• GigaOm , Thursday, December 4, 2008 10:30 AM

Om Malik wonders why Google let The Wall Street Journal publish such a bearish report about the company's short-term prospects yesterday. Indeed, CEO Eric Schmidt sounded less than convinced about a rosy future for the search giant, saying things like, "We have to behave as though we don't know what's going to happen." Malik sees these comments as a "a big red flag" that all is not well inside Google, and that investors ought to prepare for what could be "a terrible 2009."

That's particularly bad news for the Internet advertising sector, especially when you consider the conventional wisdom that Google is best-positioned to ride out the current economic slump. "If the leader of the pack is feigning ignorance about its chances, what can one say about mere mortals," Malik asks.

And "feigning ignorance" is exactly what a company like Google, which keeps world-famous economists like Hal Varian on its books, must be doing. "As a company, Google collects enough data on a daily basis that it can take a fair pulse of the broader economy," Malik says. "Remember, they could accurately track the spread of flu across America just based on searches, so why can't they track economic sentiment?" Google also sell ads to everyone from small business owners to consumer packaged goods giants, which means they have to know the degree to which advertisers are tightening their purse strings. Meanwhile, Google is certainly bracing for tough times, having announced plans to cut 10,000 contractor jobs, slowing capital expenditures and killing off projects that are going nowhere.

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