Nov. 24 (Bloomberg) -- Google Inc., owner of the most popular Internet search engine, is adding fewer employees and focusing on controlling expenses amid the global economic slump, Chief Executive Officer Eric Schmidt said.

“We have slowed our hiring, but we’re still hiring,” Schmidt said in an interview that will be aired on Bloomberg Television at 9 p.m. New York time. “We’re still doing the same kinds of exciting and crazy things that Google always does.”

Google is grappling with an economic slowdown that’s curbing growth in the online advertising market, while competition intensifies with Yahoo! Inc. and Microsoft Corp. for customers’ budgets. Schmidt said that while the overall ad market may be shrinking, Google benefits from its ability to target specific users. The company’s business hasn’t changed significantly in the past two weeks, he said.

“Google is in a good position,” said Schmidt, 53. “We’ve always said we take a long-term view.”

Separately, Google said today it would reduce its use of contract workers as a cost-cutting move. The company employs about 10,000 contract workers, spokeswoman Jane Penner said in a telephone interview.

Google’s Headcount

Google had more than 20,000 regular employees at the end of the third quarter, up from almost 11,000 at the end of 2006. The Mountain View, California-based company added 519 workers in the third quarter, compared with 2,130 in the same period a year earlier.

Google fell $4.99 to $257.44 today in Nasdaq Stock Market trading. The shares have lost 63 percent this year.

Schmidt, who is an adviser to President-elect Barack Obama, said the government needs to stimulate the economy with improvements to the country’s infrastructure, including roads, schools, bridges and power plants.

“We have an opportunity to replace oil and coal and all the traditional kinds of problematic power sources by new technologies invented and powered in the United States, which will create a lot of new jobs,” he said.

Schmidt said the government needed to move quickly with Citigroup Inc., which received a rescue package yesterday that shields the bank from losses on toxic assets and injects $20 billion of capital.

“Had Citigroup or any of these other banks failed, we would have had a bank run of colossal proportions,” Schmidt said. “The damage would have been much worse.”

To contact the reporters on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net; Peter Cook in Washington at pcook6@bloomberg.net

Last Updated: November 24, 2008 21:39 EST