarter of 2008. But, for the year, revenues were more. This were partially due to some cost cutting measures taken by Google.
Google reported first-quarter revenue of $5.51 billion, up 6 percent from the year-ago quarter but down 3 percent from the 2008 fourth quarter — its first ever sequential decline. Net profit for the quarter ended March 31 was $1.42 billion, or $4.49 cents a share, up from $1.31 billion, or $4.12 a share, a year earlier.
Google executives said lower labor costs, as the company reset performance based bonuses for the new year, kept expenses in line. And after several years in which Google expanded its workforce, the company’s headcount declined slightly in the first quarter to 20,164 employees worldwide. Google announced three rounds of layoffs in the first quarter, although the 200 sales and marketing job cuts announced in March were not reflected in the latest headcount.
We can say that recession has made an impact on Google’s earnings. Also users are trying to first research and then shop carefully online for products. The paid clicks went up 17%, but Google’s revenue didn’t increased from these click. Because, advertisers reduced the bids they make for keywords in Google’s auction-based advertising system.