Google 2009 Annual Report Download - page 56

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Please find page 56 of the 2009 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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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 our web sites or 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. 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.
AdSense for content is our online service for distributing ads from our advertisers that are relevant to content
on our Google Network members’ web sites. Under this program, we use automated technology to analyze the
meaning of the content on the web page and serve relevant ads based on the meaning of such content. For
example, a web page on an automotive blog that contains an entry about vintage cars might display ads for
vintage car parts or vintage car shows. These ads are displayed in spaces that our AdSense 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 graphic treatments that change seasonally and by geography), and
gadget ads (which are customized “mini-sites” that run as ads on AdSense publisher web sites).
For our online AdSense program, our advertisers pay us a fee each time a user clicks on one of our
advertisers’ ads displayed on our Google Network members’ web sites or, for those advertisers who choose our
cost-per-impression pricing, as their ads are displayed. To date, we have paid most of these advertiser fees to our
Google Network members, and we expect to continue doing so for the foreseeable future. We recognize these
advertiser fees as revenue and the portion of the advertiser fee we pay to our Google Network members as traffic
acquisition costs under cost of revenues. In some cases, we guarantee our Google Network members minimum
revenue share payments based on their achieving defined performance terms, such as number of search queries
or advertisements displayed. Google Network members do not pay any fees associated with the use of our
AdSense program on their web sites.
Our agreements with Google Network members consist largely of uniform online “click-wrap” agreements
that members enter into by interacting with our registration web sites. The standard agreements have no stated
term and are terminable at will. Agreements with our larger members are individually negotiated. Both the standard
agreements and the negotiated agreements contain provisions requiring us to share with the Google Network
member most of the advertiser fees generated by users clicking on ads on the Google Network member’s web site
or, for advertisers who choose our cost-per-impression pricing, as the ads are displayed on the Google Network
member’s web site.
Google TV Ads enable advertisers, operators, and programmers to buy, schedule, deliver, and measure ads on
television. We recognize as revenue the fees charged advertisers each time an ad is displayed on television.
We also offer display advertising management services such as media planning, buying, implementation, and
measurement tools for advertisers and agencies and forecasting and reporting tools for publishers. We recognize
the related fees as licensing and other revenues in the period advertising impressions are delivered.
In January 2010, we launched our mobile phone business. We will recognize fees derived from the sale of
mobile phones as licensing and other revenues in the period in which the mobile phones are delivered.
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