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2009 annual report

Table of contents

  • Page 1
    2009 annual report

  • Page 2

  • Page 3
    ... get for free a highresolution picture of their house from above, and even from the street? That is Google Earth, Maps, and Street View. Was it a foregone conclusion that we would have these kind of products now? No, it was not. This progress happened because focused teams of people made those ideas...

  • Page 4
    ...,000 daily views on YouTube. YouTube has new features like full high-definition content at 1080p and tools to help you share videos with your friends. Over the last year, YouTube has also been making a lot more money for us and our partners, with content partner ad revenue more than tripling in 2009...

  • Page 5
    ... in Google Fiber. Our goal with this project is to show what's possible by driving technological development of home Internet connections at a faster rate. If we succeed, it will benefit users everywhere, as well as our own services, which can debut amazing new capabilities using higher speed...

  • Page 6
    .... We view our search ads as information for users, just like search results. With Universal Search, we now provide results in many different formats, such as videos, maps and news, and we needed to do the same for advertisements. For example, you can now see product ads with prices and pictures of...

  • Page 7
    ... new analytics and media planning in DART for Advertisers (DFA), and have made big strides in the Google Content Network-the extensive collection of partner sites on which we run ads from our network. In 2009, we sold display advertising on that network, which includes YouTube, to 94 of the Ad Age...

  • Page 8
    ... from ad networks to agency holding companies to large publishers. Over 50 U.S. ad networks have already signed up for the new Ad Exchange. There are a ton of improvements we are focused on making in all of these areas, and I am excited about our very substantial progress to date. Google Analytics...

  • Page 9
    ... maps of streets and addresses for Mexico and the U.S.-and users have been working on building and correcting over 60 countries. Street View has exploded around the world with more than twice the countries covered and has unbelievable, higher resolution images in many places. Our Street View images...

  • Page 10
    ... number of partners. Together, we're working toward a system where everyone has increased access to these valuable texts. I am very excited about the possibilities to help expand human knowledge, create new revenue streams for content creators, and improve the quality of search for every Google user...

  • Page 11
    ...source. Sergey and I (and Google) grew up with Linux and we have all benefited greatly from that open model. We believe that it is a great way to run a healthy and vibrant high tech ecosystem. In fact it is how the Internet came to be. All of these products are open source because we believe that is...

  • Page 12
    ... our conference tables). By doing a survey of the room I noticed that only a few people were running anything besides a web browser on their laptop. This seemed rather surprising as you have this big complex OS but it was only running one program, the browser. We decided it would be a good idea to...

  • Page 13
    ... navigation system, are free on the new Android phones. Get your car dock ready and you will have an amazing experience with updated traffic and even a photo from Street View of your destination. I can't even count all the partners we have in our Open Handset Alliance (sounds like Star Wars, doesn...

  • Page 14
    ... we've undoubtedly had a lot of good luck, we have also worked really hard on search and advertising for more than a decade. That focus has paid off, both for our users and our business. Google is now a much larger company, and with size comes scrutiny and a certain amount of skepticism. We get that...

  • Page 15
    ... by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ' No È At June 30, 2009, the aggregate market value of shares held by non-affiliates of the registrant (based upon the closing sale price of such shares on The Nasdaq Global Select Market on...

  • Page 16

  • Page 17
    ... and Qualitative Disclosures About Market Risk ...Financial Statements and Supplementary Data ...Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ...Controls and Procedures ...Other Information ...Directors, Executive Officers and Corporate Governance ...Executive...

  • Page 18

  • Page 19
    ..., cost-effective online advertising. Businesses use our AdWords program to promote their products and services with targeted advertising. In addition, the third-party web sites that comprise the Google Network use our AdSense program to deliver relevant ads that generate revenue and enhance the user...

  • Page 20
    ... world. This includes providing platforms for developers to build, deploy, and run increasingly rich applications. For users, we are investing in areas to improve their experience in using web-based applications, including making browsers more stable and powerful. Products and Services for our Users...

