Is Google recession proof ?

The question is what effect recession is going to have on earnings of Google. Recently in a interview Eric Schmidt (CEO Google) tried to convince that Recession is not going to have an negative effect on Google. Lets take a look at the various arguments in favor and against Google.

Google earns most of its revenue from text based Ads displayed on various web pages. Advertisers pay Google depending on the number of clicks they had on their advertisements. In event of an recession the first thing that businesses cut down is the advertising budget.With Consumer spending weakening and showing the weakest numbers since September 2006, if the number of clicks goes down, Google revenue will go down along with it.

OR

In case of an recession and increasing inflation, people will tend to look for cheaper goods on the Internet.This might very well cause the number of clicks to increase and an increase in the Google revenue.

If you are someone who in these days of soaring gas prices are looking for deals on the Internet, also look for buying the Google stock as an investment. With the stock down to $430 from its peak of $750 this might a be good time to buy.