Google 2008 Annual Report Download - page 38

continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions. These
transactions could be material to our financial condition and results of operations. The process of integrating an
acquired company, business or technology has created, and will continue to create unforeseen operating
difficulties and expenditures. The areas where we face risks include:
• Implementation or remediation of controls, procedures and policies at the acquired company.
• Diversion of management time and focus from operating our business to acquisition integration
challenges.
• Coordination of product, engineering and sales and marketing functions.
• Transition of operations, users and customers onto our existing platforms.
• Cultural challenges associated with integrating employees from the acquired company into our
organization.
• Retention of employees from the businesses we acquire.
• Integration of the acquired company’s accounting, management information, human resource and other
administrative systems.
• Liability for activities of the acquired company before the acquisition, including patent and trademark
infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown
liabilities.
• Litigation or other claims in connection with the acquired company, including claims from terminated
employees, customers, former stockholders, or other third parties.
• In the case of foreign acquisitions, the need to integrate operations across different cultures and
languages and to address the particular economic, currency, political and regulatory risks associated with
specific countries.
• Failure to successfully further develop the acquired technology.
Our failure to address these risks or other problems encountered in connection with our past or future
acquisitions and strategic investments could cause us to fail to realize the anticipated benefits of such acquisitions
or investments, incur unanticipated liabilities and harm our business generally.
Future acquisitions or dispositions could also result in dilutive issuances of our equity securities, the
incurrence of debt, contingent liabilities or amortization expenses, or write-offs of goodwill, any of which could
harm our financial condition. Also, the anticipated benefit of many of our acquisitions may not materialize. For
example, we have yet to realize significant revenue benefits from our acquisitions of dMarc Broadcasting (Audio
Ads) and YouTube.
Our international operations are subject to increased risks which could harm our business, operating
results, and financial condition.
International revenues accounted for approximately 51% of our total revenues in 2008, and more than half of
our user traffic came from outside the U.S. during this period. We have limited experience with operations outside
the U.S. and our ability to manage our business and conduct our operations internationally requires considerable
management attention and resources and is subject to a number of risks, including the following:
• Challenges caused by distance, language and cultural differences and by doing business with foreign
agencies and governments.
• Longer payment cycles in some countries.
• Uncertainty regarding liability for services and content.
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