  • Page 21
    ..., and weather conditions and forecasts. News, Finance, Maps, Image, Video, Book, Blogs and Groups Information-Users are often best served by different types of results. When relevant, we also search display results from other Google products including Google News, Google Finance, Google Maps, Google...

  • Page 22
    ... view and manage their history of past searches and the results they have clicked on, and create bookmarks with labels and notes. Google Product Search. Google Product Search helps users find and compare products from merchants and directs users to where they can buy these products. Users can search...

  • Page 23
    ... creating mailing lists and discussion forums. Google Reader. Google Reader is a free service that lets users subscribe to feeds and receive updates from multiple web sites in a single interface. Google Reader also allows users to share content with others, and functions with many types of media and...

  • Page 24
    ... Toolbar is a free application that adds a Google search box to web browsers (Internet Explorer and Firefox) and improves the user experience through features such as a pop-up blocker, that blocks pop-up advertising, translate, which enables users to automatically translate web pages in 40 languages...

  • Page 25
    ...which includes additional features, to professional designers. Building Maker allows users to easily create 3D models directly in a web browser. Android and Google Mobile Android. Android is a free, open-source mobile software platform that allows developers to create applications for mobile devices...

  • Page 26
    ...market their products and services to consumers and business users over the internet, we offer Google AdWords, an auction-based advertising program that lets advertisers deliver relevant ads targeted to search queries or web content across Google sites and through the web sites of our Google Network...

  • Page 27
    ... that lets advertisers quickly implement ad campaigns on Google properties and the web sites of our Google Network members. Ads are ranked for display in AdWords based on a combination of the maximum cost-per-click pricing set by the advertiser and click-through rates and other factors used to...

  • Page 28
    ... businesses launch and manage large ad campaigns with hundreds or even thousands of targeted keywords. The AdWords API and Commercial Developer Program. For large advertisers as well as third parties, Google's free AdWords API service lets developers engineer computer programs that interact directly...

  • Page 29
    ... partners have set aside on their web sites for our AdWords content. AdSense for content allows a variety of ad types to be shown, including text ads, display ads such as image ads and video ads, and link units (which are sets of clickable links to topic pages related to page content). We share...

  • Page 30
    ...Feeds is a free program that allows publishers to monetize their feeds through text ads targeted to the content of the feed. Feeds are content streams that users subscribe to that contain structured data such as stock and financial information, web blog posts, and weather reports. Google AdSense for...

  • Page 31
    ... tools for media planning, buying, selling, ad delivery, measurement, and optimization. The key technologies included in this platform are: • Google Ad Planner and MediaVisor. This research and media planning tool allows agencies and advertisers to identify the web sites their target customers...

  • Page 32
    ...for mid-size document counts, and the GB-9009, with the ability to search billions of documents. The appliances search customer-facing web sites and company-wide intranet applications and support centralized deployments for global business units. Google Site Search. The Google Site Search product is...

  • Page 33
    ... sales team focuses on attracting and supporting companies around the world with the largest advertising budgets. Our AdSense program follows a similar model. Most of the web sites in the Google Network sign up for AdSense using an automated online process. Our direct sales force focuses on building...

  • Page 34
    ...alone mobile applications, instead of through search engines. Providers of online products and services. We also provide a number of online products and services, including Gmail, YouTube, and Google Docs, that compete directly with new and established companies that offer communication, information...

  • Page 35
    ...We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the internet. In addition, laws and regulations relating to user privacy, freedom of expression, content, advertising, information security, and intellectual property rights are being...

  • Page 36
    ... global initiatives, including Google Flu Trends, which uses search data to estimate global flu activity, GoogleServe, our annual company-wide community service event, and products like Google News, orkut, and Android. We aim to reflect the globally diverse audience of our products in our employee...

  • Page 37
    ...technology, shifting user needs and frequent introductions of new products and services. We have many competitors in different industries, including traditional search engines, vertical search engines and e-commerce sites, social networking sites, traditional media companies, and providers of online...

