Posts Tagged ‘advertising’

AOL Job Cuts

Sunday, February 1st, 2009

AOL has become one of the latest companies to resort to drastic measures as it is hit hard by the global recession. It has been reported that over the next six months, AOL will be making around 700 job cuts as well as freezing all merit-based pay increases. The news comes alongside speculation that the company’s value has dropped by over 70% in under four years.

AOL is just one of many Internet giants to suffer over the past few years. Search engine and portal companies, like AOL, Google and Yahoo, make the majority of their money through advertising. In times of economic downturn or recession, companies’ marketing budgets are one of the first things to be cut. This has a knock-on effect of greatly reducing revenue for search engine companies, who can find it very difficult to survive.

Several large search engine companies are struggling to stay afloat and may eventually follow in the footsteps of Yahoo. This could be extremely detrimental for the search industry, which could benefit from a greater level of competition, but is gradually seeing less. Within the next few years, it is possible that Google could account for 95% of UK Internet searches. While they offer a great service, this kind of monopoly could stifle innovation in the world of search.