Even the almighty Google is responding to the current economic downturn by shedding workers, reducing hiring, tightening budgets, curbing employee pet projects, and trimming the notoriously generous amount of perks it offers to employees. These multiple perks include free physician care, free meals, laundry facilities, volleyball courts, and subsidized personal trainers. In the New York office, Google has recently cut back on the hours its free food service is open, and dispensed with the traditional afternoon tea. (Are we on a cruise ship?) Darn, now I'll never know how a Google tea party compares with one at Alice's Tea Cup!
Of course, not all of Google's slower revenue growth this year is purely a result of the recession. Just as with other companies, rapid growth isn't infinitely sustainable and has to reach a peak at some point, and revenue has been falling for a few years anyway. There's also more competition for the world's most popular search engine. According to the WSJ, Google's boom years were mainly coming from sales of search ads, the small text ads that are displayed next to search results.
Engineers were previously allowed to spend 20% of their time pursuing pet projects in order to develop new products that would reduce Google's reliance on selling these ads associated with online searches. But many of Google's new products haven't generated significant revenue and so the search ads still make up the bulk of their revenue. This failure to find other revenue sources -- and the weaker online advertiser spending that is affecting all media -- have Google heads concerned and shifting towards stricter management policies. Read more here:
http://online.wsj.com/article/SB122826503489174369.html?mod=testMod.
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