The resilience of the U.S. economy in the face of recent recession worries is a wonderful thing to behold. If you're like me, you've resigned yourself to a kind of schizoid view of the current business cycle. Greatly simplified, it boils down to: average people, very worried; businesses, not so much. Or, as Google CEO Eric Schmidt put it in a recent interview: "What recession?"Schmidt's shrug-off came in a BusinessWeek interview on innovation, in which he described how the company maintains its edge by letting employees spend a fifth of the time pursuing stuff that's not part of their job.
That 20% thing is a long-time tech-world technique that's often given lip service but seldom maintained in the face of having to run a real business. Still, Schmidt vows that even if a Googly person -- that's their term, not mine -- is working on a crunch project that's behind, they're allowed to tell their manager, tough luck, they still get to spend that 20% following their tech bliss. Wonder how that works in practice?
OK, so here's the quote from the BW article on the recession: "When asked if Google's strategy would change as the economy heads into a likely recession, he replied: 'What recession?' "
I really do have to give Schmidt props for this, because it's not as if Google hasn't been slammed by the vagaries of the investment community. In February, fears that Google's ever-upward climb in ad click-throughs had hit the wall caused its stock to tumble some 35%, from a high of nearly $700, down to $451. (It's currently back up at $572.60, as of May 9.) Perhaps that's why Google doesn't provide Wall Street with "guidance" -- industry jargon for giving it a heads-up on expected quarterly earnings -- the better not to play the market's insane stock games.
Anyway, Schmidt's confidence gives me confidence that the tech sector will ride out the tough times rising gas prices seem to be causing average consumers. When I filled up my tank for $40 the other day, I opined to the guy that I bet pretty soon people will be telling him to stop when the pump hits $20. "Oh, they're doing that already," he replied.
Fortunately, businesses realize that technology provides a competitive advantage. Clearly, companies are being more deliberate about their purchases. However, they haven't turned off the tech-spending spigot.
As for consumers, clearly cell phones and iPods are gotta-have gadgets. I wonder, though, whether consumers won't pare back bigger-ticket purchases like laptops.
What's your take? Recession or no recession, and will it or won't it hurt tech spending$$
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