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Google and the Economy

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Google and the Economy

Google releases their Q2 earnings today.  It will be interesting to see how their results will be received on Wall St. for a number of reasons. Google is one of those companies that people measure the economy as a whole against to some extent. As such, today has sort of a groundhog day kind of feel to me.  I don’t typically spend a lot of time watching economic news - even in good times, but i’ll be paying a little more attention to it today.

Google ' /> <br /> Google is expected to report their second consecutive quarter of single digit revenue gains.  Now, the economy being what it is, a lot of folks would be plenty thrilled with an any-digit gain.  Google isn’t most however.  Google stockholders are more accustomed to quarterly growth of 30% or better.  So, while single digit growth for a second consecutive quarter would be pretty good news for some, it ain’t so hot for Google.<br /> <br /> The fact that revenue growth was relatively flat again leads us to the all important ‘why’ question.  Has Bing been a factor?  Is this as bad as it is going to get for Google?  When will they get back to ‘normal’?<br /> <br /> First lets look at Bing.  Microsoft has actually managed to make some waves in the search space for the first time in as long as I can remember.  Bing was launched with a big marketing budget ($100 million buys a lot of ads), some really slick commercials, and most importantly a search product that was distinctive, effective and extremely consumer-centric.  In short, Bing was pretty cool.  As a matter of fact, they snagged almost a full half percent of search market share.  The problem here is they most likely picked up the lion’s share of that gain from the company they need to buy (Yahoo) instead of the company they need to compete with (Google).<br /> <br /> Google is so far out in front of both Bing and Yahoo in terms of market share it’s hard to imagine either one of them catching up.  Certainly not going to happen separately and even combined it would take a LOT of movement.  Google still owns 64% of search.  Yahoo has around 20% and that $100 million dollar marketing campaign and a cool new Bing has taken Microsoft from 8% to a whopping 8.5%.  In short, if the question is whether or not Bing had a lot to do with Googles flat revenue earnings, I’m no expert, but I’d have to say probably not much.<br /> <br /> The second question; ‘Is this as bad as it gets for Google’ is certainly going to be asked a lot over the next few weeks. As far as I’m concerned this is largely not even up to Google.  I think it is reasonable to look at Google as a barometer of sorts for the larger economic issues facing us today. <br /> <br /> <img src=

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