The Incredible Shrinking Google

You know things are bad when even the mighty Google (Nasdaq: GOOG  ) is handing out pink slips.

Google is cutting "approximately 100 positions" from its human resources department. It's the appropriate starting point. With the economy showing few signs of life, Google isn't going to go on a massive hiring spree. It had already been winding down its contracts with external recruiters. Where it goes from there is the really scary part.

The cuts may soon begin trickling down into other departments, especially since the company is already beginning to cut back on several smaller online offerings. Through several announcements yesterday:

  • Google will no longer be accepting uploads to Google Video.
  • Catalog Search, the offering that allows visitors to dig into scanned product catalogs online, is going away.
  • Development will cease for Google Notebook, the authored page tool that counts fellow Fool Tim Beyers as a big fan. Sorry, Tim.
  • Its nascent Dodgeball mobile social networking platform is getting whacked.
  • Mashup Editor, which never left its limited private beta, is going Obit City.
  • Its 2007 purchase of Finnish microblogging site Jaiku -- already being ported to Google App Engine -- will also meet the knife, with Google no longer actively developing the Jaiku codebase (though it will live on as an open-source project).

Some of the moves appear inevitable. Just as Yahoo! (Nasdaq: YHOO  ) eventually shuttered its internally developed photo-sharing site in favor of Flickr, Google Video has seemed redundant since it acquired YouTube. Existing Google sites like Docs and Knol will help fill some of the voids left behind by the end of Notebook.

This doesn't mean that I agree with the pullback. For the most part, I think it's nuts. So what if Jaiku is no Twitter? Notebook is a venture that could have easily been monetized along the lines of Knol. More importantly, Google’s having all of these pet projects open -- in theory -- has to be giving Microsoft (Nasdaq: MSFT  ) fits, since it never knows where Google will strike from next.

Google's Chrome Web browser is joining Firefox and Apple's (Nasdaq: AAPL  ) Safari in eating away at Internet Explorer's market share. Cloud computing productivity programs like Google Docs and Adobe's (Nasdaq: ADBE  ) Buzzword may be just pebbles heaved at Microsoft Office's glass house, but you have to start somewhere. Shutting down other projects telegraphs to competitors where the growth focus will be. It's not like Google to paint target signs on itself by thinning out the bench.

Then again, if it really has come to that, maybe we're all in a bigger funk than anyone else seems to think.

Other ways to spin the content bottle:

Microsoft is a Motley Fool Inside Value selection. Google is a Motley Fool Rule Breakers pick. Apple is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz isn't calling for a search-engine search party, but he may as well. He does not own shares in any of the stocks in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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