Google CEO Eric Schmidt made some comments in Sydney last night that support the theory that Google’s Q1 is fine but not great (GOOG). Reuters reports, we annotate:
Google Chief Executive Eric Schmidt acknowledged sliding share values and a shortage of credit in financial markets was “a very serious issue” and that many people were expecting a global economic slowdown.
“It’s too early to say if there’s (already) been any specific impact but if there were I don’t think it would be much,” Schmidt told reporters at a briefing during a visit to Sydney.
This statement is similar to the one Eric made on the Q4 conference call in late January, but sounds slightly more hedged. Given that we are now in mid-March, if Google’s Q1 were truly weak, we suspect Schmidt’s comments would have been more circumspect.
Anecdotal reports from SEM firms also support the theory that Google’s Q1 is fine is not great. Q1 estimates have been reduced and, in our opinion, already take meaningful US weakness into account. We still think there is risk to full-year 2008 estimates: As Eric says, it’s too early to say what impact the recession will have on Google, and the full-year estimates suggest a rebound in the second half of the year.