The Football Association Premier League Limited et al v. Youtube, Inc. et al

Filing 166

DECLARATION of Elizabeth Anne Figueira in supoport of Class Plaintiffs' Statement of Uncontroverted Material Facts in support of Their Motion For Partial Summary Judgment in Support re: 158 MOTION for Partial Summary Judgment dismissing with prejudice Defendants' First Defense asserted in Defendants' Answer to the Second Amended Class Action Complaint... Document filed by The Music Force LLC, Cal IV Entertainment, LLC, Cherry Lane Music Publishing Company, Inc., The Football Association Premier League Limited, Robert Tur, National Music Publishers' Association, The Rodgers & Hammerstein Organization, Edward B. Marks Music Company, Freddy Bienstock Music Company, Alley Music Corporation, X-Ray Dog Music, Inc., Federation Francaise De Tennis, The Scottish Premier League Limited, The Music Force Media Group LLC, Sin-Drome Records, Ltd., Murbo Music Publishing, Inc., Bourne Co.. (Attachments: # 1 Exhibit Exhibit 1, # 2 Exhibit Exhibit 2, # 3 Exhibit Exhibit, # 4 Exhibit Exhibit 4, # 5 Exhibit Exhibit 5, # 6 Exhibit Exhibit 6, # 7 Exhibit Exhibit 7, # 8 Exhibit Exhibit 8, # 9 Exhibit Exhibit 9, # 10 Exhibit Exhibit 10, # 11 Exhibit Exhibit 11, # 12 Exhibit Exhibit 12, # 13 Exhibit Exhibit 13, # 14 Exhibit Exhibit 14, # 15 Exhibit Exhibit 15, # 16 Exhibit Exhibit 16, # 17 Exhibit Exhibit 17, # 18 Exhibit Exhibit 18, # 19 Exhibit Exhibit 19, # 20 Exhibit Exhibit 20, # 21 Exhibit Exhibit 21, # 22 Exhibit Exhibit 22, # 23 Exhibit Exhibit 23, # 24 Exhibit Exhibit 24, # 25 Exhibit Exhibit 25, # 26 Exhibit Exhibit 26, # 27 Exhibit Exhibit 27, # 28 Exhibit Exhibit 28, # 29 Exhibit Exhibit 29, # 30 Exhibit Exhibit 30, # 31 Exhibit Exhibit 31, # 32 Exhibit Exhibit 32, # 33 Exhibit Exhibit 33, # 34 Exhibit Exhibit 34, # 35 Exhibit Exhibit 35, # 36 Exhibit Exhibit 36, # 37 Exhibit Exhibit 37, # 38 Exhibit Exhibit 38, # 39 Exhibit Exhibit 39, # 40 Exhibit Exhibit 40, # 41 Exhibit Exhibit 41, # 42 Exhibit Exhibit 42, # 43 Exhibit Exhibit 43, # 44 Exhibit Exhibit 44, # 45 Exhibit Exhibit 45, # 46 Exhibit Exhibit 46, # 47 Exhibit Exhibit 47, # 48 Exhibit Exhibit 48, # 49 Exhibit Exhibit 49, # 50 Exhibit Exhibit 50, # 51 Exhibit Exhibit 51, # 52 Exhibit Exhibit 52, # 53 Exhibit Exhibit 53, # 54 Exhibit Exhibit 54, # 55 Exhibit Exhibit 55, # 56 Exhibit Exhibit 56, # 57 Exhibit Exhibit 57, # 58 Exhibit Exhibit 58, # 59 Exhibit Exhibit 59, # 60 Exhibit Exhibit 60, # 61 Exhibit Exhibit 61, # 62 Exhibit Exhibit 62, # 63 Exhibit Exhibit 63, # 64 Exhibit Exhibit 64, # 65 Exhibit Exhibit 65, # 66 Exhibit Exhibit 66, # 67 Exhibit Exhibit 67, # 68 Exhibit Exhibit 68, # 69 Exhibit Exhibit 69, # 70 Exhibit Exhibit 70, # 71 Exhibit Exhibit 71, # 72 Exhibit Exhibit 72, # 73 Exhibit Exhibit 73, # 74 Exhibit Exhibit 74, # 75 Exhibit Exhibit 75, # 76 Exhibit Exhibit 76, # 77 Exhibit Exhibit 77, # 78 Exhibit Exhibit 78, # 79 Exhibit Exhibit 79, # 80 