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6 GOOGLE INC. | Form10-K
PART I
ITEM1.Business
Motorola
Our Motorola Mobility business is comprised of two operating segments. The Mobile segment is focused on mobile wireless devices
and related products and services. The Home segment is focused on technologies and devices that provide video entertainment
services to consumers by enabling subscribers to access a variety of interactive digital television services. In December2012, we
entered into an agreement with Arris Group, Inc. and certain other persons providing for the disposition of our Home segment.
The transaction is expected to close in 2013.
Research
We continue to develop new products and services and to enhance our existing ones through research and product development
and the licensing and acquisition of third-party businesses and technology. Our product development philosophy is to launch
innovative products early and often, and then iterate rapidly to make those products even better. We often post early stage
products at test locations online or directly on Google.com. We then use data and user feedback to decide if and how to invest
further in those products.
Our research and development expenses were $3.8billion, $5.2billion, and $6.8billion in 2010, 2011, and 2012, respectively,
which included stock-based compensation expense of $861million, $1.1billion, and $1.3billion, respectively. We expect to
continue to invest in building the employee and systems infrastructures needed to support the development of new products
and services and to improve existing ones.
Intellectual Property
We rely on a combination of intellectual property laws, as well as confi dentiality procedures and contractual provisions, to
protect our proprietary technology and our brand. We have registered, and applied for the registration of, U.S. and international
trademarks, service marks, domain names, and copyrights. Additionally, we have fi led U.S. and international patent applications
covering certain of our proprietary technology. Over time, we have assembled a portfolio of patents, trademarks, service marks,
copyrights, domain names, and trade secrets covering our products and services. Our proprietary technology is not dependent
on any single patent or copyright or groups of related patents or copyrights. We believe the duration of our patents is adequate
relative to the expected lives of our products. Although we rigorously protect our proprietary technology, any signifi cant impairment
of, or third-party claim against, our intellectual property rights could harm our business or our ability to compete.
Sales and Support
We continue to develop and grow our sales and support infrastructure. We have over 85 o ces in over 40 countries, the
large majority of which include sales people.Our global sales and support infrastructure has specialized teams across vertical
markets.We bring businesses into our advertising network through direct, remote, and online sales channels, using technology
and automation wherever possible to improve our customers’ experience and to grow our business cost-eff ectively. Our direct
advertising and sales teams focus on building relationships with the largest advertisers and leading internet companies. We have
built a multi-product sales force, with teams selling campaigns that include search, display (including DoubleClick and YouTube),
and mobile advertising.
We provide customer service to our advertiser base through our global support organization. Our global support organization
concentrates on helping our advertisers and Google Network Members get the most out of their relationship with us.
No individual customer or groups of a liated customers represented more than 10% of our revenues in 2010, 2011, or 2012.
Government Contracts
No material portion of our business is subject to renegotiation of profi ts or termination of contracts or subcontracts at the election
of the U.S. government.
Contents
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