  • Page 38
    ... of users, advertisers, Google Network members, and other partners. We believe that the importance of brand recognition will increase due to the relatively low barriers to entry in the internet market. Our brand may be negatively impacted by a number of factors, including service outages, product...

  • Page 39
    ... 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...

  • Page 40
    ... disclose sensitive information in order to gain access to our data or our users' or customers' data. Any such breach or unauthorized access could result in significant legal and financial exposure, damage to our reputation, and a loss of confidence in the security of our products and services that...

  • Page 41
    ...nearly all of our products and services are web based, the amount of data we store for our users on our servers (including personal information) has been increasing. Any systems failure or compromise of our security that results in the release of our users' data could seriously limit the adoption of...

  • Page 42
    ... of our products, services, and brand. Our patents, trademarks, trade secrets, copyrights, and other intellectual property rights are important assets for us. Various events outside of our control pose a threat to our intellectual property rights as well as to our products and services. For example...

  • Page 43
    .... We have also had copyright claims filed against us by companies alleging that features of certain of our products and services, including Google Web Search, Google News, Google Video, Google Image Search, Google Book Search, and YouTube, infringe the rights of others. In the U.S. we announced...

  • Page 44
    ... products and services may not work or be viewable on these devices as a result. We have limited experience to date in operating versions of our products and services developed or optimized for users of alternative devices, such as Google Mobile and Android, or in designing and selling alternative...

  • Page 45
    ...upon the continued service of key members of our senior management team. In particular, our CEO, Eric Schmidt, and our founders, Larry Page and Sergey Brin, are critical to the overall management of Google as well as the development of our technology, our culture, and our strategic direction. All of...

  • Page 46
    ... the loss of users and advertisers. Our products and services depend on the ability of our users to access the internet, and certain of our products require significant bandwidth to work effectively. Currently, this access is provided by companies that have significant and increasing market power in...

  • Page 47
    ... stock by us or by our stockholders. Short sales, hedging, and other derivative transactions on shares of our Class A common stock (including derivative transactions under our Transferable Stock Option (TSO) program). In addition, the stock market in general, and the market for technology companies...

  • Page 48
    ... sale of our company or its assets, for the foreseeable future. This concentrated control limits our stockholders' ability to influence corporate matters and, as a result, we may take actions that our stockholders do not view as beneficial. As a result, the market price of our Class A common stock...

  • Page 49
    ... of our products, services, and brand" and "We are, and may in the future be, subject to intellectual property rights claims, which are costly to defend, could require us to pay damages, and could limit our ability to use certain technologies in the future" in Item 1A of this Annual Report on Form...

  • Page 50
    ...common stock, and the closing price of our Class A common stock was $529.94 per share as reported by The Nasdaq Global Select Market. Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of...

  • Page 51
    ...2004 through December 31, 2009 of the cumulative total return for our Class A common stock, the S&P 500 Index, The Nasdaq Composite Index, and the RDG Internet Composite Index. Such returns are based on historical results and are not intended to suggest future performance. Data for the S&P 500 Index...

  • Page 52
    ... are able to sell vested stock options to participating financial institutions in an online auction as an alternative to exercising options in the traditional method and then selling the underlying shares. The following table provides information with respect to sales by our employees of TSOs during...

  • Page 53
    ..., except per share amounts) 2009 Consolidated Statements of Income Data: Revenues ...Costs and expenses: Cost of revenues ...Research and development ...Sales and marketing ...General and administrative ...Contribution to Google Foundation ...Total costs and expenses ...Income from operations...

  • Page 54
    ... continue to invest in our business, including increasing our hiring rate, and to make acquisitions; the decline in our revenue growth rate; our expectation that growth in advertising revenues from our web sites will continue to exceed that from our Google Network members' web sites, which will have...

  • Page 55
    ... management services to advertisers, ad agencies, and publishers, as well as licensing our enterprise products, search solutions, and web search technology. Google AdWords is our automated online program that enables advertisers to place targeted text-based and display ads on our web sites...

  • Page 56
    ... for content partners have set aside on their web sites. AdSense for content allows a variety of ad types to be shown, including text ads, image ads, Google Video Ads, link units (which are sets of clickable links to topic pages related to page content), themed units (which are regular text ads with...