Exhibit Exhibit 80, # 81 Exhibit Exhibit 81, # 82 Exhibit Exhibit 82, # 83 Exhibit Exhibit 83, # 84 Exhibit Exhibit 84, # 85 Exhibit Exhibit 85, # 86 Exhibit Exhibit 86, # 87 Exhibit Exhibit 87, # 88 Exhibit Exhibit 88, # 89 Exhibit Exhibit 89, # 90 Exhibit Exhibit 90, # 91 Exhibit Exhibit 91, # 92 Exhibit Exhibit 92, # 93 Exhibit Exhibit 93, # 94 Exhibit Exhibit 94, # 95 Exhibit Exhibit 95, # 96 Exhibit Exhibit 96, # 97 Exhibit Exhibit 97, # 98 Exhibit Exhibit 97 part 2, # 99 Exhibit Exhibit 98, # 100 Exhibit Exhibit 99, # 101 Exhibit Exhibit 100, # 102 Exhibit Exhibit 101, # 103 Exhibit Exhibit 102, # 104 Exhibit Exhibit 103, # 105 Exhibit Exhibit 104, # 106 Exhibit Exhibit 105, # 107 Exhibit Exhibit 106, # 108 Exhibit Exhibit 107, # 109 Exhibit Exhibit 108, # 110 Exhibit Exhibit 109, # 111 Exhibit Exhibit 110, # 112 Exhibit Exhibit 111, # 113 Exhibit Exhibit 112, # 114 Exhibit Exhibit 113, # 115 Exhibit Exhibit 114, # 116 Exhibit Exhibit 115, # 117 Exhibit Exhibit 116, # 118 Exhibit Exhibit 117, # 119 Exhibit Exhibit 118, # 120 Exhibit Exhibit 119, # 121 Exhibit Exhibit 120, # 122 Exhibit Exhibit 121, # 123 Exhibit Exhibit 122, # 124 Exhibit Exhibit 123, # 125 Exhibit Exhibit 124, # 126 Exhibit Exhibit 125, # 127 Exhibit Exhibit 126, # 128 Exhibit Exhibit 127, # 129 Exhibit Exhibit 128, # 130 Exhibit Exhibit 129, # 131 Exhibit Exhibit 130, # 132 Exhibit Exhibit 131, # 133 Exhibit Exhibit 132, # 134 Exhibit Exhibit 133, # 135 Exhibit Exhibit 134, # 136 Exhibit Exhibit 135, # 137 Exhibit Exhibit 136, # 138 Exhibit Exhibit 137, # 139 Exhibit Exhibit 138, # 140 Exhibit Exhibit 139, # 141 Exhibit Exhibit 140, # 142 Exhibit Exhibit 141, # 143 Exhibit Exhibit 142, # 144 Exhibit Exhibit 143, # 145 Exhibit Exhibit 144, # 146 Exhibit Exhibit 145, # 147 Exhibit Exhibit 146, # 148 Exhibit Exhibit 147, # 149 Exhibit Exhibit 148, # 150 Exhibit Exhibit 149, # 151 Exhibit Exhibit 150, # 152 Exhibit Exhibit 151, # 153 Exhibit Exhibit 152, # 154 Exhibit Exhibit 153, # 155 Exhibit Exhibit 154, # 156 Exhibit Exhibit 154 Part 2, # 157 Exhibit Exhibit 154 Part 3, # 158 Exhibit Exhibit 154 Part 4, # 159 Exhibit Exhibit 155, # 160 Exhibit Exhibit156, # 161 Exhibit Exhibit 157, # 162 Exhibit Exhibit 158, # 163 Exhibit Exhibit 159, # 164 Exhibit Exhibit 160, # 165 Exhibit Exhibit 161, # 166 Exhibit Exhibit 162, # 167 Exhibit Exhibit 163, # 168 Exhibit Exhibit 164, # 169 Exhibit Exhibit 165, # 170 Exhibit Exhibit 166, # 171 Exhibit Exhibit 167, # 172 Exhibit Exhibit 168, # 173 Exhibit Exhibit 169, # 174 Exhibit Exhibit 170, # 175 Exhibit Exhibit 171, # 176 Exhibit Exhibit 172, # 177 Exhibit Exhibit 173, # 178 Exhibit Exhibit 174, # 179 Exhibit Exhibit 175, # 180 Exhibit Exhibit 176, # 181 Exhibit Exhibit 177, # 182 Exhibit Exhibit 178, # 183 Exhibit Exhibit 179, # 184 Exhibit Exhibit 180, # 185 Exhibit Exhibit 181, # 186 Exhibit Exhibit 182, # 187 Exhibit Exhibits 183 - 187, # 188 Exhibit Exhibit 188)(Figueira, Elizabeth)

