Google Staves Off Crisis

On January 22, Google released its financial results for the last quarter of 2008. In one of the most difficult economic environments ever, this financial statement from the Web’s undisputed leader was highly anticipated, especially after Google was forced to layoff many employees, close several offices around the world and separate itself from some its less profitable ventures (Google Notebook, Catalog, Dodgeball and Jaiku).

According to American GAAP accounting guidelines, Google’s revenues increased 18% compared to the fourth quarter of 2007, and increased 3% compared to the third quarter of 2008. Even in the midst of the current financial crisis (which began in September), Google has still managed to increase its revenues!

The breakdown in net income (-70%) is due to a revaluation following a decrease in certain assets tied to Google’s investment in AOL and Clearwire, with a value of over one billion dollars.

What really stands out when reading these financial statements is the contrast between the Mountain View giant’s stock trends and its recorded performance. Indeed, if the stock has increased by 6% at the time of the announcement (to 324.8 dollars), it is already back to a surprising state of stagnation, and very far from its historic peak attained not long ago of more than $ 600.

Yet, Google ended the year with over 8 billion in cash and cash equivalents, the net income recorded by its operational activities having increased 35% compared to 2007. In other words, while the economy endures what has already been called its worst crisis in history, Google was able to maintain its growth and increase the income related primarily to its advertising activities.

Though this crisis could be devastating on many levels, it could reinforce the importance of the internet. In an era where budgets will be hard to come by and where every cent invested will need to be justified, the ability to reach a colossal audience while having precise measurements on your return on investment could become the deciding argument in favor of a migration of budgets towards online activities, versus offline.

In this regard, Google’s financial health will serve as an indicator throughout this period where instability renders all predictions quite random.

Tourism, Internet and Customer Loyalty

Yesterday, Yves-Alain Schwaar, Consulting Director for IC-Agency, hosted a workshop about the impact the Internet has had on the rules of customer acquisition and loyalty. Organized by Ecole Hôtelière de Lausanne (EHL) and its research department, this event incited a great deal of interest from the audience, which consisted of directors and executives from EHL’s Alumni Enterprises.

The key players in online tourism: comparison sites, search engines, travel agencies like Ebookers, Expedia and TripAdvisor were reviewed in order to better understand their impact on a traveler’s online behavior before, during, and after their trip. It is important to note that Kayak, leader in tourism search engines overseas, has extended into Europe: further proof that things are far from stagnant.

To discover more, we invite you to consult the presentation from this workshop:
Tourism: How does the Internet Change the Rules of Customer Acquisition and Loyalty?