  • Page 57
    ... and quality of ads displayed with each search results page. The number of searches initiated at our web sites and our Google Network members' web sites and the underlying purpose of these searches (for instance, whether they are for academic research, to find a news article, or to find a product or...

  • Page 58
    ... costs of the mobile phones that we sell. In particular, traffic acquisition costs as a percentage of advertising revenues may increase in the future if we are unable to continue to improve the monetization or generation of revenues from traffic on our web sites and our Google Network members' web...

  • Page 59
    ... Year Ended December 31, 2007 2008 2009 Consolidated Statements of Income Data: Revenues ...Costs and expenses: Cost of revenues ...Research and development ...Sales and marketing ...General and administrative ...Total costs and expenses ...Income from operations ...Impairment of equity investments...

  • Page 60
    ... improvements, and the continued global expansion of our products, our advertiser base and our user base, as well as an increase in the number of Google Network members. The increase in the average cost-per-click paid by our advertisers was partially the result of the general weakening of...

  • Page 61
    ...15 of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information about geographic areas. Costs and Expenses Cost of Revenues Cost of revenues consists primarily of traffic acquisition costs. Traffic acquisition costs consist of amounts...

  • Page 62
    ...license their video and other content. In a number of these arrangements we display ads on the pages of our web sites and our Google Network members' web sites from which the content is viewed and share most of the fees these ads generate with the content providers and the Google Network members. To...

  • Page 63
    ... related to acquiring content on our web sites of $106.0 million. The decrease in traffic acquisition costs as a percentage of advertising revenues was primarily due to an increase in the proportion of advertising revenues coming from our web sites rather than from our Google Network members' web...

  • Page 64
    ... related costs for personnel engaged in customer service and sales and sales support functions, as well as advertising and promotional expenditures. Sales and marketing expenses increased $37.7 million from 2008 to 2009. This increase was primarily due to an increase in advertising and promotional...

  • Page 65
    ... to the Exchange have an exercise price of $308.57 per share, the closing price of Google's Class A common stock as reported by The Nasdaq Global Select Market on March 6, 2009. Options granted pursuant to the Exchange have a new vesting schedule determined by adding 12 months to each vesting...

  • Page 66
    ... Policies and Estimates included elsewhere in this Annual Report on Form 10-K for additional information about our provision for income taxes. A reconciliation of the federal statutory income tax rate to our effective tax rate is set forth in Note 14 of Notes to Consolidated Financial Statements...

  • Page 67
    ... quarterly results, including fluctuations in sequential revenue growth rates. Mar 31, 2008 Jun 30, 2008 Quarter Ended Sep 30, Dec 31, Mar 31, Jun 30, 2008 2008 2009 2009 (in millions, except per share amounts) (unaudited) Sep 30, 2009 Dec 31, 2009 Consolidated Statements of Income Data: Revenues...

  • Page 68
    ... U.S., debt instruments issued by foreign governments, time deposits, money market mutual funds, mortgage-backed securities, and corporate securities. Note 3 of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K describes further the composition of our...

  • Page 69
    ... in prepaid revenue share, expenses, and other assets, an increase in accrued expenses and other liabilities of $243.1 million which is a direct result of the growth of our business, and a net increase in income taxes payable and deferred income taxes of $217.5 million, which includes the same...

  • Page 70
    ... of marketable securities of $337.6 million. Capital expenditures are mainly for the purchase of information technology assets. In order to manage expected increases in internet traffic, advertising transactions, and new products and services, and to support our overall global business expansion...

  • Page 71
    ... 31, 2009. This amount is not included in the above table because we have the right to cancel the purchase orders prior to the date of delivery. The majority of our non-cancelable contractual obligations are related to data center operations and facility build-outs. Other Long-Term Liabilities Other...

  • Page 72
    ... Policies and Estimates We prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the U.S. In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses, as well as related...

