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.

“We believe that if there were (a U.S. recession), we’ll be well positioned. We’re not particularly dependent on any particular one market. There’s not a lot of advertising for any one market over another,” he said.

Direct marketing, a successor to online marketing, had historically performed well in times of economic recession, Schmidt said. “There tends to be a flight in a global slowdown to higher quality advertising and higher quality advertising is determined by what sells,” he said.

Google, which earned $4.827 billion in revenue in the fourth quarter, makes around 98 percent of its income from text ads but was exploring new formats, such as advertising on You Tube videos.

Google has a $900 million, three-year deal to sell advertising to News Corp’s MySpace customers under which it must pay MySpace whether or not it makes money selling ads on the site.

Shares in Google, which traded near $750 in November, fell 4.1 percent to $419.87 on Monday.

The decision, announced Wednesday, comes three weeks after Google picked up Performics as part of the online search leader’s $3.2 billion purchase of online ad service DoubleClick.

In other fallout from the DoubleClick deal, Google reportedly is preparing to eliminate about 300 jobs in the biggest purge in the Mountain View-based company’s 9 1/2-year history. The New York Times reported Google’s layoff plans on its Web site late Wednesday, citing an unnamed person with direct knowledge of the upcoming cuts.

Google didn’t immediately respond to inquiries about the reported layoffs, but Eric Schmidt, Google’s chief executive, acknowledged layoffs were possible in a note published when the DoubleClick deal closed.

Including the roughly 1,500 workers picked up in the DoubleClick acquisition, Google now has more than 18,000 employees worldwide.

Although 300 jobs represents less than 2 percent of Google’s total payroll, it still figures to a jarring move for a company that prides itself on pampering its employees.

The streamlining also signals Google may be watching its expenses more closely amid concerns that the slowing U.S. economy will curb the ad spending that has driven the company’s rapid earnings growth. Rising worries about a possible slowdown has contributed to a 33 percent decline in Google’s market value so far this year, wiping out about $70 billion in shareholder wealth.

Owning Performics thrust Google into an uncomfortable position because the service devises technical tricks to highlight Web sites among the non-advertising results of searches.

That part of Performics’ business threatened to break Google’s long-standing vow not to allow cash to influence the order of the so-called “organic” links featured in the center of its results page.

Landing near the top of the first search results page is prized because it can bring hordes of traffic without costing any advertising dollars.

“Our search results will be objective and we will not accept payment for inclusion or ranking in them,” Google co-founders Larry Page and Sergey Brin promised in a 2004 letter spelling out the company’s “don’t be evil” principles.

Web sites that pay Google for special treatment are supposed to appear only in sections of the results page labeled as “sponsored” links that typically direct people to e-commerce sites.

Performics also advises Web sites how to spend their money on advertising at Google and other search engines, another area that could raise questions about the service’s objectivity.

Selling the piece of Performics that manipulates search engine results will enable Google to preserve the trust of its users, according to Tom Phillips, who is overseeing the company’s DoubleClick acquisition.

“It’s clear to us that we do not want to be in the search engine marketing business,” Phillips wrote in a blog on Google’s Web site. “Maintaining objectivity in both search and advertising is paramount to Google’s mission.”

The company intends to hold on to another part of Performics that helps Web sites manage their advertising.

Although Google hasn’t lined up a buyer for Performics yet, several of the company’s business partners already have expressed interest, Phillips wrote, though he didn’t identify any prospective bidders.

As described by Yahoo in a statement released late Saturday, Microsoft packaged its latest offer with activist investor Carl Icahn, a billionaire who is seeking to overthrow Yahoo’s board of directors in a shareholder meeting scheduled for August 1.

Without providing many specifics, Yahoo said Microsoft renewed an earlier bid to buy the company’s search engine and proposed turning over the remaining pieces to a board controlled by Icahn.

Yahoo said it received the complex proposal Friday and was given less than 24 hours to respond.

Backed into a corner, Yahoo lashed out in a blunt manner likely to inject even more bad blood into its already venomous relationship with Microsoft and Icahn.

