At a technology conference last week, Schmidt was bullish about the company's prospects, promising that the company could apply the "Google magic" to the banner-ad business, just like it did with search advertising.

At Silicon Alley Insider, Henry Blodget hears differently. His sources tell him that search revenues are down "markedly" over the past month.

That squares with a rumor we heard from inside the Googleplex: That security is prepping for a round of "white badge" layoffs.

What are "white badges?" The supposedly unhierarchical Google has a system of badges: red badges for contractors, white badges for regular employees. Like the red-shirted crew who served as cannon fodder on Star Trek, red-badged contractors have taken the first hit, with Google laying off thousands since September. Save for a hundred recruiters laid off in January, the white badges have been left mostly unscathed.

Our tipster tells us:

I hear there will be more layoffs of "white badges" (a security guard told me). The next round will be big. It should be announced around the 9th — right in time for the close of the first quarter.

The 9th is today, and we haven't heard anything yet about layoffs, so our tipster may be wrong on the timing; the quarter has three weeks left in it, after all. But if Blodget is right about Google's revenues, our tipster may be correct. A Google spokesman did not respond to a request for comment.

On Charlie Rose last week, Schmidt, asked if Google would buy Twitter, said that he was unlikely to buy anything, "partly because I think prices are still high." Ah, "partly." Could Google's cratering business fill in the rest of his unspoken reluctance? The clip:

Mayer, who runs Google's core search business, is the best known Google executive outside the search engine's CEO, Eric Schmidt, and its billionaire founders, Larry Page and Sergey Brin. And she's proven far more willing to pose for magazine covers and appear on morning news shows, making her the company's public face.

But she seems surprised that with such publicity comes criticism. According to Mayer, the reason why she draws negative press is because of sexism and stereotypes:

I think it's very comforting for people to put me in a box. ‘Oh, she's a fluffy girlie girl who likes clothes and cupcakes. Oh, but wait, she is spending her weekends doing hardware electronics.'

It's true that San Francisco, the last mainstream publication to profile her, focused on her most girly habits. But that has nothing to do with why so many rank-and-file Googlers outside the company's cloistered management despise Mayer.

To grasp that, it helps to understand Google's grandiose self-image: The company's spoiled engineers are led to believe they work in the most perfect meritocracy of ideas that the world has ever seen, motivated by the betterment of mankind through technology. At Google, the theory goes, who you are and who you know doesn't matter. It's only your ideas that count.

And yet, as the Times profile reveals, the real source of her power is the ability to manipulate Schmidt, Page, and Brin:

Given her longstanding relationship with Google's founders and Mr. Schmidt, she has become something of a sounding board for other managers, a number of whom routinely gravitate to her office.

At the end of a recent day, she met with two senior executives, Joe Kraus and Sundar Pichai, to discuss the company's social networking projects. Many executives at Google believe that social networking is important to its future. Ms. Mayer was meeting with Mr. Kraus and Mr. Pichai to help them prepare for a meeting the next day with Mr. Schmidt, Mr. Brin and Mr. Page to discuss how the company could leverage information-sharing among Google's many services.

"It's important you pregame Eric or it will be a disaster," Mr. Pichai tells Ms. Mayer about the pending meeting, asking her to seek Mr. Schmidt's support on their behalf.

"I know, I know," she responds. "I will call him or write an e-mail. I want them to see how complicated this will be."

Ms. Mayer e-mails Mr. Schmidt that evening. At the meeting the next day, Mr. Pichai's and Mr. Kraus's ideas are approved

The Times article does not mention a key reason why Mayer has such influence: Early in the company's history, she dated Page. (He is now married, and Mayer is engaged to Zack Bogue, a real-estate investment manager and lawyer.)

In dictating the appearance of Google's Web pages, Mayer freely admits she makes subjective decisions. In more than a decade on the job, she has not yet codified her design instinct into a written style guide. Instead, Mayer's whims, which managers under her must make a study of, are what rule.

Mayer may be talented. But her personal ties to Google's top management and her exerscise of arbitrary power are a betrayal of Google's supposedly meritocratic values — a betrayal obviously tolerated at the very top of the company. That, and not her spending time putting cupcake recipes in spreadsheets, is what exasperates her fellow Googlers.

That, and her perfectionist streak. Look at how Mayer dismisses a potential hire over a single bad grade:

One candidate got a C in macroeconomics. "That's troubling to me," Ms. Mayer says. "Good students are good at all things."