Q1

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TRANSCRIPT LENGTII 11EADLINE
8329

041 609a21

63095.795

words

Q1

2009

Google

QA

Session

Final

BODY
Corporate
Participants

Krista Bessinger Product

Google

Director

JR

Patrick

Pichette

Google

CFO

Jonathan

Rosenberg

Google

SVP

Management
Call Participants

Conference

Heath Terry
Analyst
Stifel

FBR
Fetyko

Analyst

Jim Friedland

Cowen
Analyst

Richard

Merriman

Company

Steve Weinstein Pacific Crest Analyst Company Doug Anmuth Barclays Capital Analyst George Askew Sumit

Nicolaus Sachs
Justin

Analyst Analyst Post Merrill Ross

Mark Mahaney
Youssef Squali

Citigroup
Jefferies Jeffrey

Analyst

Suna JItv

Securities

Analyst

James
Weisel

v1itchell

Goldman
Analyst

Company
Lindsay Analyst Gabelli

Analyst Sanford Sandeep Co.

Christa

Quarles Analyst Collins

Thomas
Jeetil

Partners

Lynch

Analyst Capital

Bernstein

Patel

Deutsche Brian

Bank Bolan

Analyst
Start

Sandler

RBC

Markets Haley

Aggarwal
Analyst

Stewart

Analyst

Event

Company

Analyst

Robert

Presentation

OPERATOR
At
this

Good

day

and

welcome
call

everyone
to

to

the

Google

Inc.

conference Director

call.

Todays

call

is

being

recorded.

time

would

like to

turn the

over

Ms.

Krista Bessinger

of Investor

Relations.

Please

go ahead

maam. KRISTA
Googles
and and
first

BESSENGER
quarter 2008

DIRECTOR
earnings

IR

GOOGLE
conference of Product
questions.

Great.
call.

Thank With

you.

Good

afternoon Pichette cover

everyone Chief few
to

and welcome
Officer

to

follow-up President
to

us are

Patrick
will

Financial

Jonathan then well

Rosenberg open
the

Senior Vice
call

Management.
If

quickly
limit

housekeeping question and

items one

immediately

your

you could

please

yourself

one

follow-on.

Also Please replay

please
to

note

that

this for

call

is

being

webcast

from

our Investor

Relations

website

located and

at

investor.Google.com.
slide

refer

our website be

important

information
in

including few
at hours.

our earnings Please note

press release
that

related

deck

and

of this call will

available

on our website
website of this

we

routinely

post important

information
resource. financial statement.

on our Investor
as

Relations
the

located

investor.Google.com.
call
is

We Now

encourage
the Ill

you

to to

make

use of that

So and

reminder

purpose
in

follow-up and

to

give

participants

opportunity quickly

ask more detailed
the

product

questions

an

efficient

Reg

FD

compliant

manner.

cover

Safe

Harbor

Q1

2009 Google

QA

Page
Session Final

FD

Fair

Disclosure

Wire

April 16

2009

Thursday

14

1-0002 involve

Some
of risks and

of the

statements

we make
could only

today cause
as

maybe
actual date

considered
to differ

forward-looking
materially.

and

these

statements these

number

uncertainties reflect

that

results

Please

note

that

forward-looking
to revise or or future

statements publicly
events. as

our opinions
the results to

of the
to

of this presentation forward-looking
report

and

we

undertake
in light

no obligation
of

release

of any

revision

these

statements

new

information

Please
as

refer

our

SEC SEC

filings

including

our aimual
detailed

on Form
of the

10-K

for the

year ended

December

31 2008
Copies

well be

our earnings from

press

release or

for

more
the as

description

risk

factors

that

may

affect

our results.
that certain are

can

obtained

the

by

visiting

Investor

Relations

section of our website.

Please

note

financial

measures

we

use on this call such and have

EPS
to

net income charges

operating
relating capital

margin
to

and based

operating

income

expressed
also

on

non-GAAP
Our were

basis

been

adjusted

exclude
to

stock

compensation.

