Google 2008 Annual Report Download - page 44

In addition, we believe that our corporate culture fosters innovation, creativity and teamwork. As our
organization grows, and we are required to implement more complex organizational management structures, we
may find it increasingly difficult to maintain the beneficial aspects of our corporate culture. This could negatively
impact our future success.
We have a short operating history and a relatively new business model in an emerging and rapidly
evolving market. This makes it difficult to evaluate our future prospects and may increase the risk that
we will not continue to be successful.
We first derived revenue from our online search business in 1999 and from our advertising services in 2000,
and we have only a short operating history with our cost-per-click advertising model, which we launched in 2002
and our cost-per-impression advertising model which we launched in the second quarter of 2005. As a result, we
have only a short operating history to aid in assessing our future prospects. Also, we derive nearly all of our
revenues from online advertising, which is an immature industry that has undergone rapid and dramatic changes in
its short history. We will encounter risks and difficulties as a company operating in a new and rapidly evolving
market. We may not be able to successfully address these risks and difficulties, which could materially harm our
business and operating results.
We may have difficulty scaling and adapting our existing architecture to accommodate increased
traffic and technology advances or changing business requirements, which could lead to the loss of
users, advertisers and Google Network members, and cause us to incur expenses to make architectural
changes.
To be successful, our network infrastructure has to perform well and be reliable. The greater the user traffic
and the greater the complexity of our products and services, the more computing power we will need. We have
spent and expect to continue to spend substantial amounts on the purchase and lease of data centers and
equipment and the upgrade of our technology and network infrastructure to handle increased traffic on our web
sites and to roll out new products and services. This expansion is expensive and complex and could result in
inefficiencies or operational failures. If we do not expand successfully, or if we experience inefficiencies and
operational failures, the quality of our products and services and our users’ experience could decline. This could
damage our reputation and lead us to lose current and potential users, advertisers and Google Network members.
Cost increases, loss of traffic or failure to accommodate new technologies or changing business requirements
could harm our operating results and financial condition.
We rely on bandwidth providers, data centers and others in providing products and services to our
users, and any failure or interruption in the services and products provided by these third parties could
damage our reputation and harm our ability to operate our business.
We rely on vendors, including data center and bandwidth providers in providing products and services to our
users. Any disruption in the network access or colocation services provided by these providers or any failure of
these providers to handle current or higher volumes of use could significantly harm our business. Any financial or
other difficulties our providers face may have negative effects on our business. We exercise little control over these
vendors, which increases our vulnerability to problems with the services they provide. We license technology and
related databases to facilitate aspects of our data center and connectivity operations including internet traffic
management services. We have experienced and expect to continue to experience interruptions and delays in
service and availability for such elements. Any errors, failures, interruptions or delays in connection with these
technologies and information services could harm our relationship with users, adversely affect our brand and
expose us to liabilities.
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