Google is under Wall street pressure. The stock dipped to $250 from high of $740 in less than a year. Roughly, it lost 66% of the market value. On top of that, analysts are reporting that on line advertising is declining. Sure, Google is under a lot of pressure and finding the ways to maximize the revenue.
Pump ads on all Google sites:
Google started displaying the ads on Google finance site(See my coverage on this) to cash its success. Sure it deserves to cash it out, but until now Google maintained some of the sites ad free. However, thats going to change it. Soon we will see the ads on all of it sites including Google office suite(Docs, Spread sheets), Google news etc. I heard that Google is already testing the ads on Google news.
Cut down the experiments and R&D:
Last week Google shutdown 2 sites Lively with the message "Lively is shutting down. Rooms and avatars will not be available after December 31st, 2008" and SearchMash with the message "has gone the way of the dinosaur". The official Google explanation for shutting down Lively.com is:
It has been a tough decision, but we want to ensure that we prioritize our resources and focus more on our core search, ads and apps business. Lively.com will be discontinued at the end of December, and everyone who has worked on the project will then move on to other teams.Its surprise to see Google products seeing the dust due to the resources. Sure, Google is losing work force, hence the resource prioritization.
Layoffs,
Google and its search business are not recession proof. Since August, Google has been laying off staff and the number could be up to 10,000 jobs. There are reports that about 500 of them were recruiters for Google. According to a CNET story:
Google spokeswoman Jane Penner didn't share too many details Monday, such as how many contractors are affected, whether contracts are being canceled or just not renewed, how many contractors Google will hire, and over what time frame the changes will take place.
"We have 10,000, and we have had a plan in place for awhile to significantly reduce that number," she said. "This is something we've been thinking about for awhile--six or seven months. It predates the most acute phase of the (present economic) crisis."
There is no doubt Google is not immune to the economic downturn and with the slowdown in online advertising, their honeymoon is over. Troubles are just beginning at Googleplex.
Update: Changed heading to reflect my intention of "layoffs could be as many as 10,000". Just to clarify, layoffs number is not confirmed by Google or anyone.
4 comments:
You say: "Since August, Google has been laying off staff and the number could be up to 10,000 jobs." Likewise, your subhead reads: "Layoffs, layoffs - 10,000 layoffs". Did you not understand the passage you cite from the CNET article, in which Google spokeswoman Jane Penner says, "We have 10,000, and we have had a plan in place for awhile to significantly reduce that number"? She means that Google has a total of 10,000 employees ... and while I suppose they might be planning to lay off every single employee, somehow that seems unlikely.
I'd like to think that Google is better then such claims. Reduction in work force after projects complete is a good process. Lively, although fun to use sometimes, wasn't the best interactive environment and had the tendency to crash ALOT. Taking out your computer in the process. I suspected Lively to close down just from uselessness. It's a fun toy, but not currently a revenue source or new concept/technology.
And stocked priced at $700+ a share perhaps was just a little over priced. Why must an innovative company that made its mark not centralized around maximizing revenue but R&D and new technology now stop producing its Cash Cow "The Labs."
I can go to other search engines,
But I choose to go to innovators.
All of you got it wrong. Google is NOT laying off employees. The actual quote can be found here: "Brin said Google augments its workforce of 20,123 employees with about 10,000 contractors... has a plan to significantly reduce that number [of contractors, not of employees!] through vendor management, converting some contractors to regular employees, and other approaches."
Thanks for providing accurate numbers and specifying who is actually due to lose their spots. I should have said that "Google has a total of 10,000 contract employees," although my point was really that (despite the slightly hysterical "up to 10,000" conjecture in the original post) the number to be laid off was less than the total given.
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