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Google to sell unit that sways results
2008-04-02
Facing prickly questions about possible conflicts of interest, Google Inc. will sell a recently acquired service called Performics that helps Web sites improve their ranking on online search engines, including Google's. 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.
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