  • Page 73
    ... a corresponding charge to our Consolidated Statement of Income. Effect of Recent Accounting Pronouncements In June 2009, the Financial Accounting Standards Board (FASB) issued a new accounting standard which changes the consolidation rules as they relate to variable interest entities. Specifically...

  • Page 74
    ... RISK We are exposed to financial market risks, including changes in currency exchange rates and interest rates. Foreign Exchange Risk Economic Exposure We transact business in various foreign currencies and have significant international revenues as well as costs denominated in foreign currencies...

  • Page 75
    ... in exchange rates of 20% were applied to total monetary assets denominated in currencies other than the local currencies at the balance sheet dates to compute the adverse impact these changes would have had on our income before taxes in the near term. Interest Rate Risk We invest our excess cash...

  • Page 76
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Google Inc. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm ...Financial Statements: Consolidated Balance Sheets ...Consolidated Statements of Income ...Consolidated Statements of ...

  • Page 77
    ... consolidated balance sheets of Google Inc. as of December 31, 2008 and 2009, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2009. Our audits also included the financial statement schedule listed...

  • Page 78
    ... have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Google Inc. as of December 31, 2008 and 2009, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the...

  • Page 79
    Google Inc. CONSOLIDATED BALANCE SHEETS (In thousands, except par value per share) As of December 31, 2008 2009 Assets Current assets: Cash and cash equivalents ...Marketable securities ...Accounts receivable, net of allowance of $80,086 and $78,884 ...Deferred income taxes, net ...Income taxes ...

  • Page 80
    Google Inc. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) 2007 Year Ended December 31, 2008 2009 Revenues ...Costs and expenses: Cost of revenues (including stock-based compensation expense of $22,335, $41,340, $47,051) ...Research and development (including stock-based...

  • Page 81
    Google Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands) Class A and Class B Common Stock Shares Amount Additional Paid-In Capital Accumulated Other Comprehensive Income Total Stockholders' Equity Retained Earnings Balance at January 1, 2007 ...308,997 $309 $ 11,882,906 Stock-...

  • Page 82
    Google Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) 2007 Year Ended December 31, 2008 2009 Operating activities Net income ...Adjustments: Depreciation and amortization of property and equipment ...Amortization of intangible and other assets ...Stock-based compensation expense ......

  • Page 83
    .... We provide highly targeted advertising and global internet search solutions as well as hosted applications. Basis of Consolidation The consolidated financial statements include the accounts of Google and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated...

  • Page 84
    ... CONSOLIDATED FINANCIAL STATEMENTS-(Continued) We recognize as revenues the fees charged advertisers each time a user clicks on one of the text-based ads that are displayed next to the search results pages on our site or on the search results pages or content pages of our Google Network members' web...

  • Page 85
    ...access points for impairment by distribution partner, type, and geography, and we have not made any impairment to date. Prepaid revenue share and distribution fees are included in prepaid revenue share, expenses, and other assets on the accompanying Consolidated Balance Sheets. Cost of revenues also...

  • Page 86
    ... and 47% of our revenues from customers based in the U.S., with the majority of customers outside of the U.S. located in Europe and Japan. Many of our Google Network members are in the internet industry. We perform ongoing evaluations to determine customer credit and we limit the amount of credit we...

  • Page 87
    ...we may sell these securities prior to their stated maturities. As we view these securities as available to support current operations, we classify securities with maturities beyond 12 months as current assets under the caption marketable securities in the accompanying Consolidated Balance Sheets. We...

  • Page 88
    ... for buildings and leasehold improvements commences once they are ready for their intended use. Software Development Costs We expense software development costs, including costs to develop software products or the software component of products to be marketed to external users, before technological...

  • Page 89
    ...NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) net translation gains in 2007, $84.2 million of net translation losses in 2008, and $76.7 million of net translation gains in 2009. We record net gains and losses resulting from foreign exchange transactions as a component of interest income and...

  • Page 90
    ...our consolidated financial statements would have been immaterial. Note 2. Net Income Per Share of Class A and Class B Common Stock We compute net income per share of Class A and Class B common stock using the two-class method. Basic net income per share is computed using the weighted-average number...

