Google 2007 Annual Report Download - page 42

measures that could degrade, disrupt or increase the cost of user access to certain of our products by restricting or
prohibiting the use of their infrastructure to support or facilitate our offerings, or by charging increased fees to us or our
users to provide our offerings. These activities may be permitted in the U.S. after recent regulatory changes, including
recent decisions by the U.S. Supreme Court and Federal Communications Commission. While interference with access to
our popular products and services seems unlikely, such carrier interference could result in a loss of existing users and
advertisers and increased costs, and could impair our ability to attract new users and advertisers, thereby harming our
revenue and growth.
Interruption or failure of our information technology and communications systems could hurt our ability to
effectively provide our products and services, which could damage our reputation and harm our operating results.
The availability of our products and services depends on the continuing operation of our information technology and
communications systems. Any damage to or failure of our systems could result in interruptions in our service, which could
reduce our revenues and profits, and damage our brand. Our systems are vulnerable to damage or interruption from
earthquakes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses, computer denial of
service attacks or other attempts to harm our systems. Some of our data centers are located in areas with a high risk of
major earthquakes. Our data centers are also subject to break-ins, sabotage and intentional acts of vandalism, and to
potential disruptions if the operators of these facilities have financial difficulties. Some of our systems are not fully
redundant, and our disaster recovery planning cannot account for all eventualities. The occurrence of a natural disaster, a
decision to close a facility we are using without adequate notice for financial reasons or other unanticipated problems at
our data centers could result in lengthy interruptions in our service.
Our business depends on increasing use of the internet by users searching for information, advertisers marketing
products and services and web sites seeking to earn revenue to support their web content. If the internet infrastructure
does not grow and is not maintained to support these activities, our business will be harmed.
Our success will depend on the continued growth and maintenance of the internet infrastructure. This includes
maintenance of a reliable network backbone with the necessary speed, data capacity and security for providing reliable
internet services. Internet infrastructure may be unable to support the demands placed on it if the number of internet users
continues to increase, or if existing or future internet users access the internet more often or increase their bandwidth
requirements. In addition, viruses, worms and similar programs may harm the performance of the internet. The internet
has experienced a variety of outages and other delays as a result of damage to portions of its infrastructure, and could face
outages and delays in the future. These outages and delays could reduce the level of internet usage as well as our ability to
provide our solutions.
Payments to certain of our Google Network members have exceeded the related fees we receive from our advertisers.
We are obligated under certain agreements to make non-cancelable guaranteed minimum revenue share payments to
Google Network members based on their achieving defined performance terms, such as number of search queries or
advertisements displayed. In these agreements, we promise to make these minimum payments to the Google Network
member for a pre-negotiated period of time. At December 31, 2007, our aggregate outstanding non-cancelable guaranteed
minimum revenue share commitments totaled $1.75 billion through 2012 compared to $1.17 billion at December 31,
2006. It is difficult to forecast with certainty the fees that we will earn under agreements with guarantees, and sometimes
the fees we earn fall short of the guaranteed minimum payment amounts.
We rely on outside providers for our worldwide billing, collection, payment processing and payroll. If these outside
service providers are not able to fulfill their service obligations, our business and operations could be disrupted, and our
operating results could be harmed.
Outside providers perform various functions for us, such as worldwide billing, collection, payment processing and
payroll. These functions are critical to our operations and involve sensitive interactions between us and our advertisers,
partners (e.g., Google Network members) and employees. Although we have implemented service level agreements and
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