Google 2007 Annual Report Download - page 51

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements
include, among other things, statements concerning our expectations:
• regarding the growth and growth rate of our operations, business, revenues, operating margins, costs and expenses;
• that seasonal fluctuations in internet usage and traditional advertising seasonality are likely to affect our business;
• that growth in advertising revenues from our web sites will continue to exceed that from our Google Network members’
web sites;
• regarding our future stock-based compensation charges including charges related to our TSO program;
• that we will continue to pay most of the Google AdSense fees we receive from advertisers to our Google Network
members;
• that we may take steps to improve the relevance of the ads we deliver;
• regarding our actions to reduce the number of accidental clicks;
• that we will continue to make significant capital expenditure investments;
• that the growth rate of our costs and expenses may exceed the growth rate of our revenues;
• that our cost of revenues will increase in dollars and may increase as a percentage of revenues;
• that traffic acquisition costs may increase as a percentage of revenues;
• regarding the increase of research and development, sales and marketing and general and administrative expenses in the
future;
• regarding quarterly fluctuations in paid clicks;
• that we will continue to make investments and acquisitions;
• regarding the sufficiency of our existing cash, cash equivalents, marketable securities and cash generated from
operations;
• regarding continued investments in international markets;
• regarding our expectations about making future donations to the Google Foundation;
as well as other statements regarding our future operations, financial condition and prospects and business strategies. These
forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially
from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are
not limited to, those discussed in this Annual Report on Form 10-K, and in particular, the risks discussed under the heading “Risk
Factors” in Item 1A of this Annual Report on Form 10-K and those discussed in other documents we file with the Securities and
Exchange Commission. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking
statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking
statements.
The following discussion and analysis of our financial condition and results of operations should be read together
with our Consolidated Financial Statements and related notes included elsewhere in this Annual Report on Form 10-K.
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