Google CEO Eric Schmidt used Tuesday’s appearance at the Morgan Stanley Technology Conference in San Francisco to bluntly describe the economic climate as “pretty dire” and explain how it will affect the world’s largest search engine.

“It obviously will affect the online advertising market because our systems are so tightly tuned. If customers are buying less, it will eventually be reflected in CPCs [cost per click] and CPMs [cost per thousand impressions],” he said. “We are not immune to this.”

Then Google promptly announced 6-figure bonuses for its top executives!

Jonathan Rosenberg, who oversees Google’s products, received the largest bonus at $1.64 million..
Omid Kordestani, Google’s top sales executive, and Alan Eustace, who oversees the company’s engineers, each got bonuses of $1.38 million…
Google gave a $1.24 million to its chief financial officer, Patrick Pichette, for his contributions after joining the company in August…
George Reyes, Google’s CFO before Pichette, received a 2008 bonus of $675,000

Google has been making quite a few changes as of late. They have been halting development or simply ending projects like Google Notebook, Google Video and Google Catalog Search to name a few. All of these moves are perceived as efforts to contain costs and be frugal with the pile of Google cash that they have been collecting for years now.

It’s hard to argue with the effort. While Google has given its employees plenty of company time to explore new ideas they may now be putting that brain power to work to strengthen the existing tool set. Evidence of this is the announcement of the Google Analytics Individual Qualification (IQ). Analytics is one of the most popular and powerful offerings that the search leader offers to further put their hooks in their customers. It only makes sense that the better the understanding of this important tool would help Internet marketers and Google alike.