Weve
to as free

adjusted
flow.

our net cash

provided and your

by operating

activities

remove

expenditures found
in

which

we

refer

cash

GAAP
ready

results to take

GAAP
questions.

to

non-GAAP
Operator.

reconciliation

can

be

our earnings

press release.

So with

that

Questions

and

Answers Thank Operator Instructions FBR.
Great.

OPERATOR
question from

you.

Well

pause

for just

moment

to

assemble

the

roster.

Our

first

Heath Teny

from

HEATH
we
obviously
areas

TERRY
saw
that there

ANALYST FBR
big declines
as in

pretty

RD

Thank
and
sales

you. Just and

wondering
and

as

we

look

at

the the

operating headcount those kind

expense

lines
in

marketing
talk to

we know we saw
that

from

number

those

wasnt
as

much

of

decline.

Can you
just

us about

how youre
in

without
the

using headcount
related to the

reduction
in

and

then

from

the

increase that thats driving

GA

getting
is

of cost savings outside of

there

anything

charges

change

stock-based

compensation So Ill answer from of the and

up

this

quarter

PATRICK
mentioned is as

PICHETTE
the prior

CFO GOOGLE
the

that

question.

The overall what you have
if

on

call that the prior

biggest

change
this issue

quarter-to-quarter bonus accrual
resetting tied to in

we

mentioned plaimed
starting

on

call

was
were

seen as we of our costs you wish and the trajectory which was kind of higher than we had Q4
plan as flow
into

originally

because again fresh
its

our results

better

now were
are

the

what

is

typical

plan for the
that quite

year

so were include about prudent

and those
fair to see the

bonus accruals which
that that

labor

different

categories to

do
diligent to

RD.
and

It

is

--

also

say

across
also
is

many
part

of our categories of our results have
in

of costs

weve

continued So

be

our trajectories
that
is

and

you

them
biggest
for

number
through

of categories.
the

we

continue

be

essentially

element

that

would

flowed

Q4

to

Q1
at

expenses.
that delta at for in the

HEATH
accrual
is

TERRY
reasonable
to

And

so

just

the

follow-up of what

side

of that plans are
that

is

it

fair to the in the

say

that

looking needs
last

bonus

expectation and

of kind
the

your

for

level

business

to

be

outperform

ance

happen

us to see

same thing

we saw

fourth

quarter

year for the

necessary

bonus accrual

catch-up

PATRICK
plan
at lets

PICHETTE
its

Im

not sure

understand

the
is.

question.

If

your

question

is

will

--

like

we

have

now

reset

our

say that

100%
Yes.

right whatever

100%

HEATH
PATRICK
terms
the

TERRY

PICHETTE

So now were
hope
to

miming
your

this

year

with

the

expectation

of

100%

and

we
now.

hope
If

to

beat

that

in

of--

because

you always
see

beat
in

plan but thats
as

what were

miming with

right

between now and
at that

end

of the

year we

big ramp-up

our performance

we

see

that

we

will

take

appropriate

accruals

point.

HEATH
PATRICK

TERRY

Great.

That

was
Lets

my
go

question.

PICHETTE
Well take

Okay.

to

the

next question. Jim Friedland from

OPERATOR

our next question

from

you Cowen Wanted
to

and

Company.
question on
is

FRIEDLAND
was
indicated
early features in the

ANALYST COWEN
last call as

COMPANY
more
in

Thanks.

ask

Google
the

apps

that

key
to

area for investment. do terms on

And

at

this

point

in the

evolution

investment
are

more on new
additional

or are

you

starting

of building
the cost

enterprise

wins

especially

in this

environment

savings

sales up an enterprise and can you name

force

and

you seeing

any
is

JONATHAN
pretty large

ROSENBERG
this

SVP PRODUCT
Avago which

MANAGEMENT
think
is

GOOGLE

Sure.

This

Jonathan. deployed

We
the

had some
app
suite

deployments

quarter.

the

semiconductor

division of

HP

Q1

2009 Google

QA
or

Page
Session Final

FD

Fair

Disclosure

Wire

April 16

2009

Thursday

14 to several

1-0003
states

thousand
launched
deals

maybe
in early with.

5000
Q1.

6000
also

users. quite

We

had some progress
bit

in

one

of the
side

big with

Mexican
60

of Mexico
universities

too

which
that deals

we
with

We

had

of progress on the and

EDU

colleges signed

and

we

signed

Some

of them

believe

were Cornell
think
is

Georgetown. of Michelin.

know we
So

other significant
significant

T-Mobile

Fujisoft

Euro Master

which

subsidiary

think

theres

progress

there.

