The recession's passing, says Google

Google's profits are up and it's saying the worst of the recession is over. But should we listen?

Last Updated: 31 Aug 2010

Those canny tech folk at the Googleplex will be dousing their beanbags with Champagne today - the web giant has just posted quarterly profits of $1.64bn. That's its highest ever profit figure, and up 27% on this time last year. Revenue for the three-month period hit $4.38bn - way ahead of analysts' expectations of $1.29bn.

The news follows Intel's chipper announcement earlier in the week that the PC market was exiting the recession, after it too posted profits that beat expectations.

Of course Google has always been in a pretty strong position - it's one of the world's coolest brands, with a global reach and no major competitor now that Yahoo's challenge has practically imploded. But even it has had to fight for its impressive figures. Google has worked hard to scale back programmes, close offices, and rein in its spending, even cutting back on its renowned professional chef-staffed cafeterias. Heaven forbid they should have to eat sandwiches like the rest of us.

But does a few extra million on the balance sheet of a global powerhouse really mean the worst of the recession is over for everyone else? In Google's case, quite possibly. Its search engine sits at the centre of the web's largest advertising network, and so it acts as a measure of other people's fiscal confidence. And Google says the number of paid clicks, including clicks on advertisements on Google and partner sites, was up 14% from the same period last year. In other words, people are spending.

That said, we shouldn't get too carried away. Google is more of a global bellwether. With a footprint around world, it can pick up work in areas that are doing well, and remain well insulated against harder times elsewhere. Just because it can survive like this, doesn't necessarily mean the queues at the local job centre will be getting any smaller.

But Google's chief exec Eric Schmidt certainly has the mood of someone who's focused on brighter times. He's back talking about taking on staff, trying to develop the ‘perfect search engine', and even eyeing acquisitions ‘both large and small'. The real measure will of course be whether the lunch menu continues to feature seared day-boat scallops in green curry sauce.

Find this article useful?

Get more great articles like this in your inbox every lunchtime