Google 2012 Annual Report Download - page 9

3GOOGLE INC. | Form10-K
PART I
ITEM1.Business
On December19, 2012, Google and Arris announced that Motorola Mobility had entered into an agreement (Motorola Agreement)
with Arris and certain other persons providing for the disposition of the Home business for total consideration of approximately
$2.35billion in cash and common stock, subject to certain adjustments. Arris announced in January2013 that it has agreed to
sell approximately 10.6million shares of its common stock, valued at $150.0million, to Comcast Corporation with the closing of
the Comcast investment and the Home business disposition expected to occur simultaneously. As provided for in the Motorola
Agreement, the Comcast transaction will reduce the amount of stock consideration and increase the amount of cash consideration
to be received by Google, but will not aff ect the total consideration. Specifi cally, the shares issued to Comcast will reduce, on a
share-for-share basis, the number of shares of Arris common stock to be issued to Google and simultaneously increase the cash
consideration to be received by Google by $150.0million. Assuming the completion of the Comcast transaction, Comcast and
Google will each own approximately 7.85% of the outstanding Arris common stock post-closing based on Arris’ capitalization as
of the date of Arris’ announcement of the Comcast transaction. The disposition of the Home business to Arris is not contingent
upon Arris’ sale of common stock to Comcast. In the event that Arris’ sale of common stock to Comcast does not close for any
reason, there will be no reduction in the amount of shares of Arris common stock to be issued to Google and no corresponding
increase in the amount of cash consideration. In that case, Google will own approximately 15.7% of the outstanding Arris common
stock post-closing based on Arris’ capitalization as of the date of the Arris’ announced transaction with Google. The disposition
of the Home business is expected to close in 2013.
In January2013, the FTC closed its investigations into our business practices, including search and advertising. In connection with
the closing of the investigation, we have voluntarily agreed to make certain product changes. In addition, we and Motorola have
entered into a consent order with the FTC setting forth certain guidelines on our use of standards-essential patents in litigation.
Search
Our search technologies sort through an ever-growing amount of information to deliver relevant and useful search results in
response to user queries. We integrate innovative features into our search service and off er specialized search services to help
users tailor their search. In addition, we are constantly improving and adding to our products and services, to provide users
with more relevant results so that users fi nd what they are looking for faster. For instance, when users want to plan a trip, Flight
Search is a feature that makes it easy for users to fi nd fl ights that meet their needs. Whether they have a specifi c destination with
dates in mind or not, Flight Search can help users quickly fi nd the best options for their trips. We also off er Product Listing Ads,
which include richer product information, such as product image, price, and merchant information, without requiring additional
keywords or ad text.
In January2012, we launched Search plus Your World. Now, when a user performs a signed-in search on Google, the user’s results
page may include Google+ content from people that the user is close to (or might be interested in following). Relevant Google+
profi les and Google+ pages related to a specifi c topic or area of interest may also appear on a user’s results page.
In 2012, we also introduced Google Now and Google’s Knowledge Graph. Google Now is a predictive search feature that gets
you just the right information at just the right time. It tells you the day’s weather before you start your day, how much tra c to
expect before you leave for work or school, when the next train will arrive as you’re standing on the platform, or your favorite
team’s score while they’re playing—all automatically with cards appearing throughout the day at the moment you need them.
Google’s Knowledge Graph, introduced in 2012, enables the user to search for things, people or places that Google knows about
– landmarks, celebrities, cities, sports teams, buildings, geographical features, movies, works of arts and more – and enhances
Google Search in three main ways:
•
Find the Right Thing—By understanding the ambiguities and nuances in language the way users do, the Knowledge Graph
makes Google Search more intelligent and relevant.
•
Get the Best Summary—With the Knowledge Graph, we can better understand a user’s query, so that we can summarize
relevant content around that topic, including key facts users likely need for that particular query.
•
Go Deeper and Broader—The Knowledge Graph can help you make some unexpected discoveries. We’ve always believed
that the perfect search engine should understand exactly what you mean and give you back exactly what you want. And we
can sometimes help answer your next question before you’ve asked it, because the facts we show are informed by what
other people have searched for.
Advertising
Google Search
The goal of AdWords, our primary auction-based advertising program, is to deliver ads that are so useful and relevant to search
queries or web content that they are a form of information in their own right. With AdWords, advertisers create simple text-based
ads that then appear beside related search results or web content on our websites and on thousands of partner websites in our
Google Network, which is the network of third parties that use our advertising programs to deliver relevant ads with their search
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