There comes a point when even the wives of oligarchs make a show of knitting their own stockings to match the spirit of the times. So Google has dutifully displayed austerity. A few experimental services have been cut and, as it is hiring fewer people, 100 recruiters got the boot.
That reflects a moderate slowdown in Google’s business. Fourth quarter revenues grew a mere 25 per cent to $4.2bn, compared with the 50 per cent pace of a year ago. Even so, with profits of more than $6bn last year, Google still sits on the golden goose of internet search and knows it, blithely repricing staff stock options to reflect its beaten-down share price. For reliable growth in a downturn it has no peers. But everyone else knows that as well, hence a 20 times earnings multiple. Until that growth rate picks up again, there is no reason for Google’s shares to do the same.
