Google, Microsoft and Yahoo! Oh My!

How about the treatment of lack of recession talk?

Google made some bumptious claims about not seeing any evidence of recession. With its international exposure, which makes it less beholden to the United States economy, and slight miss, much having to do with the social networking sights, I'm willing to swallow the fact that Google hasn't seen much impact of the downturn. I'm not, though, totally willing -- as much of the coverage did -- to swallow Google's myopic statements about not seeing any impact, even looking forward. But MarketWatch is:

"When an analyst mentioned a likely 'economic slowdown' expected in the coming year, Schmidt quickly interjected that, 'that's your view, not necessarily ours. We have not yet seen any negative impact from the rumors of future recessions,' Schmidt said."

MarketWatch then goes off talking about hiring pace without immediately making the point that there was weakness in financial advertising, which seems the function of larger forces Google claims to be completely immune from.

Worse, Google separately laid down the common claim that it can actually benefit from a recession, as its form of advertising can save money. Any time this is mentioned, the savvy investor should realize (because the business media rarely says it) that few businesses are recession-proof and though many claim that they stand to benefit from a recession, even fewer do. And if there is any manner of advertising business that has ever benefited from a recession, well, please email me its name because it's a mystery to me. Advertising budgets are often the easiest to cut.

Moreover, Google's past practice of not giving guidance going forward sowed a minimum of confusion and ill will when everything was going perfectly. In a possible slowdown, however, this can emerge as a central issue. The company appears to be feeling slight effects of the slowdown. If the effects get more serious and Google still claims immunity and still fails to give guidance, where will that leave investors? And how well will the business media handle it? Not a big deal yet. But, beware and be aware.