Turns out Contagion and Outbreak are two of the most popular pandemic-era movies on Netflix, which is a bit like watching an airplane disaster flick on a transatlantic flight battered by severe turbulence. Perhaps less surprising, and probably less ghoulish, is that Internet search activity is all about the virus. "The increase in user interest was for information about COVID-19 and related non-commercial topics," said Ruth Porat, the chief financial officer of Alphabet, Google's parent company, on the Internet giant's phone call about first-quarter results.

That's bad news for Google because searches on pandemic and virus are not an obvious ad sales opportunity. As Porat pointed out, "it is not clear how durable or monetizable this behavior will be." Analysts at Wells Fargo had already warned that "key contributors" to Google's search revenues, which accounted for 60% of first-quarter sales, were "dramatically reducing ad spend." As netizens stopped booking holidays and started browsing for COVID-19 information, ad revenues felt a squeeze in March.

The slowdown shows up in headline figures. Last year, Google managed a 17% year-on-year increase in total sales. This year it clocked 13% growth, to $41.2 billion. The advertising business entered March suffering what Porat described as "a mid-teens percentage decline" in revenues, according to a Seeking Alpha transcript. "As of today, we anticipate that the second quarter will be a difficult one for our advertising business."

Thankfully, Google today has its webby fingers in a lot of other activities. Under lockdown, consumers and businesses have piled into the cloud, boosting sales at that division by 52%, compared with the year-earlier quarter, to about $2.8 billion. At just less than 7% of revenues, that marks a significant increase on the 5.5% it claimed as a percentage of total sales in 2019. In telecom, specifically, cloud partnerships were flagged with AT&T, T-Systems (the IT subsidiary of Germany's Deutsche Telekom) and UK-based Vodafone.

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But the growing clout of the cloud business will aggravate critics of Google and its Internet ilk. Their concern is that US tech giants will become even more dominant during this pandemic, as the virus drives other businesses to seek the most obvious digital refuge they can find. In telecom, for instance, operators may become increasingly reliant on Google for traffic analysis as they struggle to cope with a surge in network usage. Vodafone is already using Google Cloud for this purpose, according to Sundar Pichai, Google's CEO.

Profitability still looks extremely healthy at the web giant. Operating income rose 21% in the first quarter, to nearly $8 billion, while net profit ticked up 3%, to about $6.8 billion. Yet as earnings come under pressure, Pichai warned the market that Google's recruitment drive will shift down a gear. "We made the decision to slow down the pace of hiring in the remainder of 2020, while maintaining momentum in a small number of strategic areas." There seems likely to be an even greater emphasis on automation, or what Google calls "machine utilization."

The precise impact was not made clear. In 2019, Google hired another 20,128 employees, finishing the year with exactly 118,899 on its payroll. Another 4,149 joined between January and March. But CNBC claims to have seen internal Google documents showing that marketing budgets will be slashed by up to 50% in the second half of this year. That could all signify the "top-line weakness," according to Wells Fargo, while Rohit Kulkarni, an analyst with MKM Partners, thinks the days of double-digit revenue growth are over until this time next year.

As Light Reading has previously written, sustaining the rate of jobs growth will be a tough call for tech giants besides Google. Facebook may be even more susceptible to a slowdown in the advertising business than Google. In March, it warned investors of a "weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19." Twitter is in a similar predicament. Internet giants may look more resilient than most other companies, but no one is immune to COVID-19.

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— Iain Morris, International Editor, Light Reading