  • Page 91
    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The following table sets forth the computation of basic and diluted net income per share of Class A and Class B common stock (in thousands, except per share amounts): 2007 Class A Class B Year Ended December 31, 2008 Class A Class B ...

  • Page 92
    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The net income per share amounts are the same for Class A and Class B common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. Note 3. Cash and ...

  • Page 93
    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) As of December 31, 2009 Gross Gross Unrealized Unrealized Gains Losses Adjusted Cost Fair Value Time deposits ...U.S. government agencies ...U.S. government notes ...Foreign government bonds ...Municipal securities ...Money market...

  • Page 94
    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The following tables presents gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2008 and 2009, aggregated by investment category and the length of time that ...

  • Page 95
    ... to accumulated other comprehensive income (AOCI) on the accompanying Consolidated Balance Sheets. Cash Flow Hedges We use options designated as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the U.S. dollar. We initially report any gain on the...

  • Page 96
    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The notional principal of foreign exchange contracts to purchase U.S. dollars with Euros was â,¬1.9 billion (or approximately $2.6 billion) and â,¬1.6 billion (or approximately $2.2 billion) at December 31, 2008 and December 31, 2009...

  • Page 97
    ... December 31, 2008 2009 Balance Sheet Location Derivative Assets Derivatives designated as hedging instruments: Foreign exchange option contracts ... Foreign exchange forward contracts ... Prepaid revenue share, expenses and other assets, current and non-current Prepaid revenue share, expenses and...

  • Page 98
    ...NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Gains (Losses) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)1 Year Ended December 31, Location 2008 2009 Derivatives in Cash Flow Hedging Relationship Foreign exchange option contracts...

  • Page 99
    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) We classify our cash equivalents and marketable securities within Level 1 or Level 2. This is because we value our cash equivalents and marketable securities using quoted market prices or alternative pricing sources and models ...

  • Page 100
    ... TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) As of December 31, 2009 Fair value measurement at reporting date using Quoted Prices in Active Significant Other Significant Markets for Identical Assets Observable Inputs Unobservable Inputs (Level 1) (Level 2) (Level 3) Description Assets Cash...

  • Page 101
    ...): As of December 31, 2008 2009 Information technology assets ...Construction in progress ...Land and buildings ...Leasehold improvements ...Furniture and fixtures ...Total ...Less accumulated depreciation and amortization ...Property and equipment, net ...Note 7. Acquisitions $3,573,499 1,643,136...

  • Page 102
    ... approval. We expect this transaction to close in the first quarter of 2010. On November 9, 2009, we signed a definitive agreement to acquire AdMob, Inc., a privately-held mobile display ads technology provider, for $750 million in Google Class A common stock. The completion of this transaction is...

  • Page 103
    ... TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Patents and developed technology, customer relationships, and tradenames and other have weightedaverage useful lives from the date of purchase of 4.0 years, 6.4 years, and 4.6 years. Amortization expense of acquisition-related intangible assets for...

  • Page 104
    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The components of accumulated other comprehensive income are as follows (in thousands): As of December 31, 2008 2009 Unrealized net gains on available-for-sale investments, net of taxes ...Foreign currency translation adjustment ......

  • Page 105
    ... of our products and services, including Google Web Search, Google News, Google Video, Google Image Search, Google Book Search, and YouTube, infringe their rights. Adverse results in these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements or orders...

  • Page 106
    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) continue to increase. Adverse results in these lawsuits, or our decision to license patents based upon these demands, may result in substantial costs and, in the case of adverse litigation results, could prevent us from offering ...

  • Page 107
    ... on that of companies that had option vesting and contractual terms, expected stock volatility, employee demographics, and physical locations that were similar to ours because we had limited relevant historical information to support the expected sale and exercise behavior of our employees who had...

  • Page 108
    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The following table summarizes the activities for our options for the year ended December 31, 2009: Options Outstanding WeightedAverage Remaining WeightedContractual Average Term Exercise Price (in years) Number of Shares Aggregate...

