Google profits Decline ...

In the history of Google, they see their quarterly profits down for the first time, although the Big Daddy of internet search has been countering the recession in a much better way than predicted by analysts. Google still continues to efficiently implement its free-spending ways to generate the maximum of the company’s revenue through the online advertisements. This was reflected on the fourth quarter results, which contrasted the prediction of a possible lay-off as done by Google’s arch rival the Microsoft Corp which laid off 5000 employees.

However, the effects of the ongoing 13 month recession reflected on the Mountain-view based Google. This was clearly evident when they wrote their investments down to USD 1.1 billion compared to 1.5 billion which has been invested the trouble struck AOL and Clearwire Corp. Google has been provided an option for its 20,222 employees to acquire new stocks by swapping their existing stocks. This move will carry a lower price on the stocks and provide the staff with a brighter option to accumulate more wealth from the new stocks. A drop in Google’s stock prices by 47% initiated the move by Google as existing 17000 staff holding the stocks will be suffering a huge loss if they cash in their stocks.

Eric Schmidt, Google Chief Executive, stated that the upcoming months will be more challenging and daunting due to economic downturn worldwide. He addressed his employees and infused confidence that Google is prepared to face such challenges and hopes that the period recession to be short.

Google accumulated USD 382 million in the period September ’08 to December ’08, which is a 68% decline compared to the same period ’07. On a YoY basis Google’s profit has been up by 17% for the preceding 17 quarters. Google stated that they would have seen their stock prices standing above average at $5.10/share (average being $4.95/share) if they could have avoided compensation costs to employees holding stocks and dismal investments made.

Revenue was seen at USD 5.8 billion, an 18% growth, which is less than a 30% growth experienced in the previous year.

Save unnecessary expenses on "hidden" charges by credit cards...

According to the Federal Law a credit card should not bear any hidden cost for the card-holders to pay. However, it has been seen that all card holders are not fully acquainted with the kind of fess that are charged on their cards and what amount of payments actually increases their interest rates and installments and the instances for which they are charged. A credit card statement has so many fine prints that it is quite easy to overlook the minute details of payments being demanded through the statements. This is what we call “hidden” charges.

An advisable way of getting rid of such unnecessary charges is by paying off the bill before it actually gets due every month and prior to the last date. It has been found that in 1998 consumers paid an amount of USD 4.8 billion as penalties for their card payments irregularities, while in 2005 the figure shot-up to a whooping USD 12 billion which signifies the fact that more and more cardholders are not paying off their bills in the due course of time and thereby facing the unnecessary penalties invoked on their statements.

There is an important penalty which you should be aware of: for some reason if you are late for paying the credit card bill on a particular occasion, the card issuer can raise the rate of interest without any respect to fact that you could carry a good track record of making your payments before time except on a single occasion. A report generated by the institutes for Consumer Financial Education, San Diego shows that 40% of the credit card issuing companies increase their interest rates on account of late payments by card holders.

Is there a way of saving yourself from such unnecessary “hidden” costs? Well, consider the few following advices-

The day you receive your card statement for payment of the bills, try dispatching the payment on the very day. You must try to clear the minimum due every month and if possible more than that. Thus in a way you are avoiding the increasing interest rates and the late payment fees. An even better way of avoiding late payments is paying your credit card bills through online automatic payments, to be deducted from your account before the due date. Thus, there shall be no chance of you forgetting to make payments prior to the due dates.

You should do a little analysis before applying for a credit card, as you should identify the better card for you according to your spending habits and repayment capability. You should always monitor the terms and conditions of the credit cards you are holding, as they may change from to time.

Obama is irritated ...

The American President Barack Obama criticized and expressed his irritation on top executives of Wall Street financial companies and stated their irresponsible behavior. The fact that about USD 18 billion were drawn as bonuses by employees last year while the financial crunch developed over US markets and were provided by a bailout from taxes paid by common people. Obama referred it as an act of shame and quoted "And part of what we're going to need is for the folks on Wall Street who are asking for help to show some restraint, and show some discipline, and show some sense of responsibility."

The New York state comptroller published a report notifying a figure of USD 18.4 billion consumed as bonuses by the top executives of Wall Street financial companies. Obama was surrounded by business leaders of Wall street and handsomely paid CEOs ,most of these personalities were the heads of giant corporations like IBM , Motorola, Xerox and Corning , Apple , Intel, etc. who get paid handsomely. The President applauded them for trying to cope up with the financial turbulence and planning for betterment unlike the heads of various financial companies of the Wall Street.

Obama went on spotting the discomfort of the public in helping out the financial sector coming out of such a self-dug hole of credit crunch due to extravagant and irresponsible lavishness of drawing bonuses. Joe Biden , the U.S Vice-President in an interview with CNBC was spotted quoting "I mean, I'd like to throw these guys in the brig," referring to such executives who had drawn enormous funds as bonuses.

As the turbulent times continue, the House of Congress has passed a USD 800 billion bailout. Obama has even proposed forming a “bad bank” which would stock funds and make them available for the worst of situations, so that the tax-payers are not burdened with emergency bailout packages. However Obama in the end addressed the top-notch executives of Wall Street and quoted "There will be time for them to make profits, and there will be time for them to get bonuses. Now is not that time."

Learn to love the Recession....

There are companies which emerge from recession as a better and stronger organization. However, such a comeback solely depends on the kind the strategies that are being adopted during the phase of recession. Such strategies might be an absolute contrast to the methodological wisdom and conventions. These can actually better the stock prices than the former peers and eventually infuse a better and a formidable structure in the company for further improvement.In a study of about 1000 companies , mostly US companies which were industrial, between 1982 to 1999 , it has been revealed that there are two major classes of identification of such companies :-

1. the industry leader which remained and continued to perform strongly

2. the challengers which moved up a long way and provided strong competition to the leaders.


A study of such companies during both healthy and worsened economy further revealed that the strong challengers looked out for more acquisition opportunities during the recessive economic stretches than the less successful ones. They increased their acquisition plans by almost 63% in order to emerge as stronger performers. As the competitor companies brought deal-making activities to a halt , the strong challengers actually did not lessen their transactions ,emphatically notifying the fact that they were more inclined on buying for cheap .

Thus, recessive economy can also be a very fruitful phase for major acquisitions and re framing strategies and setting a much prosperous trend for the future.