Google’s (GOOG) fourth quarter was better than expected. Revenue was up 18% and operating income rose 33%. The search company is starting to control costs better. The overall figures were better than expected. Wall St. was happy.

The quarter just ended says almost nothing about what is about to happen to Google. Looking at the company’s prospects for the next year or two, it is the first quarter of 2009 that counts.

By most estimates, the economy moved into recession late in the summer or early in the fall. The slide started to accelerate before Thanksgiving and then GDP began to dive before Christmas. That means that Google probably had one or two months when sales were fairly good. The holiday e-commerce season may have bolstered its numbers by a modest amount in December.

The recession is in full bloom now. The rules that applied for looking at business prospects late last year are much less useful today. Joblessness, which was just over 7% at the end of 2008 may be headed rapidly toward 9%. Corporate spending has been shut down and retail operations are fighting to stay alive. All of those things together will make Google’s first quarter comparison to the same quarter last year much less likely to look good.

Google’s revenue is nearly a perfect mirror of the economy because it does business across every industry and has customers which range from individuals to large corporations. Its advertising search business is used by millions of "affiliate" sites that rely on putting Google’s marketing software at their websites. The revenue from those Google ads is split between the site owner and the world’s Google. When small sites loss traffic or go out of business, the number of partners Google can rely on shrinks.

Even large companies are eliminating much of their marketing budgets. Google may be the single most efficient way to reach customers, but that does not mean much when firms have lost the financial capacity to do any advertising at all.

Wall St. still takes some comfort in Google’s ability to be the one marketing tool that businesses large and small cannot do without. But, the recession economy is all about doing without. Google’s first quarter will be worse than most analysts imagine.

Douglas A. McIntyre

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