Google 2011 Annual Report Download

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Table of contents

  • Page 1

  • Page 2

  • Page 3
    ... and soul of a start-up. In April 2011, I began by reorganizing the management team around our core products to improve responsibility and accountability across Google. I also kicked off a big clean-up. Google has so many opportunities that, unless we make some hard choices, we end up spreading...

  • Page 4
    .... If you see a great movie, you want to recommend it to friends. Google+ makes sharing super easy by creating a social layer across all our products so users connect with the people who matter to them. When you sign up for Google+, you can use Circles to group people into different categories, such...

  • Page 5
    ... across the web, with Google users being able to recommend search results and videos they like-a goal we've had ever since we started the company. Activity on the Google+ Stream itself is increasing too. We're excited about the tremendous speed with which some people have amassed over one million...

  • Page 6
    ... in the world! Today, it's tough for Google to find the right Ben for me. Many people share only their public profiles, not their posts, photos, or connections. And privacy considerations certainly limit the information that can be shared between platforms-even if the third parties hosting it were...

  • Page 7
    ...results in exciting new ways. It's about building genuine knowledge into our search engine. TAKING ACTIONS In the early days of Google you would type in a query, we'd return ten blue links, and you would move on fairly happily. Today you want more. If you search for "weather san francisco", chances...

  • Page 8
    ... ï¬,ights with prices, and you can book directly with the airline-or click on an ad for an online travel agency. We're also experimenting with a feature called Hotel Finder, which enables you to compare prices and book a hotel room right from the results page. It's all about speeding things up so...

  • Page 9
    ... device, and it just works! And with Google Play, movies, books, apps, and games are all accessible from the web or an Android device-no cables, downloading, or syncing required. I think there is a theme here! In August, we announced plans to acquire Motorola Mobility, a company that bet big on...

  • Page 10
    ... to be made apart from some banner advertising. We felt the exact opposite: that search quality was very poor, and that awesome user experiences would clearly make money. Today it feels like we're watching the same movie in slow motion over again. We have tremendous new products that were seen as...

  • Page 11
    ... more than 350 million people. And our enterprise customers love it too. Over 5,000 new businesses and educational establishments now sign up every day. In 2006, when Google acquired YouTube, we faced a lot of skepticism. Today, YouTube has over 800 million monthly users uploading over an hour of...

  • Page 12
    ...drop a photo into Google and search by image-we have a very happy user. And when our products don't work or we make mistakes, it's easy for users to go elsewhere because our competition is only a click away. Users place a lot of trust in Google when they store data, like emails and documents, on our...

  • Page 13
    ..., she invested $5 a day in Google AdWords and doubled her revenue. Today over 80 percent of her orders come from the web. Taylor's Bike Shop in Utah, a family-run store, saw increase in sales of over 50 percent when they started using AdWords. Today they maintain a staff of eight people on a steady...

  • Page 14
    .... The same is true for our newer technologies like DoubleClick for online publishers and AdMob for mobile developers. YouTube also generates healthy revenue for Google and our content partners-in fact, partner ad revenue has more than doubled for the fourth year in a row. One thing I've learned...

  • Page 15
    ... behind AdSense, which, as I mentioned earlier, has paid out over $30 billion to partners, was the result of a "failed" more ambitious project to understand the web. The team failed at understanding the web, mostly, I think, because they were distracted by their work making advertisements amazingly...

  • Page 16
    ...nd information quickly and easily, to choose any video from millions on YouTube rather than just a few TV channels. People are buying more devices and using them more because technology is playing an increasingly important role in our lives. I believe that by producing innovative technology products...

  • Page 17
    ...that Google remains a successful, growing business that can generate significant returns for everyone involved. CORPORATE STRUCTURE When we went public, we created a dual-class voting structure. Our goal was to maintain the freedom to focus on the long term by ensuring that the management team, in...

  • Page 18
    ... our management team to follow the long term, innovative approach emphasized earlier...The main effect of this structure is likely to leave our team, especially Sergey and me, with increasingly significant control over the company's decisions and fate, as Google shares change hands...New investors...

  • Page 19
    ... and YouTube, which now enjoy phenomenal usage, were made with a significant degree of independence. We have a structure that prevents outside parties from taking over or unduly inï¬,uencing our management decisions. However, day-to-day dilution from routine equity-based employee compensation and...

