Word is spreading that Google, who is well known for their incredible line up of perks, is cutting back their budget on their culinary program. Among several things being cut from the program the largest hit will be the elimination of free dinners.

It has been estimated that Google spends anywhere from $20-$30 a day per employee. about $5000-$7,500K per Google employee which results in about $50-$72 Million a year just on providing free food for their employees. The headquarters in Mountain view alone holds 8,000+ employees.

Google’s founders have always communicated their commitment to providing great perks for their employees. The only sign of breakage from this commitment was the rumor that Sergey Brin complained about employees’ sense of entitlement to “bottled water and M&Ms”. Google has lost a lot of their chef’s to other companies such as facebook and has been supposedly understaffed.

What will this mean for Google’s culture and the sustainability of future perks?

Paul Lee
Director of Online Marketing
LeadQual - SEM

Google is changing the way they measure your Quality Score. Though Google uses an auction bid type system for its Adwords management, much of your position ranking is currently determined by how relevant Google deems your structure, ad, keyword and landingpages are with one another. Then it takes that score, factors in your account history, click through rate and many other factors and this final “score” is often called “Quality Score” or “index”. If this Quality score is too low, Google will raise the minimum bid required to show your ad. This is how more established players who have good history and have properly structured and optimized accounts can out position you with a $0.10 bid while you may be unable to show your ad even at a $2 bid.

The news out of Google is that in the next few days, the Quality Score, which used to be static and by keyword, will now be calculated at the time of each query.
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Yahoo! & Ichan have come to an agreement a few weeks ahead of the upcoming shareholders meeting. It was expected that the meeting would result in a contentious battle between Yang and his board and Carl Icahn and his supporters. Icahn had proposed ousting the entire Yahoo! board and replacing them with his own suggested group. However Yahoo! And Icahn agreed to expand its board to 11 members. Icahn and two new members will join the board while current director Robert Kotick will step down. The two new members are expected to be from the pool of board members recommended by Icahn.

Paul Lee
Director of Online Marketing
LeadQual - Search Engine Marketing

Both Google & Microsoft reported their earnings today. Both search engine companies missed analyst’s estimates bringing up more question about how much the slowing economy is weighing on the search engine market.

Google fell $49.70 (-9.3%) to $473.74 as of 9:35PM PST. Microsoft slid $2.14 (-7.8%) to $25.37.

The missed targets brings up the concern that searchers are spending less online and the effect of the economy on the technology industry as a whole. Google reported a slowdown in the growth of consumers clicking on their online ads. Eric Schmidt said that Google faces “a more challenging economic environment” for the first time in a while. Though some technology companies, most notably Intel Corp, was able to beat estimates, the entire technology sector was brought down by the slow reported earnings.

Google also reported a higher than expected increase in research as their spend rose 65 percent which cut into their profits. Administrative expenses also rose 49 percent partly due to their fight against Viacom Inc.

LeadQual as a whole is starting feel the impact of the economy as many clients are curbing their spend or targeting higher ROI at the expense of volume. As LeadQual’s clients range across numerous industries, we see that some sectors such as real estate are hit the hardest while others like B2B continue to remain more steady. Though marketing dollars are being cut, many companies do end up allocating a larger percentage of their budget to SEM because it’s a medium that is fully trackable and easy to measure.

Paul Lee
Director of Online Marketing
LeadQual - Search Engine Marketing

Some quick updates on the MSN - Yahoo saga.After the most recent offer was rebuffed by Yahoo, both MSN & Yahoo are potentially targeting AOL. As the Aug 1 shareholder meeting nears, both sides are trying to leverage their position and out position themselves for what is bound to be a heated conversation where landscape changing decisions will be made.

Will Yahoo merge with AOL giving Yang some leverage going into the meeting that Yahoo is heading in the right direction and do not need MSN? Will MSN come in and scoop them up for their own benefit both in their standings in the search world but also for this upcoming meeting? Either way, what kind of impact will that have on the Yahoo Google partnership that apparently Yang was overheard admitting that it was an anti-competitive move against MSN?

The battle continues. Stay tuned to see what happens when the dusts settles.

UPDATE: This feels like following a sports rumor mill where information gets leaked and rumors go around that particular athletes will be traded..

There is some word going around that the news about the AOL acquisition is being more participated by people close to the Time Warner company. Time Warner apparently sees this situation as an opportunity to unload a depreciating asset. AOL once a leader in the internet space has lost tremendous brand awareness and affiliation with web browsing and as an internet provider. Neither Microsoft or Yahoo! are trying hard to acquire AOL but are simply listening as Time Warner makes the pitch. A deal at this point involving AOL before the Aug 1 shareholder date could be a reach.

Paul Lee
Director of Online Marketing
LeadQual - Search Engine Marketing