What's behind the Google layoffs


Google (GOOG) has announced it will lay off 200 people in its sales and marketing operation. That is probably not a good sign for its revenue outlook, but it may not be as bad as it seems.

There has been speculation, which will not be confirmed until Google releases Q1 numbers, that search advertising is being battered by the economic slowdown. Google's revenue is almost certainly not down as much as other large web companies which rely primarily on internet display advertising. Industry expects expect that sector of internet marketing income to be down as much as 30 percent this quarter. Google's search ad products are viewed as a much more effective way to reach customers, so its sales may be holding their own, even in a tough market.