  • Page 20
    ...one new share of the non-voting stock, giving investors twice the number of shares they had before. It's effectively a two-for-one stock split-something many of our investors have long asked us for. These non-voting shares will be available for corporate uses, like equity-based employee compensation...

  • Page 21
    Having the ï¬,exibility to use stock without diluting our structure will help ensure we are set up for success for decades to come. In November 2009, Sergey and I published plans to sell a modest percentage of our overall stock, ending in 2015. We are currently halfway through those plans and we don...

  • Page 22
    ... 12 is consistent with the governance philosophy we articulated when we took the company public, as well as the trend for newer technology companies to adopt strong dual-class structures. We believe that it will provide great competitive strength-insulating Google from short-term pressures, whatever...

  • Page 23
    "We have a strong commitment to our users worldwide, their communities, the web sites in our network, our advertisers, our investors, and of course our employees. Sergey and I, and the team will do our best to make Google a long term success and the world a better place." Larry Page CEO and Co-...

  • Page 24
    ... will be able to trade these shares, just as they can with Class A shares today. Except for voting rights, the Class C shares will have the same rights as the existing Class A and Class B shares. As is typically the case with stock splits, the Class C stock dividend will be tax-free. One thing to...

  • Page 25
    ... of Directors has not set a record date for the issuance of the Class C dividend and currently expects to set the date following the annual meeting. Our proxy statement, filed with the SEC, contains further details regarding the proposal. David Drummond Chief Legal Officer, Google Inc. April 2012...

  • Page 26
    XXIV

  • Page 27
    ... filer ' Smaller reporting company ' Indicate 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, 2011, the aggregate market value of shares held by non-affiliates of the registrant (based upon the closing sale price of such...

  • Page 28

  • Page 29
    ... About Market Risk ...Financial Statements and Supplementary Data ...Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ...Controls and Procedures ...Other Information ... 22 25 26 45 48 83 83 83 Directors, Executive Officers and Corporate Governance ...Executive...

  • Page 30
    ... to fluctuations in foreign currency exchange rates; the increase of costs related to hedging activities under our foreign exchange risk management program; our expectation that our cost of revenues, research and development expenses, sales and marketing expenses, and general and administrative...

  • Page 31
    ..., unless the context indicates otherwise. "Google" and other trademarks of ours appearing in this report are our property. This report contains additional trade names and trademarks of other companies. We do not intend our use or display of other companies' trade names or trademarks to imply an...

  • Page 32
    ... relevant, cost-effective online advertising. Businesses use our AdWords program to promote their products and services with targeted advertising. In addition, the third parties that comprise the Google Network use our AdSense program to deliver relevant ads that generate revenue and enhance...

  • Page 33
    ... 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 websites and our Google Network Members' websites as specified by the advertiser. Our AdSense program enables websites that...

  • Page 34
    ... as click-to-call ads in which advertisers can include a phone number within ad text. In 2010, we acquired AdMob, Inc. (AdMob), which offers effective ad units and solutions for application developers and advertisers. We continue to invest in improving users' access to Google services through their...

  • Page 35
    ... publicfacing sites with Google Site Search (custom search engine), and Google Commerce Search (for online retail enterprises). We also provide versions of our Google Maps Application Programming Interface (API) for businesses (including fully interactive Google Maps for public and internal websites...

  • Page 36
    ... and offline. Mobile applications on iPhone and Android devices, which allow users to access information directly from a publisher without using search engines. Providers of online products and services. A number of our online products and services, including Gmail, YouTube, and Google Docs, compete...

  • Page 37
    ... United States accounted for approximately 46% of our revenues in 2011. Information regarding financial data by geographic areas is set forth in Item 7 and Item 8 of this Annual Report on Form 10-K. See Note 16 of Notes to Consolidated Financial Statements under Item 8. Seasonality Our business is...

  • Page 38
    ... search engines and e-commerce sites, social networking sites, traditional media companies, and providers of online products and services. Our current and potential competitors range from large and established companies to emerging start-ups. Established companies have longer operating histories...

  • Page 39
    ...websites. Additionally, the margin we earn on revenues generated from our Google Network Members could decrease in the future if we pay an even larger percentage of advertising fees to our Google Network Members. We are subject to increased regulatory scrutiny that may negatively impact our business...

  • Page 40
    ... of controls, procedures, and policies at the acquired company. Integration of the acquired company's accounting, human resource, and other administrative systems, and coordination of product, engineering, and sales and marketing functions. Transition of operations, users, and customers onto our...

