Jan. 29 (Bloomberg) -- Google Inc., owner of the most popular Internet search engine, said its business isn’t “recession-proof” and that it will watch costs “carefully.”

“We are seeing certain companies slow down their advertising spend, at the same time we are seeing smaller companies continue to spend because they rely on the online world for their instant revenue,” Nikesh Arora, Google’s president of Europe, Middle East and Africa operations said in a Bloomberg Television interview today in Davos, Switzerland.

Arora said Google is resilient to the economic downturn and has no hiring or salary freezes.

Google faces a global slowdown in ad spending in the midst of the first recession while it has been a public company. Chief Executive Officer Eric Schmidt is trimming some jobs and pulling back on underperforming products to keep costs under control. Google cut its capital spending by 46 percent last quarter.

Markets outside the U.S. made up 50 percent of sales in the fourth quarter, up from 48 percent a year earlier. The U.K. accounted for 12 percent of sales in the fourth quarter, compared with 14 percent a year earlier.

Arora, speaking at the World Economic Forum, also said the proposed $819 billion U.S. stimulus package will be “a good thing” for the U.S. and global economies.

To contact the reporters on this story: Brian Womack in San Francisco at Bwomack1@bloomberg.net; Juho Erkheikki in Helsinki at jerkheikki@bloomberg.net.

Last Updated: January 29, 2009 06:32 EST