Google 2013 Annual Report Download - page 30

24 GOOGLE INC.
PART II
ITEM7.Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations
 Management’s Discussion and Analysis of Financial
Condition and Results ofOperations
Thefollowingdiscussionandanalysisofournancialconditionandresultsofoperationsshouldbereadtogetherwithour
consolidatednancialstatementsandrelatednotesincludedunderItem8ofthisAnnualReportonForm10-K.
Overview
Googleisaglobaltechnologyleaderfocusedonimprovingthewayspeopleconnectwithinformation.Weaspiretobuildproducts
andprovideservicesthatimprovethelivesofbillionsofpeopleglobally.Ourmissionistoorganizetheworld’sinformationand
makeituniversallyaccessibleanduseful.Ourinnovationsinwebsearchandadvertisinghavemadeourwebsiteatopinternet
propertyandourbrandoneofthemostrecognizedintheworld.OurGooglesegmentgeneratesrevenuesprimarilybydelivering
relevant,cost-eectiveonlineadvertising.BusinessesuseourAdWordsprogramandAdSenseprogramtopromotetheirproducts
andserviceswithadvertisingonbothGoogle-ownedpropertiesandpublishers’sitesacrosstheweb.
Our Motorola Mobile segment is focused on mobile wireless devices and related products and services and generates revenues
primarilybysellinghardwareproducts.InJanuary2014,weenteredintoanagreementwithLenovoprovidingforthedisposition
oftheMotorolaMobilesegment.Thetransactionisexpectedtoclosein2014.
TheMotorolaHomesegmentwas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December2012,weenteredintoanagreement
forthedispositionoftheMotorolaHomesegment.ThetransactionclosedonApril17,2013.AllnancialresultsrelatedtoMotorola
Homewerepresentedasnetincome(loss)fromdiscontinuedoperationsontheConsolidatedStatementsofIncome.
Trends in Our Businesses
Advertisingtransactionscontinuetoshiftfromoinetoonlineasthedigitaleconomyevolves.Thishascontributedtothe
rapid growth of our business since inception, resulting in substantially increased revenues, and we expect that our business
willcontinuetogrow.However,ourrevenuegrowthratehasgenerallydeclinedovertime,anditcoulddosointhefutureasa
result of a number of factors, including increasing competition, our investments in new business strategies, products, services,
and technologies, changes in our product mix, shifts in the geographic mix of our revenues, query growth rates and how users
make queries, challenges in maintaining our growth rate as our revenues increase to higher levels, and the evolution of the online
advertisingmarket,includingtheincreasingvarietyofonlineplatformsforadvertising,andothermarketsinwhichweparticipate.
Our users are increasingly connected to the internet and using multiple devices to access our products and services, a trend that
hasincreasedourglobalsearchqueriesandchangedourplatformmix.Weexpectthatourrevenuegrowthratewillcontinue
tobeaectedbyevolvingconsumerpreferences,aswellasbyadvertisingtrends,theacceptancebyusersofourproductsand
services as they are delivered on diverse devices, and our ability to create a seamless experience for both users and advertisers
inthismulti-screenenvironment.
The main focus of our advertising programs is to help businesses reach people in the moments that matter across all devices
withsmarteradsthatarerelevanttotheirintentandcontext,reectingourcommitmenttoconstantlyimprovetheiroverallweb
experience.Asaresult,weexpecttocontinuetotakestepstoimprovetherelevanceoftheadsdisplayedonourwebsitesand
ourGoogleNetworkMembers’websites.Thesestepsincludenotdisplayingadsthatgeneratelowclick-throughratesorthat
senduserstoirrelevantorotherwiselow-qualitywebsites,updatingouradvertisingpoliciesandensuringtheircompliance,and
terminatingourrelationshipswiththoseGoogleNetworkMemberswhosewebsitesdonotmeetourqualityrequirements.We
mayalsocontinuetotakestepstoreducethenumberofaccidentalclicksbyourusers.Thesestepscouldnegativelyaectthe
growthrateofourrevenues.
Bothseasonaluctuationsininternetusageandtraditionalretailseasonalityhaveaected,andarelikelytocontinuetoaect,
ourbusiness.Internetusagegenerallyslowsduringthesummermonths,andcommercialqueriestypicallyincreasesignicantlyin
thefourthquarterofeachyear.Theseseasonaltrendshavecaused,andwilllikelycontinuetocause,uctuationsinourquarterly
results,includinguctuationsinsequentialrevenues,aswellasaggregatepaidclicksandaveragecost-per-clickgrowthrates.
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