Google, Microsoft compare falling profits

Internet search engine Google saw revenue rise and profit fall in the final quarter of last year in what have been seen as positive year-end results, while rival Microsoft prepares to cut up to 5,000 jobs over the next 18 months.┬á  Total revenue for Google was $5.7 billion, up 18 percent compared with the same quarter the previous year, and net profit for the period was $382 million, a 68 percent fall from $1.21 billion for the same period in 2007. ┬á  "Google performed well in the fourth quarter, despite an increasingly difficult economic environment," said Google boss Eric Schmidt. ┬á Keith Wirtz at Fifth Third Asset Management commented, "At least we have something to feel good about with this Google news in what has been shaping up to be a gloomy earnings period."┬á The results were affected by charges on investments during the quarter and were better than analysts had expected. Without the one-off charges on investments in Clearwire Corp and Time Warner, profits actually rose.┬á Microsoft reported a net profit as well of $4.17 billion for the final three months of 2008, down 11 percent on last year and less than analysts' expectations. ┬á Microsoft said the announced job cuts would take place in research and development, marketing, sales, finance, legal, human resources and information technology. It added it would also be making other cost-cutting measures, including a reduction in spending on travel. ┬á "These initiatives will reduce the company's annual operating expense run rate by approximately $1.5bn and reduce fiscal year 2009 capital expenditures by $700m," Microsoft said. ┬á Richard Williams, an analyst at Cross Research, said: "Microsoft has never had a layoff like this in my knowledge, and it's sending a signal that the times are definitely changing." ┬á Microsoft added it was "no longer able" to give a profit and revenue outlook for the fiscal year amid current volatile market conditions. ┬á "While we're not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach," said Microsoft chief executive Steve Ballmer.