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Google not afraid of economic storm
Thanks to spreading its wings

By Reuters

Published: Tuesday 18 March 2008

Google, the world's leading search engine, has said it was well positioned to weather any economic downturn as its advertisers were broad based.

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Google chief executive Eric Schmidt acknowledged sliding share values and a shortage of credit in financial markets was "a very serious issue" and that many people were expecting a global economic slowdown.

Schmidt told reporters at a briefing during a visit to Sydney: "It's too early to say if there's [already] been any specific impact but if there were I don't think it would be much."

He said: "We believe that if there were [a US recession], we'll be well positioned. We're not particularly dependent on any particular one market. There's not a lot of advertising for any one market over another."

Direct marketing, a successor to online marketing, had historically performed well in times of economic recession, Schmidt said.

Schmidt said: "There tends to be a flight in a global slowdown to higher-quality advertising and higher-quality advertising is determined by what sells."

Google, which earned $4.82bn in revenue in the fourth quarter, makes around 98 per cent of its income from text ads but was exploring new formats, such as advertising on YouTube videos.

Google has a $900m, three-year deal to sell advertising to News Corp's MySpace customers under which it must pay MySpace whether or not it makes money selling ads on the site.

Shares in Google, which traded near $750 in November, fell 4.1 per cent to $419.87 on Monday.