  • Page 41
    ... operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries. Failure to successfully further develop the acquired technology. Cultural challenges associated with integrating employees...

  • Page 42
    ... property rights. In addition, patent holding companies may continue to seek to monetize patents they have purchased or otherwise obtained. As we have grown, the intellectual property rights claims against us have increased and may continue to increase as we develop new products, services...

  • Page 43
    .... Any increase in the unauthorized use of our intellectual property could make it more expensive to do business and harm our operating results. We may be subject to legal liability associated with providing online services or content. We host and provide a wide variety of services and products that...

  • Page 44
    ... lose users and customers. Web spam and content farms could decrease our search quality, which could damage our reputation and deter our current and potential users from using our products and services. "Web spam" refers to websites that attempt to violate a search engine's quality guidelines or...

  • Page 45
    ... reduce our AdSense revenues, since some of these websites are AdSense partners. Interruption or failure of our information technology and communications systems could hurt our ability to effectively provide our products and services, which could damage our reputation and harm our operating results...

  • Page 46
    ...that may prevent us from offering products or providing services to a particular market and may increase our operating costs. Currency exchange rate fluctuations and our ability to manage these fluctuations through our foreign exchange risk management program. Longer payment cycles in some countries...

  • Page 47
    ... 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 market power in the broadband...

  • Page 48
    ... 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...

  • Page 49
    ... other employees). Short sales, hedging, and other derivative transactions on shares of our Class A common stock (including derivative transactions under our TSO program). In addition, the stock market in general, and the market for technology companies in particular, have experienced extreme price...

  • Page 50
    ... We also own a 2.9 million square feet office building in New York, New York and 556,000 square feet of office and building space in Paris and Dublin. We also operate and own data centers in the U.S., Europe, and Asia pursuant to various lease agreements and co-location arrangements. In addition, we...

  • Page 51
    ...the indicated periods the high and low sales prices per share for our Class A common stock on the Nasdaq Global Select Market. Fiscal Year 2011 Quarters Ended: High Low March 31, 2011 ...June 30, 2011 ...September 30, 2011 ...December 31, 2011 ...Fiscal Year 2010 Quarters Ended: $642.96 595.19 627...

  • Page 52
    ... 12 12 12 12 6/ 9/ Google Inc. S&P 500 NASDAQ Composite RDG Internet Composite *$100 invested on 12/31/06 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Copyright© 2012 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved. 23 12...

  • Page 53
    ... April 2007, eligible employees 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...

  • Page 54
    ... our consolidated financial statements and the related notes appearing in Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. The consolidated statements of income data for the years ended December 31, 2009, 2010, and 2011 and the consolidated balance sheet data...

  • Page 55
    ...display advertising management services to advertisers, ad agencies, and publishers. Google AdWords is our auction-based advertising program that enables advertisers to place text-based and display ads on our websites and our Google Network Members' websites. Display advertising comprises the videos...

  • Page 56
    ... customized "mini-sites" that run as ads on AdSense publisher websites). 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' websites or, for those advertisers who choose our cost-per-impression...

  • Page 57
    ...' websites compared to other forms of advertising. The total advertising spending budgets of each advertiser. The number of advertisers and the breadth of items advertised. The amount we ultimately pay our Google Network Members, distribution partners, and our content providers for traffic, access...

  • Page 58
    ...from traffic on our websites and our Google Network Members' websites. As we expand our advertising programs and other products to international markets, we continue to increase our exposure to fluctuations in foreign currency to U.S. dollar exchange rates. We have a foreign exchange risk management...

  • Page 59
    ... of the launch of our mobile phone business in the first quarter of 2010. The increase in advertising revenue for Google websites and Google Network Members' websites from 2009 to 2010 resulted primarily from an increase in the number of paid clicks through our advertising programs and, to a lesser...

  • Page 60
    ... advertisers, and Google Network Members and other partners. Revenues by Geography The following table presents our domestic and international revenues as a percentage of consolidated revenues, determined based on the billing addresses of our customers: Year Ended December 31, 2009 2010 2011 United...

  • Page 61
    ... costs consist of amounts ultimately paid to our Google Network Members under AdSense arrangements and to certain other partners (our distribution partners) who distribute our toolbar and other products (collectively referred to as access points) or otherwise direct search queries to our website...

  • Page 62
    ... of more traffic directed to our websites, as well as more distribution fees paid. The decrease in traffic acquisition costs as a percentage of advertising revenues was primarily due to more revenues realized from Google Network Members to whom we pay less revenue share, and expiration of an AdSense...

