Google 2008 Annual Report Download - page 54

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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;
• 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 employee stock
options exchange program;
• regarding the structure and timing of our employee stock option exchange program;
• that we will continue to pay most of the Google AdSense fees we receive from advertisers to our Google
Network members;
• that we will continue to take steps to improve the relevance of the ads we deliver;
• that we may continue to take steps to reduce the number of accidental clicks;
• that we will continue to make investments and acquisitions;
• that our cost of revenues and traffic acquisition costs may increase in dollars and as a percentage of
revenues;
• regarding the increase of research and development and sales and marketing expenses in the future;
• regarding the increase of costs related to hedging activity under our foreign exchange risk management
program;
• regarding fluctuations in paid clicks;
• regarding the sufficiency of our existing cash, cash equivalents, marketable securities and cash
generated from operations;
• regarding fluctuations in our effective tax rate;
• regarding continued investments in international markets;
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 Part I, 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.
38