The kind of
in the devices. getting cost

functionality

that

were working on
one of the

are

some of

the

big

--

some
as

of the

big holes that synching
to

think with

we

still

had

suite offline

support
pretty

was probably
strong
reseller

more

significant

pieces

was

better

mobile
range. the state

Were
lot

seeing

demand program

and

traction

in

organizations and got
cost

in sort

of the

3000

15000 what

size
is

Were
in

of help with the environment

that

we

launched

think

your

observation

about
are

challenging think study

think

we

are

seeing

that

weve
of the

number of customers
savings
relative to

who

using the

paid apps big

version.

were
that

signing

on more customers were
fraction

because of the
price

competitors.
to their

Theres Cloud

Forester
offerings.

showed

that

of the

competition

even

relative

based

So

think
lot

were

doing

pretty

well.

Theres

one

category building
are

manufacturing

and

spinoffs

of large

companies
examples.

seem

to

make
the

of sense

particularly
is

when
and

companys

new

infrastructure

and

weve

got some

think

Avago JIM

example

one

of those

know

there

more.

FRIEDLAND
at this

Are

there

particular--

sorry
its

are
little

there bit

particular

industries

where apps

are

being

sort

of better

adopted

point

versus

others

where

maybe

more complex
any
correlation set

and

harder to get into terms of the
the

JONATHAN
think
its

ROSENBERG
function quick and and of

Im
the

not sure

could
the

establish

in

categories

of industries
institutions are

more

how

users and
as the

IT

departments
that

are

up.

Certainly
that

educational of spun

have out to
really

made
start the its

relatively

robust

progress

have

companies dynamics

mentioned established
size

have

sort

out and think

from

scratch

build and
that

dont have
could

legacy
Its

that

companies

do.

But
than
it

thats

only few

broad
to

observation
or

make.

more

function

of the

of the

Enterprise

is

the

industry.

So

several

10000

even think

15000. well
to the

KRISTA
JIM

BESSINGER

go

next question

please.

FRIEDLAND
And

Thanks.

OPERATOR
STEVE
had
almost

well

take

our next question

from

Steve

Weinstein

from

Pacific

Crest.

WEINSTEIN
full quarter basically

ANALYST
benefit

PACIFIC CREST
the

Great.

Thank

you very much.
so when
in the

Just at

trying

to

understand

you

still

from

DoubleClick

acquisition

and

look

your

US
flat

business

where

youre reporting

3%

growth without dont have
will

DoubleClick
details.

was wont

the

business

US
that

basically

year-over-year

PATRICK
the

PICHETTE
had

those
--

So

answer
the
first

it.

It

is

true

we have--so
What
for

if

you think
say

of
is

coming

quarters
is

DoubleClick

be

like

were
the

finishing
first full

year of DoubleClick. revenues of that.

can

which
but

factual

statement
is

we

in in

Q1
the

were

finishing

year of recognizing youll
see the effect

DoubleClick

now

DoubleClick

integrated

all

display

business

so in

Q2

STEVE
So
to
if

WEINSTEIN
out basically
right

Okay.
the

As

follow-up
in

then hopefully

we back
on

$46 million

expenses

you can clarify as you kind of recognize

one
sort
is

more thing
of one going

on
is

the that

GA
the

expenses. run rate
the

time
to

fair

work

now

guess

Im

missing

something

about

how

the

bonus

accruals

change

throughout

year.

PATRICK moved
into

PICHETTE we

No
reset

what Ive
it

mentioned than

is

that

the

bonus accrual
additional

that

we

took

in

Q4

that

did not get
about.

Q1 because

much more

offset

these

expense

pressures that

we

talked

STEVE KRISTA

WEINSTEIN BESSINGER
And
well

Much
Next
take

more.

All right.

Thanks.

question

please.

