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Monday, January 26, 2009

Google remains profitable despite earnings drop

Google impressed investors this week posting a significant profit during this past quarter. The company managed to pull in a $382 million profit despite of the adverse economic climate, beating Wall Street estimates. This includes some heavy financial setbacks after investing in Clearwire and Time Warner.

However, even mighty Google is not immune to slumping markets, something the company has discovered first-hand in recent days. The search giant, while still strong overall, posted a significant drop in profits with Q4 ending 68% lower than the year prior. What's more, the company itself sees troubled times ahead. Recently they laid off a significant number of employees and axed several services showing their willingness to cut up their business if needed.

If their profits continue to drop, you can expect more of that to occur. Probably not YouTube, despite it continuing to be a money sink, but other services may not have the benefit of popularity to protect them. Many of us use Google services on a daily basis, knowing full well that they remain free because Google turns a profit on advertising. What else will Google find expendable?


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