Google has announced its first sizeable cuts, with the axing of 300 jobs at its online advertising unit DoubleClick.

The lay-offs make up about a quarter of DoubleClick's 1,200-strong workforce in the US.

Google's chief executive Eric Schmidt has suggested that overseas operations, employing a further 300 people, will also be affected at a later date.

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In a statement, Google said: "Since our acquisition of DoubleClick closed on March 11, we have been working to match and align DoubleClick employees in the US with our organisational plan for the business.

"As with many mergers, this review has resulted in a reduction in head-count at the acquired company."

Privacy concerns

Some workers have been laid off already, while Google says others are being offered transitional roles, or contract jobs, which are expected to end after the two companies are fully integrated.

In a blog posting in March, Mr Schmidt gave a heads-up that job cuts would be likely and that those outside the US would be made "in accordance with local law".

At over $3 billion (£1.5bn), Google's purchase of DoubleClick is its largest to date and completed less than a month ago, after being held up by regulators for a year.

At the time, the deal was heavily criticised and resisted by non-profit privacy groups which argued that it would give Google unprecedented access to information about consumers' online behaviour.

Microsoft and AT&T also opposed the transaction, which was approved by the Federal Trade Commission in December.

Conflict of interest?

On top of the news of the lay-offs, Google says it also plans to sell a DoubleClick unit called Performics Search Marketing.

That arm of the business helps marketers place adverts on search engines, including those owned by Google and its main rivals in the field, Yahoo and Microsoft.

It has always been felt that this represented a conflict of interest for Google.

In an official Google blog, Tom Phillips, director of DoubleClick Integration, writes: "It is clear to us that we do not want to be in the search engine marketing business.

"At Google, maintaining objectivity in both search and advertising is paramount to our mission and core to the trust we ask from our users."

Industry watchers maintain that the decision to sell off Performics Search Marketing makes good business sense and that Google's primary focus is to get paid as much as possible for the adverts that appear on its pages.

Rumours abound that Google is already in talks with a third party to sell the business for an undisclosed sum.

Although on his blog Mr Phillips maintains no buyer is waiting in the wings, he does concede there has been quite a bit of interest "from a number of current partners".

Danny Sullivan, editor of SeachEngineLand.com, praises the much anticipated sell-off and says it was not unexpected.

Google said the business would continue to run as a separate entity until the division was sold.

(BBC)

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