Google 2008 Annual Report Download - page 55

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Please find page 55 of the 2008 Google annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

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Overview
Google is a global technology leader focused on improving the ways people connect with information. Our
innovations in web search and advertising have made our web site a top internet property and our brand one of the
most recognized in the world. Our mission is to organize the world’s information and make it universally accessible
and useful. We serve three primary constituencies:
•Users. We provide users with products and services that enable people to more quickly and easily find,
create and organize information that is useful to them.
•Advertisers. We provide advertisers with cost-effective ways to deliver online ads, as well as ads on
traditional media such as TV and radio (offline ads), to customers across Google sites and through the
Google Network, which is the network of online and offline third parties that use our advertising programs
to deliver relevant ads with their search results and content.
•Google Network Members and Other Content Providers. We provide the online and offline members of our
Google Network with our Google AdSense programs. These include programs through which we
distribute our advertisers’ AdWords ads for display on the web sites of our Google Network members as
well as programs to deliver ads on television and radio broadcasts. We share most of the fees these ads
generate with our Google Network members, thereby creating an important revenue stream for them. In
addition, we have entered into arrangements with other content providers under which we distribute or
license their video and other content, and we may display ads next to or as part of this content on the
pages of our web sites and our Google Network members’ web sites. We share most of the fees these ads
generate with these content providers and our Google Network members, thereby creating an important
revenue stream for these partners.
How We Generate Revenue
Advertising revenues made up 99% of our revenues in 2006 and 2007 and 97% of our revenues in 2008.
We derive most of our additional revenues from offering internet ad serving and management services to
advertisers and ad agencies, the license of our web search technology and the license of our search solutions to
enterprises.
Google AdWords is our automated online program that enables advertisers to place targeted text-based and
display ads on our web sites and our Google Network members’ web sites. Most of our AdWords customers pay us
on a cost-per-click basis, which means that an advertiser pays us only when a user clicks on one of its ads. We also
offer AdWords on a cost-per-impression basis that enables advertisers to pay us based on the number of times
their ads appear on our web sites and our Google Network members’ web sites as specified by the advertiser. For
advertisers using our AdWords cost-per-click pricing, we recognize as revenue the fees charged advertisers each
time a user clicks on one of the ads that appears next to the search results on our web sites or next to the search
results or content on our Google Network members’ web sites. For advertisers using our AdWords
cost-per-impression pricing, we recognize as revenue the fees charged advertisers each time their ads are
displayed on the Google Network members’ web sites. Our AdWords agreements are generally terminable at any
time by our advertisers.
Google AdSense refers to the online programs through which we distribute our advertisers’ AdWords ads for
display on the web sites of our Google Network members as well as programs to deliver ads on television and radio
broadcasts. Our AdSense programs include AdSense for search and AdSense for content.
AdSense for search is our online service for distributing relevant ads from our advertisers for display with
search results on our Google Network members’ sites. To use AdSense for search, most of our AdSense for search
partners add Google search functionality to their web pages in the form of customizable Google search boxes.
When visitors of these web sites search either the web site or the internet using these customizable search boxes,
we display relevant ads on the search results pages, targeted to match user search queries. Ads shown through
AdSense for search are text ads.
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