Is Google (Gasp!) Cutting Costs?

Amid the giddy press that accompanied Google's third-quarter profit numbers, almost no one pointed out a key element to the company's numbers: Google got there in part by cutting costs. As The Street's Marek Fuchs points out, most reporters were too busy hyping Google's ability to pile up the cash even in a recession. But first, Google wasn't the only company to post encouraging numbers; IBM and Intel did pretty well themselves, thank you very much. Second, Google has brought its era of free-spending to an end, at least for now. Unfortunately, as Fuchs notes, this rather important point was mostly lost on the press. The main standout was Fortune, which reported that a new frugality, including slowing down the number of new hires and cutting costs at Google's data centers, was the key to the company's impressive quarterly numbers.

Over at Valleywag, Owen Thomas notices that Google has gone so far as to (horrors!) close one of the cafes at the GooglePlex. "Food is at the center of Google's corporate culture, a sign of the company's Pollyanna worldview and the outsized financial success which enables this largesse," he writes. "So why is Google closing a cafe?" According to Thomas, the company can no longer afford to hand out Glaceau Smartwater, and a large swath of the campus has now been cut off from free breakfast service. Whatever could be next? Will Googlers have to buy their own smartphones?