Another candidate looked promising with a quarterly rating from a supervisor of 3.5, out of 4, which meant she had exceeded her manager's expectations. Ms. Mayer is suspicious, however, because her rating hasn't changed in several quarters.

"She is looking for a way out," Ms. Mayer says.

Mayer complains that the media has not examined her life deeply:

Besides, Ms. Mayer says, there are some things that she hasn't previously revealed about herself and that the media have overlooked. Like her self-described athletic prowess.

"It hasn't shown up anywhere that I am really physically active," she says. "I ran the San Francisco half marathon this year. I did the Portland marathon. I went skiing just yesterday. I'm going to do the Birkebeiner, which is North America's longest cross-country ski race. That just shows you how much there are gaps."

Ah yes, the Portland Marathon, in which Mayer placed 7,074th out of 7,862 contestants. Or the Birkebeiner ski race, in which she placed dead last in the women's competition. Good students are good at all things.

Did she really mean to invite media scrutiny of her athletic career? What's really telling about it: In the handful of times where Mayer has competed on her own, without the backing of a billionaire ex-boyfriend and a pliant boss, she has proven to be an outright failure.

At the beginning of the piece, Mayer once again denies rumors of her impending departure from Google — rumors which Valleywag first reported. Perhaps she has realized that without Google, she's nothing. Can you blame her for clinging to her job?

(Photo via RacePhotos.net)

Oh, but not just any cell phone: A version of the G1 currently sold for $179.99 by T-Mobile, which runs Google's Android operating system. Android is the fruit of Google founders' Larry Page and Sergey Brin's strange obsession with the wireless market, launched in a fit of jealousy over the growing number of phones running Microsoft's Windows Mobile. (Imagine that: Google, jealous of Microsoft for a change.)

In an email, Google management blames the economic crisis and suggests that this is a great opportunity to "dogfood" the phones — an unappetizing tech-industry euphemism for testing products in-house. This is what has become of the company that was once deemed the best place in the world to work: Cancelled bonuses and unpaid labor. Here's the memo:

Googlers,

The holiday bonus is a Google tradition - it's a great way to thank everyone for their hard work. In the past, we've done this in cash. This year, we've decided to give Googlers a different kind of present - a Dream phone (this is the same device T-Mobile markets as the G1). We're really excited about getting the phone to more Googlers in more countries, and also seeing all the cool new things you do with it.

Shipping these special edition phones in such a short time frame (they were designed especially for Googlers with a 'droid' on the back) and making sure they would work anywhere in the world was no small feat. So a big thank you to the Android and Legal teams for making this happen. While these phones do not have SIM cards, they are unlocked so they can be used with the network provider of your choice. Plus - thanks to more fancy footwork from the Android team - they'll work immediately as WiFi devices!

Sadly, despite all our best efforts, there are some countries - India, China, Brazil, Korea, Israel, Russia, Argentina, Taiwan, Hong Kong, Mexico, Turkey, Kenya, United Arab Emirates, South Africa, Egypt, Chile, and the Ukraine - where even our legal team could not work their magic. Googlers in these countries will receive the cash equivalent of the phone in their December paychecks, which is about $400 USD. Overall though almost 85% of Googlers globally will be able to receive the phone - including the United States, Western and Central Europe, Canada, Australia, Singapore, and Japan.

The holiday gift team in your office will be sending out an email with logistical information on distribution shortly. We know that some of you are already on your holidays - don't worry - your phones will be waiting for you when you come back! For more information, check out the FAQ here.

Some of you will of course be wondering why we decided to change from a cash bonus to the Dream phone. Here are the reasons. First, we've never developed anything like the Android software before and this represented a unique opportunity to celebrate that achievement. Googlers globally have been asking for the Dream phone and we're looking forward to seeing all the different things that you do with them. This is a chance for us to once again dogfood a product and make it even better! Second, as we discussed in our email this week, the current economic crisis requires us to be more conservative about how we spend our money. We felt that giving the Dream phone would be a great holiday present - something we could all celebrate.

Thank you for all that you do to make Google the company that it is. We hope that you will enjoy using your Dream phone in 2009 and have a very happy holiday!

One tipster notes:

The boxes appear to have magnets to keep them closed, instead of tape — open box discount for Google?

Since the phones are customized for Googlers, the suggestion that these are leftover G1s which went unsold at retail is unlikely. Can you get your hands on one? It will take some bravery to put them up for sale on eBay, magnets or not. But hey, times are tough all over. Even at the Googleplex.