  • Page 63
    ... and the related revenues generated, including whether we share with certain existing and new distribution partners proportionately more of the aggregate advertising fees that we earn from paid clicks derived from search queries these partners direct to our websites. Research and Development The...

  • Page 64
    ... future periods, as we expand our business globally, increase advertising and promotional expenditures in connection with new and existing products, and increase the level of service we provide to our advertisers, Google Network Members, and other partners. General and Administrative The following...

  • Page 65
    ... our international business, we believe costs related to hedging activities under our foreign exchange risk management program may increase in dollar amount in 2012 and future periods. Provision for Income Taxes The following table presents our provision for income taxes, and effective tax rate for...

  • Page 66
    ... Accounting Policies and Estimates below 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 15 of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report...

  • Page 67
    ... Consolidated Statements of Income Data: Revenues ...Costs and expenses: Cost of revenues ...Research and development ...Sales and marketing ...General and administrative ...Charge related to the resolution of Department of Justice investigation ...Total costs and expenses ...Income from operations...

  • Page 68
    ...Cost of revenues ...Research and development ...Sales and marketing ...General and administrative ...Charge related to the resolution of Department of Justice investigation ...Total costs and expenses ...Income from operations ...Interest and other income (expense), net ...Income before income taxes...

  • Page 69
    ... related to these notes. In August 2011, we entered into a Merger Agreement with Motorola, a provider of innovative technologies, products and services that enable a range of mobile and wireline digital communication, information and entertainment experiences, under which we will acquire Motorola...

  • Page 70
    ... Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information about our securities lending program. Cash used in investing activities in 2010 of $10,680 million was primarily attributable to net purchases of marketable securities of $6,886...

  • Page 71
    ... increases in internet traffic, advertising transactions, and new products and services, and to support our overall global business expansion, we expect to make significant investments in our systems, data centers, corporate facilities, information technology infrastructure, and employees in 2012...

  • Page 72
    ... related to distribution arrangements, video and other content licensing revenue sharing arrangements, as well as data center operations and facility build-outs. In addition, we had $2.8 billion of open purchase orders for which we have not received the related services or goods at December 31, 2011...

  • Page 73
    ... to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information regarding contingencies. Stock-Based Compensation Our stock-based compensation expense for stock options is estimated at the grant date based on the award's fair value as calculated...

  • Page 74
    ... write down the asset to its fair value and take a corresponding charge to our Consolidated Statements of Income. Recent Accounting Pronouncements In June 2011, the Financial Accounting Standards Board (FASB) issued an amendment to an existing accounting standard which requires companies to present...

  • Page 75
    ...from foreign exchange contracts in place for the months of December 2010 and December 2011. These reasonably possible adverse changes in exchange rates of 20% were applied to total monetary assets and liabilities denominated in currencies other than the local currencies at the balance sheet dates to...

  • Page 76
    ... fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. Due in part to these factors, our income from investments may decrease in the future. However, we use certain interest rate derivative...

  • Page 77
    ... 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 Comprehensive Income ...Consolidated Statements of...

  • Page 78
    ... in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Google Inc.'s internal control...

  • Page 79
    ..., 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, 2010 and 2011, and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each...

  • Page 80
    ... equivalents, and marketable securities (including securities loaned of $4,031 and $2,778) ...Accounts receivable, net of allowance of $101 and $133 ...Receivable under reverse repurchase agreements ...Deferred income taxes, net ...Prepaid revenue share, expenses and other assets ...Total current...

  • Page 81
    Google Inc. CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) Year Ended December 31, 2009 2010 2011 Revenues ...Costs and expenses: Cost of revenues (including stock-based compensation expense of $47, $67, $249) ...Research and development (including stock-based ...

  • Page 82
    Google Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31, 2009 2010 2011 Net income ...Other comprehensive income (loss): Change in foreign currency translation adjustment ...Available-for-sale investments: Change in net unrealized gains ...Less: ...

  • Page 83
    ... Comprehensive Shares Amount Income Total Stockholders' Equity Retained Earnings Balance at January 1, 2009 ...Common stock issued ...Stock-based compensation expense ...Stock-based compensation tax benefits ...Tax withholding related to vesting of restricted stock units ...Net income ...Other...

  • Page 84
    Google Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31, 2009 2010 2011 Operating activities Net income ...Adjustments: Depreciation and amortization of property and equipment ...Amortization of intangible and other assets ...Stock-based compensation expense ...Excess...

