The Sky Is Falling: Google Shares Below $300

[qi:114] So much for the Obama bump. The markets have resumed their downward spiral, making clear that our economic conditions aren’t going to improve anytime soon. The impact of this sustained selling is even being felt by companies that were, until recently, deemed bulletproof — among them, Google (s GOOG). Shares of the Mountain View, Calif.-based company have dropped below $300 for the first time since 2005, indicating that the company might not be immune to the downturn in consumer spending (and thus advertising) after all. Nick Denton, publisher of Gawker Media, makes a very compelling case as to why online advertising is in for some stormy weather.

Citibank Internet analyst Mark Mahaney earlier today cut his fourth-quarter profit and net revenue estimates on Google, saying he’s picking up all sorts of negative data points. “We have conducted two dozen+ checks with SEMs (Search Engine Marketers), Online Ad Agencies, large brand retailers, high ASP retailers, travel companies, etc…Conclusions aren’t uniform, but Search marketers almost universally expect Q4 to be the weakest they have ever experienced,” he writes in his morning note. While these might be transitory issues for Google — the company continues to increase market share in search and has a monopolistic control of online advertising — as Mahaney points out, even it has nowhere to hide as the planet gets hit by this economic comet.

This downturn poses another challenge for Google as well: To date, it has been able to spending liberally on attracting talented folks to its team. But many of those options are now under water, leaving those employees to resent some of their predecessors. Maintaining its talent — and attracting new blood — is going to be that much harder going forward. And that will leave the company even less time to play with its new toys, such as its newly acquired fighter jet.