Google 2013 Annual Report Download - page 16

10 GOOGLE INC.
PART I
ITEM1A.RiskFactors
We are regularly subject to claims, suits, government investigations, and other proceedings that may result in
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We are regularly subject to claims, suits, government investigations, and other proceedings involving competition and antitrust
(such as the pending investigations by the EC), intellectual property, privacy, consumer protection, tax, labor and employment,
commercialdisputes,contentgeneratedbyourusers,goodsandservicesoeredbyadvertisersorpublishersusingourplatforms,
and other matters. The sale of hardware products also exposes us to the risk of product liability and other litigation involving
assertions about product defects, as well as health and safety, hazardous materials usage, and other environmental concerns.
In addition, our businesses face intellectual property litigation, as further discussed later, that exposes us to the risk of exclusion
and cease and desist orders, which could limit our ability to sell products and services.
Such claims, suits, government investigations, and proceedings are inherently uncertain and their results cannot be predicted with
certainty. Regardless of the outcome, such legal proceedings can have an adverse impact on us because of legal costs, diversion
ofmanagementresources,andotherfactors.Determiningreservesforourpendinglitigationisacomplex,fact-intensiveprocess
thatrequiressignicantjudgment.Itispossiblethataresolutionofoneormoresuchproceedingscouldresultinsubstantial
nesandpenaltiesthatcouldadverselyaectourbusiness,consolidatednancialposition,resultsofoperations,orcashows
in a particular period. These proceedings could also result in reputational harm, criminal sanctions, consent decrees, or orders
preventingusfromoeringcertainfeatures,functionalities,products,orservices,requiringachangeinourbusinesspracticesor
productrecallsorothereldaction,orrequiringdevelopmentofnon-infringingorotherwisealteredproductsortechnologies.
Anyoftheseconsequencescouldadverselyaectourbusinessandresultsofoperations.
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adversely impact our business and results of operations.
Acquisitions are an important element of our overall corporate strategy and use of capital, and these transactions could be material
toournancialconditionandresultsofoperations.Weexpecttocontinuetoevaluateandenterintodiscussionsregardingawide
array of potential strategic transactions. The process of integrating an acquired company, business, or technology has created,
andwillcontinuetocreate,unforeseenoperatingdicultiesandexpenditures.Theareaswherewefacerisksinclude:
Diversionofmanagementtimeandfocusfromoperatingourbusinesstoacquisitionintegrationchallenges.
Failure to successfully further develop the acquired business or technology.
Implementation or remediation of controls, procedures, and policies at the acquired company.
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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 existing platforms.
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Failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions placed upon
approval, under competition and antitrust laws which could, among other things, delay or prevent us from completing a
transaction,orotherwiserestrictourabilitytorealizetheexpectednancialorstrategicgoalsofanacquisition.
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Inthecaseofforeignacquisitions,theneedtointegrateoperationsacrossdierentculturesandlanguagesandtoaddress
theparticulareconomic,currency,political,andregulatoryrisksassociatedwithspeciccountries.
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Cultural challenges associated with integrating employees from the acquired company into our organization, and retention
of employees from the businesses we acquire.
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Liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims,
violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities.
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Litigation or other claims in connection with the acquired company, including claims from terminated employees, customers,
former stockholders, or other third parties.
Our failure to address these risks or other problems encountered in connection with our past or future acquisitions and investments
couldcauseustofailtorealizetheanticipatedbenetsofsuchacquisitionsorinvestments,incurunanticipatedliabilities,andharm
our business generally.
Our acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or
amortization expenses, or impairment of goodwill and purchased long-lived assets, and restructuring charges, any of which could
harmournancialconditionorresults.Also,theanticipatedbenetofmanyofouracquisitionsmaynotmaterialize.
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