  • Page 85
    ... 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 websites and our Google Network Members' websites as specified by the advertisers. Google AdSense refers to the online programs...

  • Page 86
    ... other assets on the accompanying Consolidated Balance Sheets. Cost of revenues also includes the expenses associated with the operation of our data centers, including depreciation, labor, energy, and bandwidth costs, credit card and other transaction fees related to processing customer transactions...

  • Page 87
    ... related to our securities lending program. Foreign exchange contracts are transacted with various financial institutions with high credit standing. Accounts receivable are typically unsecured and are derived from revenues earned from customers located around the world. In 2009, 2010, and 2011...

  • Page 88
    ... 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 carry these securities at fair value, and report the unrealized...

  • Page 89
    ...in tax rates in income in the period that includes the enactment date. Foreign Currency Generally, the functional currency of our international subsidiaries is the local currency. We translate the financial statements of these subsidiaries to U.S. dollars using month-end rates of exchange for assets...

  • Page 90
    ... We adopted this standard in the first quarter of 2012 and the adoption will not have a material impact on our financial statements. In May 2011, the FASB issued a new accounting standard update, which amends the fair value measurement guidance and includes some enhanced disclosure requirements. The...

  • Page 91
    ... outstanding ...Unvested common shares subject to repurchase or cancellation ...Employee stock options, including warrants issued under Transferable Stock Option program ...Restricted shares and RSUs ...Number of shares used in per share computation ...Diluted net income per share ...$ 30.17 $ 30...

  • Page 92
    ...program. The following tables summarize unrealized gains and losses related to our investments in marketable securities designated as available-for-sale (in millions): As of December 31, 2010 Gross Gross Unrealized Unrealized Gains Losses Adjusted Cost Fair Value Time deposits ...U.S. government...

  • Page 93
    ..., in our accompanying Consolidated Statements of Income. The following table summarizes the estimated fair value of our investments in marketable securities, excluding the marketable equity securities, designated as available-for-sale and classified by the contractual maturity date of the securities...

  • Page 94
    ...rate of 1.0% and a one-year maturity date. Proceeds were used for the acquisition of an office building in New York City. In December 2011, we extended the maturity date of the note to December 2012. As of December 31, 2010 and 2011, the outstanding balance was $468 million. The estimated fair value...

  • Page 95
    ...We use certain interest rate derivative contracts to hedge interest rate exposures on our fixed income securities. Our program is not designated for trading or speculative purposes. We recognize derivative instruments as either assets or liabilities on the accompanying Consolidated Balance Sheets at...

  • Page 96
    ... exchange contracts to sell Euros for other foreign currencies was â,¬6 million (or approximately $8 million) at December 31, 2010 and no such contracts were outstanding at December 31, 2011. We also use exchange-traded interest rate futures contracts and "To Be Announced" (TBA) forward purchase...

  • Page 97
    ...As of December 31, As of December 31, 2010 2011 Balance Sheet Location Derivative Assets Derivatives designated as hedging instruments: Foreign exchange contracts ...Prepaid revenue share, expenses and other assets, current and non-current Derivatives not designated as hedging instruments: Foreign...

  • Page 98
    ... exchange contracts ...Interest rate contracts ... Interest and other income, net Interest and other income, net $(78) 0 $(78) $(40) 0 $(40) $ 29 (19) $ 10 Note 6. Fair Value Measurements We measure our cash equivalents, marketable securities, auction rate securities (ARS), and foreign currency...

  • Page 99
    ... 31, 2011 Fair Value Measurement at Reporting Date Using Quoted Prices Significant Other Significant in Active Markets Observable Unobservable for Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Assets Cash equivalents: Time deposits ...Money market and other funds ...U.S. government...

  • Page 100
    ... record a charge to earnings. In addition, we have concluded that the auctions for these securities may continue to fail for at least the next 12 months and as a result, we classified them as non-current assets on the accompanying Consolidated Balance Sheet at December 31, 2011. The following table...

  • Page 101
    .... In August 2011, we entered into a Merger Agreement with Motorola, a provider of innovative technologies, products and services that enable a range of mobile and wireline digital communication, information and entertainment experiences, under which we will acquire Motorola for $40 per share in cash...