“It is ludicrous to think that our board could accept such a proposal,” Yahoo Chairman Roy Bostock said in the statement. “While this type of erratic and unpredictable behavior is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders.”

Microsoft did not immediately respond to a request for comment late Saturday. Efforts to reach Icahn were unsuccessful.

Yahoo said it unsuccessfully reiterated its willingness to sell the entire company to Microsoft for $47.5 billion, or $33 per share — a bid that the software maker dangled in early May before withdrawing it in a pique over Yahoo Chief Executive Jerry Yang’s demand for $37 per share.

The breakdown of those takeover negotiations infuriated many Yahoo shareholders who fear the company’s stock price would plunge back below $20 — a threshold reached just before Microsoft made its initial bid in early January. Yahoo shares finished Friday at $23.57.

Yahoo’s squandered opportunity to sell to Microsoft in May prompted Icahn to lead a rebellion aimed at removing Yahoo’s entire board so he could fire Yang and try to revive sales talks with Microsoft.

Icahn’s attempted coup gathered more steam earlier this week when Microsoft publicly announced it might be willing to buy all or part of Yahoo if shareholders voted to remove the current board. Yahoo shares climbed 10 percent during the past week on hopes that Microsoft’s backing of Icahn might pave the way for a deal.

Since it dropped its bid to buy all of Yahoo, Microsoft had focused its overtures on Yahoo’s search engine — the second most used on the Internet behind Google Inc.’s.

Microsoft in May offered to buy Yahoo’s search operations for $1 billion and to spend another $8 billion to acquire a 16 percent stake in Yahoo’s remaining operations.

Yahoo said the proposal that Microsoft submitted Friday “contains a number of improvements,” but insisted it still wasn’t good enough.

Yahoo offered no concrete details about what Icahn had proposed to do with the rest of the business, but indicated part of the plan included selling the company’s Asian operations. The Sunnyvale-based company pooh-poohed the notion of entrusting its business to Icahn, noting his inexperience in the Internet industry.

Icahn, who has been challenging corporate boards for more than two decades, owns a roughly 5 percent stake in Yahoo and hopes to make a profit by pushing the company’s stock price above $30.

Instead of selling its search engine to Microsoft, Yahoo opted to forge an advertising partnership with rival Google Inc. That represented a bit of irony because Google’s dominance of the Internet search advertising market is the primary reason that Microsoft is pursuing Yahoo.

As Google has become more successful, both Yahoo and Microsoft have been regressing, a dynamic that many analysts believe make it imperative for the two companies to put aside their differences and combine forces.

Yahoo has estimated that it can boost its annual revenue by about $800 million by relying on Google’s superior technology to show some ads alongside the search results on its Web site.

But Yahoo’s alliance with Google is being closely vetted by antitrust regulators because the two companies together control more than 80 percent of the U.S. search advertising market. To accommodate the review, Yahoo and Google have voluntarily agreed to wait until late September to begin working together.

Microsoft has maintained its proposal is better than the Google partnership.

Google on Wednesday took the wrappings off its previously announced publishing-and-reference service called Knol, which allows users to write articles on specific topics and to make money from them.

By trying to provide such content, the service is likely to compete with online encyclopedia Wikipedia, whose articles tend to rank highly in Google search results.

Knol, which stands for unit of knowledge, allows internet users to write articles on their own areas of expertise.

The world’s largest search engine is hoping that “knols” will be written on every conceivable topic ranging from gardening and pottery to Byzantine art and neo-classical literature.

The free service will inevitably draw comparisons with Wikipedia but Google says it differs from it in many ways.

Unlike Wikipedia, which allows visitors to edit its pages, people will not be able to make changes or contribute to a person’s knol without their permission.

Knols written on the same subject will also remain separate and compete for the attention of visitors, who will be able to give online feedback. Pictures of authors will also be displayed on their knol web pages.

Udi Manber, Google’s vice president of engineering, said: “We believe that knowing who wrote what will significantly help users make better use of web content.

“Books have authors’ names right on the cover, news articles have bylines, scientific articles always have authors; but somehow the web evolved without a strong standard to keep authors names highlighted.”

