Google Inc. (NDAQ: GOOG) finally appears to be showing signs of slowing down after the economy has come to a virtual halt. The search giant announced that it would make fewer acquisitions and slow hiring amid the global economic turmoil. The slowdown comes after news that more advertising budgets are under stress and Google has opted to take a more conservative stance. Last quarter, Google's profits slumped to their lowest levels this year as some advertisers cut back on ad space to reduce costs.
Newspapers have been hit the worst as Google has remained relatively immune to the downturn thanks to a move from offline to online advertising. However, now that the move is slowing, Google is starting to feel the slowdown. Google shares have fallen some 45% this year on investors' concerns that the weak economy will hurt ad sales, which account for the vast majority of Google's revenues. Some are predicting that the global credit crunch could cost Google $6.7 billion in lost sales through 2010.
Currently, Google handles about 2/3 of all searches made in the United States and has spent some $3.38 billion on acquisitions during the past 12 months. The company's dominance in the industry was one of the primary factors behind Microsoft's push to acquire Yahoo and consolidate their search position. Profits at the firm have risen 26% to $1.35 billion, or $4.24 per share in the third quarter. Meanwhile, Google plans to start targeting mobile phone search queries, which are growing rapidly.
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