  • Page 109
    ... have an exercise price of $308.57 per share, the closing price of our Class A common stock as reported by The Nasdaq Global Select Market on March 6, 2009. Options granted pursuant to the Exchange have a new vesting schedule determined by adding 12 months to each vesting date under the exchanged...

  • Page 110
    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Note 13. 401(k) Plan We have a 401(k) Savings Plan (401(k) Plan) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, participating employees may elect to ...

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    ... for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows (in thousands): As of December 31, 2008 2009 Deferred tax assets: Stock-based compensation expense ...State taxes ...Capital loss...

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    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Uncertain Tax Positions The following table summarizes the activity related to our gross unrecognized tax benefits from January 1, 2007 to December 31, 2009 (in thousands): Balance as of January 1, 2007 ...Increases related to prior ...

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    Google Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Revenues by geography are based on the billing address of the advertiser. The following table sets forth revenues and long-lived assets by geographic area (in thousands): 2007 Year Ended December 31, 2008 2009 Revenues: United ...

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    ... of our internal control over financial reporting as of December 31, 2009 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report which is included in Item 8 of this Annual Report on Form 10-K. ITEM 9B. OTHER INFORMATION Not applicable. 96

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    ...Directors, Chief Executive Officer and Director President of Technology and Director President of Products and Director President, Global Sales Operations and Business Development Senior Vice President of Corporate Development and Chief Legal Officer Senior Vice President and Chief Financial Officer...

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    ... as Chief Financial Officer of SmartForce, an educational software applications company. Prior to that, David was a partner at the law firm of Wilson Sonsini Goodrich & Rosati. David holds a J.D. from Stanford University and a Bachelor of Arts degree in history from Santa Clara University. Patrick...

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    ...by this item is included under the captions "Certain Relationships and Related Transactions" and "Corporate Governance-Independence of Directors" in the 2010 Proxy Statement and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this item...

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    ... (a) We have filed the following documents as part of this Annual Report on Form 10-K: 1. Consolidated Financial Statements Reports of Independent Registered Public Accounting Firm ...Financial Statements: Consolidated Balance Sheets ...Consolidated Statements of Income ...Consolidated Statements of...

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    ... Title Date /S/ ERIC E. SCHMIDT Eric E. Schmidt Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer) Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) President of Technology and Director President of Products and...

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    ... Class A Common Stock certificate Specimen Class B Common Stock certificate Form of Warrant Agreement dated April 20, 2007 among Google Inc., Citigroup Global Markets Inc. as Warrant Agent, and Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., Credit Suisse Management LLC, and UBS...

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    ...restricted stock unit agreement 2004 Stock Plan-Amendment to stock option agreements 2004 Stock Plan-Form of stock option agreement (TSO Program) Keyhole, Inc. 2000 Equity Incentive Plan, as amended Quarterly Report on Form 10-Q (File No. 000-50726) August 9, 2007 10.01 Registration Statement on...

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    ... Click Holding Corp. 2005 Stock Incentive Plan Offer Letter between Google Inc. and Patrick Pichette dated June 6, 2008 List of Subsidiaries of Registrant Consent of Independent Registered Public Accounting Firm Power of Attorney (incorporated by reference to the signature page of this Annual Report...

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    ... Indicates management compensatory plan, contract or arrangement. Confidential treatment has been requested for portions of this exhibit. Filed herewith. Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or...

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    ... management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 12, 2010 By: /s/ ERIC E. SCHMIDT 3. 4. Name: Eric E. Schmidt Title: Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer...

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    ... that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; (b) Designed such internal control over financial reporting, or caused...

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    ... and that information contained in this Annual Report on Form 10-K fairly presents in all material respects the financial condition and results of operations of Google Inc. By: /S/ ERIC E. SCHMIDT Name: Eric E. Schmidt Title: Chairman of the Board of Directors and Chief Executive Officer (Principal...

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    ... Report (including the Founders' Letter) contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, but are not limited to, statements related to improvements to our search engine, advertising systems, and products and services...

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