Google 'slow growth' and 'falling sales'

Published on Friday 17 April 2009 21:23

ECONOMIC headwinds and a strong dollar have taken their toll on search engine giant Google with the group suffering its first quarter-on-quarter drop in sales.

While revenues in the first three months of the year topped $5.5 billion, 6 per cent higher than a year earlier, they were 3 per cent down on the last quarter.

It is also the first time that year-on-year growth has dropped to single digits since Google's stock market launch in August 2004.

Net profit for the quarter came in at $1.42bn, up from the $1.31bn posted a year earlier.

The results were better than many on Wall Street had been expecting.

However, Google chief executive Eric Schmidt admitted the firm had been affected by the economic downturn."We are in uncharted territory economically and Google is, absolutely, feeling the impact," he said.

The group said revenues would have been $429 million higher in the first quarter of 2009 had exchange rates been on a par with a year earlier.

Revenues from the UK totalled $733m – accounting for 13 per cent of overall sales in Q1. This compares with 15 per cent a year ago.

Google also reduced its workforce for the first time during the first three months of 2009. The firm employed 20,164 staff at the end of the quarter – 58 fewer than December – and recently announced plans to cut 200 sales and marketing staff.

The group was founded by two computing science graduates, Larry Page and Sergey Brin, in 1998 – originally running the business from a garage. The duo are now presidents of the firm, which has grown into a global behemoth.

Schmidt added: "Google had a good quarter given the depth of the recession."