Google 2010 Annual Report Download - page 27

adequate patent protection for certain innovations that later turn out to be important. Furthermore, there is always
the possibility, despite our efforts, that the scope of the protection gained will be insufficient or that an issued
patent may be deemed invalid or unenforceable.
We also seek to maintain certain intellectual property as trade secrets. The secrecy could be compromised by
outside parties, or by our employees, which would cause us to lose the competitive advantage resulting from these
trade secrets.
We also face risks associated with our trademarks. For example, there is a risk that the word “Google” could
become so commonly used that it becomes synonymous with the word “search.” If this happens, we could lose
protection for this trademark, which could result in other people using the word “Google” to refer to their own
products, thus diminishing our brand.
Any significant impairment of our intellectual property rights could harm our business and our ability to
compete. Also, protecting our intellectual property rights is costly and time consuming. Any increase in the
unauthorized use of our intellectual property could make it more expensive to do business and harm our operating
results.
Our operating results may fluctuate, which makes our results difficult to predict and could cause our
results to fall short of expectations.
Our operating results may fluctuate as a result of a number of factors, many outside of our control. As a
result, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely
on our past results as an indication of our future performance. Our quarterly, year-to-date, and annual expenses as
a percentage of our revenues may differ significantly from our historical or projected rates. Our operating results in
future quarters may fall below expectations. Any of these events could cause our stock price to fall. Each of the
risk factors listed in this section and the following factors may affect our operating results:
• Our ability to continue to attract users to our websites and satisfy existing users on our websites.
• Our ability to monetize (or generate revenues from) traffic on our websites and our Google Network
members’ websites.
• Our ability to attract advertisers to our AdWords program, and our ability to attract websites to our
AdSense program.
• The mix in our revenues between those generated on our websites and those generated through our
Google Network.
• The amount of revenues and expenses generated and incurred in currencies other than U.S. dollars, and
our ability to manage the resulting risk through our foreign exchange risk management program.
• The amount and timing of operating costs and expenses and capital expenditures related to the
maintenance and expansion of our businesses, operations, and infrastructure.
• Our focus on long-term goals over short-term results.
• The results of our investments in risky projects, including new business strategies and new products,
services, and technologies.
• Our ability to keep our websites operational at a reasonable cost and without service interruptions.
• Our ability to generate significant revenues from services in which we have invested considerable time
and resources, such as Google Checkout.
Because our business is changing and evolving, our historical operating results may not be useful to you in
predicting our future operating results. In addition, advertising spending has historically been cyclical in nature,
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