Google and the Wal-Mart effect

While Wall St. shuddered after Google reported a less-than-expected 35% Q2 profit increase, Google Watch's Clint Boulton gleaned some rosier tidbits out of the accompanying conference call.

Co-founder Sergey Brin, CEO Eric Schmidt and Google Chief Economist Hal Varian provided an in-depth state of the state for Google, touching on not only the earnings, but also some future bright spots for the company. These include the market for mobile search, something that's expected to grow quickly with the advent of the iPhone and the upcoming Android release, the increasing interest in Google Apps, and the nascent monetization of YouTube via DoubleClick. Still, the future is the future, and as Jordan Golson at the Industry Standard notes, right now, Google receives a whopping 98% of its total revenues from search alone. As Golton quotes from Google's latest 10-Q filing, none of these "future" revenue generators are generating much revenue today. Google says:

"Revenues realized through the Google Print Ads Program, Google Audio Ads, Google TV Ads, Google Checkout, YouTube, Postini and DoubleClick were not material in any of the periods presented."

Still, for anyone fretting over Google's surviving the current market downturn, Boulton offers this answer. According to Google's Varian, the company gets a bump from something akin to the Wal-Mart effect. As times get tight, shoppers are more careful where and how they spend their dollar, and as a result, they spend more time searching (and clicking on ads) online. So, Google's biggest revenue generator stays strong--even in a down economy. It will be interesting to see how its future revenue-generators fare.