GOOGLE'S MAIN MAN in the UK has told Channel Four News that even the world-conquering Internet company is not immune to the effects of the current economic downturn.
The search giant generates most of its revenue from advertising
which, unfortunately for Google is one of the first industries to suffer when the economy goes to ruin.
Nick George from Pricewaterhouse Coopers is optimistic however,
saying that online businesses such as Google will continue to do better than traditional media, despite the fact that the company's growth has slowed to just 30 per cent from a high of 85 per cent in 2006.
Google is rapidly expanding into new areas, such as mobile
phones – however this is also a section which relies
on advertising money, so is Google putting all its eggs in one
The firm's UK vice president, Dennis Woodside said not, claiming that because more and more people are online now, Internet businesses should have nothing to worry about. He cited Marks and Spencer as an example of a company which has experienced losses on the high street but a 40 per cent rise in internet sales.
"You’re still seeing online growth, the consumer is online, they’re searching more… and that helps out business”, he explained said on the box this lunchtime.
Woodside also claimed that Google is completely on top of its finances. Even though shares are down, he shows no concern as more people begin to live online, "As growth becomes harder to come by we think businesses will invest more online… when budgets are cut, we’ll be in good shape," he explains.
The Google VP also remains optimistic about the future of all online business – he doesn’t believe anyone will really get hurt that badly as people remain online. "That trend is going to continue through any kind of downturn".
With technology prices dropping it’s becoming increasingly easy to set up an online business with very little capital outlay as Woodside explained. "Small stores can reach a UK or even global audience in a relatively inexpensive way. You can basically do that, almost for free today”.
So, why would Google have the need to diversify its efforts into other things, such as the mobile business if the search giant is still at large?
"Google wants its customers to be able to access the internet wherever they are – so this is the most logical next step for the company." µ
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