Contributors will be able to make money from the service by allowing adverts which relate to their articles to appear on their pages.

Juergen Galler, Google’s director of product management said: “The internet is huge, but still a lot of expert knowledge remains untapped.”

“Knol provides a way for people to share their expertise with others – and get credit for their contribution.”

The service is part of a growing drive by Google to expand beyond simple search and into other areas such as desk top publishing and mobile phones.

But taking on Wikipedia is no mean feat. With 116 million global users a month – a third of the internet population – it consistently ranks among the most visited websites in the world.

The Mountain View, California-based company took the unusual step of announcing its latest product on the Labor Day holiday after it prematurely sent out a comic book drawn up to herald the new browser’s arrival.

The free browser, called “Chrome,” is supposed to be available for downloading Tuesday in more than 100 countries for computers running on Microsoft’s Windows operating system. Google said it’s still working on versions compatible with Apple Inc.’s Mac computer and the Linux operating system.

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Google’s browser is expected to hit the market a week after Microsoft’s unveiling of a test version of its latest browser update, Internet Explorer 8. The tweaks include more tools for Web surfers to cloak their on-line preferences, creating a shield that could make it more difficult for Google and other marketing networks to figure out which ads are most likely to appeal to which individuals.

Google’s lead in the lucrative Internet search market is nearly as commanding, with its engine processing nearly two-thirds of the Web’s queries.

For the past few years, Google has been trying to take advantage of its search engine’s popularity to loosen Microsoft’s grip on how most people interact with personal computers.

The assault so far has been focused on a bundle of computer programs, including word processing and spreadsheet applications, that Google offers as an alternative to one of Microsoft’s biggest money makers, its Office suite of products.

Google has tried to make its alternatives more appealing and accessible by hosting them for free over Internet connections instead of requiring users to pay a licensing fee to install them on individual computers, as Microsoft typically does.

Until now, Google had been trying to undermine Internet Explorer by supporting Firefox, a Web browser developed by the open-source Mozilla Foundation. Bolstered by an advertising partnership with Google’s search engine, Firefox ranks as the second most popular browser, with a market share of more than 10 percent. Google recently extended its advertising alliance with Firefox through 2011.

Bearing the stamp of Google’s renowned brand, Chrome could be an even more formidable rival to Explorer.

Still, Google’s name is no guarantee of success. For instance, Google’s instant messaging service has not come close to catching up to the market-leading products made by Yahoo, Microsoft and Time Warner Inc.’s AOL.

In a blog post Monday, Google touted Chrome as a more sophisticated Web browser better suited for displaying the dynamic and interactive content blossoming on the Web as people migrate from television, radio and newspapers.

“The Web gets better with more options and innovation,” Sundar Pichai, Google’s vice president of product management, and Linus Upson, Google’s engineering director, wrote in the posting. “Google Chrome is another option, and we hope it contributes to making the Web even better.”

The internet search giant first rolled out the service in the US two years ago, and has been expanding its mapping to other countries, including Japan, France, Canada and Ireland.

The 3D images are captured by special patrol cars with roof-mounted 360-degree cameras, which take pictures of every street and road in the city.

These images are then ‘stitched’ together so that when a user searches for an address in Google Maps, they can choose to view that address as an ordinary map, a satellite image, or take a walk down the virtual street thanks to 3D photography.

The service will initially launch in 25 British cities, including London, Manchester and Edinburgh, with other major towns following in the coming months.

Read more>

The internet search giant first rolled out the service in the US two years ago, and has been expanding its mapping to other countries, including Japan, France, Canada and Ireland.

The 3D images are captured by special patrol cars with roof-mounted 360-degree cameras, which take pictures of every street and road in the city.

These images are then ‘stitched’ together so that when a user searches for an address in Google Maps, they can choose to view that address as an ordinary map, a satellite image, or take a walk down the virtual street thanks to 3D photography.

The service will initially launch in 25 British cities, including London, Manchester and Edinburgh, with other major towns following in the coming months.

Read more>