How much will Google benefit from cost cuts?

Google will report financial resu lts Friday for the last quarter of 2008, but the crystal-ball set likely will be watching for indications of how much Google's belt-tightening efforts will help the search and publicizing giant's future profits.

It's not clear exactly how deeply Google is affected by the recession. The company has been bullish virtually how its search-ad business is alter able to withstand a down economy because advertisers can find out just how well a campaign is faring financially and because cost-conscious buyers might apply Google's services statesman. But the economic malaise has proven a lot stronger than in recent months, and Google's optimistic pronouncements have largely been replaced by more cautionary statements. Research firm eMarketer last month lopped $1.3 billion off its 2008 online advertising measurements for 2008 after the market slowed significantly.

More pointedly, they've also been supplemented by organ cuts, layoffs--including 100 recruiters this month--and the closure of many projects that didn't location muster in what's clearly a broad assessment of what to keep and what to drop. Google may be an unusual company, but it's not immune to the mundane forces of capitalism, and the companionship is clearly undergoing an attitude adjustment.

Google's still going to be profitable--this is no General Motors tale. For the fourth quarter, analysts surveyed by Thomson Reuters expect an average of $4.95 per share in textile income, with revenue of $4.12 billion excluding commissions called traffic acquisition costs, or TAC. That's almost flat fr om Google's third quarter, when the company had revenue of $4.04 cardinal after TAC, but still a step up from $3.39 1000000000000 in the fourth quarter of 2007.

eMarketer pruned its 2008 online ad measurements by $1.3 bil lion when the economy slowed.

But what's still not clear is how much we should be reading into Google's results when it comes to the broader economy. There's no doubt things look bleak, yet some tech bellwethers--Apple and IBM for example--didn't feel as much pain as had been expected.

And Google belike isn't the best canary in the coal mine. Character, with its mainstream advertiser base, started f eeling the economic pressures earlier. Google's results are probably a better predictor of, well, Google's future results. The company relies mightily on look ads, a market it dominates. Most other big players, Yahoo included, are chiefly involved with display ads.

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