Google starts its job-cutting wave

Google Inc. has announced plans on shutting its radio-advertising business, which would lead to 40 jobs cut. 

The company reasoned its plans by pointing at the low payoffs of the investments made. Google had spent $102 million for DMarc and had agreed to invest $1.14 billion later s depending on company performance. Sameet Sinha, an analyst with JMP Securities LLC in San Francisco, said Google couldn’t improve the company performance because the latter’s technology was so old. 

Mark Fratrik, an analyst with BIA Financial Network in Chantilly, Virginia, says radio ad revenue is expected to fall 10 percent this year. He noted that because young people are not listening to radio any more, replacing it with Internet and portable music players, businesses are trying to find other ways to advertise themselves.

The founders of DMarc, Chad and Ryan Steelberg believe the business should not be closed, as it can still generate big profits. 

Along with majority other companies Google is also trying to cut spending. It had decreased capital spending by 46 percent last quarter. However, the company will continue investing in its television and online ad business.