Google is confident that it will survive a recession. At a briefing during a visit to Australia, Google Chief Executive Eric Schmidt told reporters that Google will be “well positioned” in the event of a global economic slowdown.
Ignoring for a moment that Google earned $4.83 billion in revenue in the fourth quarter of 2007 alone, or more than $1 billion in profits, what Mr. Schmidt is doing is merely trying to point out that Google does not depend on any particular market for its online ad revenue. A recession would not affect Google too negatively, in fact.
Mr Schmidt pointed out that direct marketing — the forerunner to online marketing — traditionally does well during recession periods. He said: “There tends to be a flight in a global slowdown to higher quality advertising and higher quality advertising is determined by what sells.”
This news got me thinking, however. In the event of a severe recession, will you be able to cope with abrupt cuts to your IT budget, manpower reductions, deferred purchases, etcetera? Have you ever faced such a situation before? Is it even possible to prepare for it?