  • Page 102
    Patents and developed technology, customer relationships, and trade names and other have weightedaverage useful lives from the date of purchase of 5.0 years, 6.1 years, and 4.3 years. Amortization expense of acquisition-related intangible assets for the years ended December 31, 2009, 2010, and 2011 ...

  • Page 103
    ...video and other content licensing revenue sharing arrangements, as well as data center operations and facility build-outs at December 31, 2011. In addition, we had $2.8 billion of open purchase orders for which we had not received the related services or goods at December 31, 2011. We have the right...

  • Page 104
    ..., Google AdSense, Google Books, Google News, Google Image Search, Google Chrome, Google Talk, Google Voice, and YouTube, infringe the intellectual property rights of others. Adverse results in these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements...

  • Page 105
    property, privacy, tax, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, and other matters. Such claims, suits, government investigations, and other proceedings could result in fines, civil or ...

  • Page 106
    ...2010 and December 31, 2011, there were 27,329,837 and 21,794,492 shares of common stock reserved for future issuance under our Stock Plans. We estimated the fair value of each option award on the date of grant using the BSM option pricing model. Our assumptions about stock-price volatility have been...

  • Page 107
    ... options purchased from employees under our TSO program, with a weighted-average exercise price of $336.64 and a weighted-average remaining life of 1.1 years. During 2011, the number of shares underlying TSOs sold to selected financial institutions under the TSO program was 635,047 at a total value...

  • Page 108
    ... of unrecognized compensation cost related to unvested employee RSUs. This amount is expected to be recognized over a weighted-average period of 2.9 years. To the extent the actual forfeiture rate is different from what we have estimated, stock-based compensation related to these awards will be...

  • Page 109
    ... deferred tax liability related to these earnings is not practicable. Deferred Tax Assets Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes...

  • Page 110
    ... will begin to expire in 2014. The net operating loss carryforwards are subject to various annual limitations under Section 382 of the Internal Revenue Code. As of December 31, 2011, our California research and development credit carryforwards for income tax purposes were approximately $55 million...

  • Page 111
    ...reporting segment and operating unit structure. Revenues by geography are based on the billing addresses of our customers. The following tables set forth revenues and long-lived assets by geographic area (in millions): Year Ended December 31, 2009 2010 2011 Revenues: United States ...United Kingdom...

  • Page 112
    ... internal control over financial reporting as of December 31, 2011 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. Limitations on Effectiveness of Controls and Procedures...

  • Page 113
    ... and Related Transactions" and "Directors, Executive Officers and Corporate Governance-Corporate Governance and Board Matters-Director Independence" in the 2012 Proxy Statement and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required...

  • Page 114
    ...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 Comprehensive Income ...Consolidated Statements of...

  • Page 115
    ...to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. Date: January 26, 2012 GOOGLE INC. By: /S/ LARRY PAGE Larry Page Chief Executive...

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    .... and J.P. Morgan Securities Inc. entered into as of July 20, 2007 Amendment Agreement, dated as of July 12, 2011, among Google Inc., Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Credit Suisse Management LLC, Credit Suisse Securities (USA) LLC, UBS AG, London Branch, and UBS Securities...

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    ..., 2011 between Google Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee Form of 1.250% Note due 2014 Form of 2.125% Note due 2016 Form of 3.625% Note due 2021 ♥ Deferred Compensation Plan Current Report on Form 8-K (File No. 000-50726) April 23, 2007 4.02.1 Quarterly Report...

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    ... 2000 Equity Incentive Plan, as amended Picasa, Inc. Employee Bonus Plan YouTube, Inc. 2005 Stock Plan Computation of Earnings to Fixed Charge Ratios Subsidiaries of the Registrant Quarterly Report on Form 10-Q (File No. 000-50726) Registration Statement on Form S-1, as amended (File No. 333-114984...

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    ... by reference herein Form Date 23.01 24.01 * * Consent of Independent Registered Public Accounting Firm Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K) Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14...

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    ... to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 26, 2012 /S/ LARRY PAGE Larry Page Chief...

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    ...record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 26, 2012 /S/ PATRICK PICHETTE Patrick Pichette...

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    ... 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Google Inc. Date: January 26, 2012 By: Name: Title: /S/ LARRY PAGE Larry Page Chief...

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    ..., Corporate Development and Chief Legal Officer Patrick Pichette Senior Vice President and Chief Financial Officer STOCKHOLDER INFORMATION For further information about Google, contact: Investor Relations Google Inc. 1600 Amphitheatre Parkway Mountain View, California 94043 [email protected] You...

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