Google growth takes a back seat

Unfortunately Google‘s performance in terms of growth is not improving or increasing. Instead the growth rate continues to slow down and drop in the second quarter. What this means is that the online ad market is in a bad situation.

Search Engine giant’s revenue dropped down from 6% growth in the first quarter. In the second quarter, it fell below the 39% growth Google saw in the second quarter.

These results do not bring good news for the U.S. Internet Advertising market. It suggests that it will take time for the market to rise again to the desired level. Market research firm eMarketer predicts that U.S. online advertising will show a 4.5 growth for the current year (2009).

Eric Schmidt, Google’s Chief Executive in a conference call stated that the results were good keeping in mind the current recession scenario. In a cautious manner, he stated

it is too early for us to tell when the recovery materializes.

However the Californian based company’s profit increased about  19 percent. Schmidt further identified that some advertisers marketing their products in certain areas/categories were recovering. The categories which showed a positive trend include shopping and travel.  However fields such as finance still remain on the weaker side. Sticking to the positive side, Google has managed to perform rather outperform its competitors such as Yahoo and Time Warner‘s AOL even in the economic downslide.

Google in order to manage this slow growth rate might need to consider and perform cost reduction activities. That is what we have observed as Google has released 300 employees, closed a few engineering offices and has delayed its expensive projects like finishing and completing its new data center.

Google continues to invest in new businesses for instance online software for businesses and bringing advertisements to cell phones.

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