I think most of us can agree that an economic recession would be bad. But not everyone – and everything – would be affected in the same way, and at least one expert onlooker thinks Google would benefit.
An argument against this: strictly speaking, Google’s not a “necessary” company – it doesn’t provide food, water, or shelter. And so, from a layman’s perspective (which is about all I’m willing to lay claim to), one might think a trend towards fiscal belt-tightening wouldn’t favor the search giant. But in an article for Silicon Alley Insider, Henry Blodget raises a good point.
“Google and other cash rich companies are sitting pretty,” he writes. “Why? Because a recession would make their cash flow, cash piles, and global resources even more powerful relative to those of their would-be competitors.”
Blodget then continues, “Unlike those who argue that Google’s magical business will accelerate in a recession as advertisers spend only where they know they will get a great ROI, we think Google’s growth will be hit (not crushed, but hit.) . . . But we don’t think Google’s stock will drop anywhere near as much as the (private) stocks of thousands of revenue- and profit-less start-ups. The value of Google’s $13 billion of cash, meanwhile–and the value of its ability to pay fat cash salaries-won’t drop at all…”
So Google would be free to roam about in a ruined (or at least recessed) economy, picking up interesting companies and smart employees at will.
Sounds kinda depressing, huh? On the bright side, at least more people would get to work at the much-discussed Googleplex.