OPERATOR

our next question

from

Richard

Fetyko
If

from

Merriman
to

and

Company.
the

RICHARD FETYKO ANALYST MERRIMAN
display next
initiatives three

COMPANY
the

you were
one do

compare
to

mobile bigger

and

the the

two

you years And then
if

and

include

YouTube

within

display

which
elaborate

you expect
the

be

opportunity

follow-up

up on that

could

you

more on

display

ad

strategy

you

have

Q1

2009 Google

QA
the

Page
Session Final

FD

Fair

Disclosure

Wire

April 16

2009

Thursday

14 the
little

1-0004
into. Just

ad

exchange

you have

also sort

AdSense
or

for

display

or

for

content

that

youre

integrating

display initiative.

give

us

more color on what

of strategy

products

youre emphasizing

within

that

display and do
the

PATRICK
issues are that offer

PICHETTE
the

guess around

Im
the

not

--

basically

mean
to

broadly and

the

story

strategy

is

to

address

the

of and
to

challenges over
the

way

display

ads are
trying
it

bought bring

sold and

we

fundamentally
the

believe

that

those

going

change with

coming

years and
to

were
and

much more
efficient scale

measurability
for

kind and

of efficiency publishers going
to to the

we had
better

Search

advertising

display

make
building

much more
the largest

both
that

advertisem

ads for users.
advertisers

So on
the

mean
one

its

basically

network
the other.

we can

thats

give

best

ROT
So
if

to

side

and

the

best yield

to

publishers products
effective

on

we

get full
for

integration advertisers their

of DoubleClick
to create so

and Google manage
its the the

were

going

to

have

the

combination to

of this big
the

leading

platform and

and

most

campaign
able

and
to

publishers do both

on

other side

manage
will

monetize

inventories
Its

think
to

combination whether
or

of being not the

of those

things
the

we

expect
side

be

very very powerful.
mobile
side will

hard

for

me

handicap

scope both

of overall and

revenue
strong

on

display

or the

be

bigger.

Were

obviously sense

very very excited about
of what
the size

making would

progress in both.
like in

RICHARD FETYKO
years.

So

dont have

of those

industries

look

two

or three

All right.

Thanks.

KRISTA

BESSfNGER

Next

question

please.

OPERATOR

Well take our next question

from

Doug Anmuth

from

Barclays

Capital.

DOUG
color

ANtvIUTH
on
the

ANALYST BARCLAYS CAPITAL
reasons
for the

Thanks
costs

for

taking

my

question.

Can you provide

some

Patrick

sequential
for

decline second.
still

in other

of revenues look gain in other cost equipment
issues or

PATRICK
revenue machine
if

PICHETTE
go through

Hold

on

just

Ill just

take to

at

my

notes
rather

here.

of

just

my

notes

they are
it.

tied

mostly

payroll

issues

than

utilization.

And

so

thats

basically

DOUG

ANtvIIJTH

So just

to

clarify

so youre saying

more

related

to

the

bonus

accrual

than

to--

PATRICK

PICHETTE

Thats

correct.

DOUG

ANtvf
ANtvITJTH

Depreciation Thats

PATRICK

PICHETTE

correct.

DOUG
KRISTA

Thank

you. question
to

BESSfNGER
And
well

Next

please.

OPERATOR

go next

George

Askew

from

Stifel

Nicolaus. Nicolaus.
in the

GEORGE ASKEW ANALYST
address
If this

STIFEL

1IICOLAUS
trying to get

Thank
sense
first

you. George of the
size

Askew
of the

at

Stifel

Im
first

going
quarter.
first

to

bonus
at
it

issue

one

more

time.

Im
for

just

bonus
to the

accrual

you look

as
it

percentage materially

of sales

example

in the

quarter

09 compared

year-ago

quarter

quarter

08

was

different

PATRICK
your

PICHETTE
think
said

dont have
at

the

answer

to

that

question. or
it

But
be

think
to

again get

in

general

terms

if

you think

of

modeling

looking

run rates

from and

year ago
actually

may
does

useful

sense

of magnitude

versus Q1.

Q4

because

Q4

as

was

sufficiently

different

make
as

difference

between Q4 and
theres
et the

GEORGE ASKEW
late this

Okay.

Okay.

Fair enough.
is

And
to

then

secondly
full

follow-up

media
cetera

reports

hinting this

afternoon
there.

here that
Is

YouTube
can

partnering
tell

stream
this

length

movies

TV

shows
and

redesign
that

happening

there--what

you

us about

kind

of news

on YouTube

redesign

appears

to

be

imminent

JONATHAN
that

ROSENBERG
content
to

This

is

Jonathan.

