Google’s latest earnings reflect two things. Firstly, that the economy is in recession, as this is the first quarter ever that Google has not seen sequential quarterly growth.  Revenues of $5.51 billion were down 3% from the previous quarter, but up 6% from the corresponding quarter one year ago. Secondly, the earnings confirm the huge shift that has been taking place in recent years away from traditional media towards online advertising.

Google’s operating income came in at a cool $1.88 billion, a figure that must make newspapers green with envy. This was up 1% on the previous quarter.

$3.70 billion or 67% of total revenue came from Google owned sites, such as google.com.   $1.64 billion or 30% of total revenue came from Google-partner sites through Google Adsense.

The bulk of Google’s revenue comes from Paid Clicks, which is from Google Adwords and Google Adsense. Google Adwords is very powerful means of helping websites get targetted traffic, while Google Adsense offers websites the means to generate advertising revenue.