Google's Butcher Bill

If you don't count recruiters who were tasked with finding more engineers to join up, Google's announcement yesterday marked the first time the company was officially laying off full-time employees. On Thursday, Google declared that it was killing Google Audio Ads, a project designed to let businesses sign up online for radio ads. The service started in 2006, when Google bought the radio advertising technology company dMarc Broadcasting for $102 million, promised to revolutionize the way radio ads are bought and sold, and predicted that one day 1,000 employees would work in the unit. Now, 40 employees are being cast off, the whole project has been shut down, and Google is trying to sell off a related unit that automates radio advertising.

According to the New York Times, the project struggled even in the best of times. Radio station owners were leery of Google's habit of gobbling up everything it touched, and refused to sign onto the service. Advertisers drawn to search ads weren't interested in radio spots. With neither buyers nor sellers interested, Google's hopes to make millions brokering such deals were crushed.

But this is just the latest of countless projects and perks Google has killed as it hunkers down for the recession. In the last few months, Google has scaled back its free-meals program, reduced its holiday bonus from up to $20,000 in cash to an Android phone, and laid off recruiters and temporary contract workers. It's also exercised an option to sell its stake in AOL and has begun killing off interesting projects that nonetheless never paid off. The butcher's bill includes Dodgeball, Google Video, Mashup Editor, the Twitter clone Jaiku, Catalog Search, and Google Print Ads.

As substantial as that list sounds, yesterday's news indicates that Google is not quite done shutting down unprofitable ventures, as the company refocuses on its core search-ad business and gets ready to weather the storm. We wondered what else Google might abandon and asked Ben Schachter, a Google analyst for the financial-services firm UBS, for his list of fun projects that nonetheless belong on the chopping block.

"There's a core business of text-based ads, and then there are mobile video display and enterprise services," Schachter said. "Anything that's not key in those services should be cut. ... Things like Google Calendar, these are interesting, but do they make money? Can they cut back on resources there? The days of trying things out and seeing where they go, those days are limited in this kind of macro environment."

Despite its recent cutbacks, more serious surgery may simply be antithetical to Google's internal culture. In a sense, search ads and other successful products were Hail Mary passes, a shot in the dark with some innovative project and a hope that the world would like it. So far, it's worked out like gangbusters for a few enormously successful products, and Google may be too heavily invested in the idea that innovation without an endgame will ultimately pay off.