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Google revenue declines for first time

Financial crisis hits advertising income

It took a worldwide recession to put the Google growth machine in reverse. The world's largest search engine company marked several negative firsts in the quarter just passed, despite beating Wall Street's expectations in a tough economic environment.

Google saw its quarterly revenue decline compared to the previous quarter for the first time since it began publishing results in 2003. Revenue for the first quarter fell to $5.51bn, down 3 percent compared to the fourth quarter of last year.

It was Google's worst quarterly performance since the $5.37bn in revenue it reported in the second quarter last year. Total advertising revenue, a key metric followed by analysts, fell 3 percent compared to the fourth quarter, its first drop on record.

The company's permanent head count also fell for the first time since it began reporting, to 20,164 compared to 20,222 in the fourth quarter, according to its website.

Google reported other negative firsts in the quarter, including the growth rate on Google websites, which fell 3 percent compared to the fourth quarter and hit a record low of 9 percent on a year-to-year basis.

Google Network website growth also turned negative for the first time on a year-to-year basis, by 3 percent.

The company's traffic acquisition cost as a percentage of revenue, at 26 percent, tied with the fourth quarter of last year as the lowest on record.

Google also reined in its capital spending, to just $262.8m, the lowest level since the fourth quarter of 2005, when it spent $245.8m and its revenue was around a third of what was reported on Thursday.

The company's stock fell a slight 0.1 percent in after-market trading to $388.24.


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