Bad News from the Online Ad Giants. Is IT in Trouble?

By John Hazard  |  Posted 2008-07-18 Print this article Print

IT Report Cards yesterday and this week were a mixed bag.

The big names of enterprise IT showed little sign of an economic slowdown or recession.

  • IBM profits rose 22 percent on sales of services and software, much of it overseas
  • Intel profit rose 25 percent as demand for notebooks and desktops zooms
  • Microsoft revenue topped $60 billion for the year, up 18 percent (see below for touch of gray in the silver lining).
  • AMD stunk up the joint, failing to meet even poor expectations. Revenue was slightly up, but the firm recorded a $1.19 billion loss for the quarter, more than analysts had predicted and CEO Hector Ruiz announced he would head for the door.
  • Online Ad Trouble

    Online advertising, the young buck of Silicon Valley and Big Media, showed signs of trouble.

    GigaOm's Om Malik goes so far as to say the industry and market need to worry.

    We know the housing- and financial-sector-related ads have already declined drastically, now we're going to start to see other sectors cut back on advertising, too -- and that is going to have a negative impact on everyone from large social networks to ad networks to Yahoo and Google to small startups, including weblogs like ours.

    The underperformers:

  • ValueClick, an online display ad network, announced it would miss revenue goals for the first time, blaming an "ad recession.
  • Microsoft, despite a strong performance overall,

    reported a

    weak performance in its advertising business partly due to pressure from Yahoo.

  • Time Warner and AOLare struggling, too.
  • Google is the big story. By all accounts, the software company did well -- about 39 percent growth year over year -- but not good enough for Google. CEO Eric Schmidt told reporters "We're very well positioned in a slowdown especially if it gets worse" and Google Chief Economist Hal Varian said Google will be just fine as long as the people keep searching.

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