24/7 Wall St.

Google (GOOG) says that there is nothing to worry about. Its business is just fine. Tell that to the investors who have ridden the stock down from $747 to $420.

But, the case is not extraordinary. Google is saying that its AdSense text marketing business, the largest and most profitable internet ad product in the world has a broad enough spread of customers that a slowdown should not hurt it. The company wants investors to believe that its ad product is so efficient that marketers will not walk away from it, even if their budgets get tight.

According to Reuters, Google CEO Eric Schmidt said "We believe that if there were (a U.S. recession), we’ll be well positioned. We’re not particularly dependent on any particular one market. There’s not a lot of advertising for any one market over another."

If the company is right, there is a huge delta between the current stock price and where the shares should trade. But, Wall St. is wise, at least sometimes. In a deep recession companies throw out all of the marketing babies with the bath water. Ad dollars are considered discretionary spending when profits are really being pinched. No medium has been immune to this over the decades going all the way back to radio.

Schmidt knows his numbers for the current quarter. He probably know that figures for the current week. He is either being cute about a current or likely softness in his business or Google is the most misunderstood stock in the world.

Douglas A. McIntyre