Google released their Q4 2008 results last night and on the face of it it didn’t look good for the UK business. Q4 revenues were down to $685m from $772m in Q3, and even down slightly from Q4 2007’s number of $692m. Of course what’s really done for Google UK is not the economy (so far), but the collapse of sterling.

A back of the envelope calculation in sterling terms actually shows an impressive increase in both quarter on quarter and year on year growth:

Q4 2007 – £338m
Q3 2008 – £408m
Q4 2008 – £437m

So the most recent quarter was up 29% Y/Y and 7% Q/Q in GBP terms, which isn’t so bad. Of course, this is little comfort to Google, an American company that reports in dollars. So Google hedged against currency movements in Q4 and managed to record a $129m income because of it. Clever sods.

To make the calculations, I took average quarterly mid-market interbank rates from Oanda.com. Someone who knows more about forex and finance than me could probably come up with a better analysis, but I think the above is a good rule of thumb.