Certainly viewing

what were
and

hearing

from

both

viewers
to

and
as as

advertisers

is

they want
there

premium

and

the as

premium

experience
quality details for
that.

we want YouTube
as

be

comprehensive

as sizes folks

oearch and
at

and

we want
theres might

aaract

much
or

professional

content

we

can

and advenisers coming
all

we

can

of

all

types.

believe So you and

conference

some

additional

on

the

Sony
should

issues

out directly
details

from
the

the

YouTube.

want
from

to

take

look

and

watch

They

have

of the

about

Sony

relationship

dynamics

Sam

Bruno.

Q1

2009 Google

QA

Page
Session Final

FD

Fair

Disclosure

Wire

April 16

2009

Thursday

14

1-0005

GEORGE ASKEW
KRISTA

Got you. Okay. Next
take
question.

Fair enough.

Thank

you.

BESSfNGER
And
well

OPERATOR

our next question

from

Mark
one

Mahaney
quick
in the the

from

Citigroup.

MARK MAHANEY
think
there

ANALYST
know
as
it

CITIGROUIP
stated Is that
is

Just

financial

goals question. simply
that

In past historic

years

was

goal and
as

was

at

Investor

Days

past

to

expand pro forma happened forward
this that

operating but
is

income way
as

sequentially

long
the

possible.

still

goal within

Company

quarter

the

you think

about

financial

goals

just

to

expand

that

sequentially

going

non-GAAP

operating

income PATRICK
certainly that

PICHETTE

So two

points.

wasnt
guidance

there

in the

old

days

when whoever

who

have All

said

what.
its

But
important

under

my

rule
is

we dont we
are

give
--

any

going

forward

on any of these management
talked
at

dimensions.

think

people
as

understand

were

demonstrating

responsible
fact that

over on kind

our resources.
the

You
call

should our

consider revenues seasonal mindset

you think
seasonal way.

of your and

modeling
just
is

you know
think

the

we
as

length of

previous

that

are in that

you

got to

of our expenses

much more
not.

of fixed cost.
still

So our labor
should apply

not seasonal your modeling.

and our expenses

are

Because

were

growing.

Theyre not So thats the

you

to

MARK MAHANEY
KRISTA

Thank Next

you. question
please.

BESSfNGER

OPERATOR

Well go next

to

Suna rom

JItv

Securities.

SUM
networks

SUNA ANALYST
understandably
see start to

iMP SECURITIES
youve been
taking

Yes
some

thank

you. Couple over these
the

of questions.
last

If

you could
to

talk

about
it

the

business

initiatives

couple

of quarters have

clean

out.

When

can

we

improvement

in that

business

when

you end

initiatives

and then

housekeeping

follow-up.

PATRICK
you asking

PICHETTE

Could you

clarify

exactly

--

are

you asking

about

AdSense

for

Search

What

exactly

are

MARK MAHANEY
down
getting sequentially rid
little

The Google networks
bigger than
it

business
last that.

Im

just

looking
talking

at

that about
--

kind that

of open

it

up

over
--

here.

It

was

was down
like

quarter.

So Im
those

you had
do

some

you were

of some

arbitrage

players

things

When

are

activities

when

you think
clean-up. just

that

ends
that to

PATRICK
date
the

PICHETTE
has been

Some
largely

of that

relates

to

partner kind
the

issues.

Some

of
cat

it

is

the

network

think
like

clean-up

successffil

but its
that

of an ongoing
issue

and

mouse
fixed. the

game
think

e-mail

spam.

So

dont think
pretty

would

necessarily
in

want
last

to

suggest

clean-up

has been

we

did start engaging
that

aggressively probably
issues

those

efforts

year and
partners

weve made
that sort

great progress. have
that

think

other piece
that are

you may

see

is

theres

some FX
that

issues as full

and other
well
list

we

our built

in there

seeing
overall

the

same kind of
is

economic
factor.

we

have
the

as

having

to

of understand

which

partners

are

in the

mix which

We

dont give you

of those

dynamics. follow-up can
talk the

MARK MAHANEY
repriced

Sure.

In terms
these

of the

you

about

the

correct

share

count

to

use.

You had

some

options.

Would

become
the

dilutive

any time during

year

PATRICK

PICHETTE

Restate

question

for

me

please.

MARK MAHANEY
share base

You

repriced

some options They

some underwater
at

options
is

do

they become

part

of the

diluted

now

that

they are

in the

money

were priced
is

my

sense

about

306. So you

PATRICK
them.

PICHETTE

No

not any

time soon

the

answer.

Very small

very

small.

wouldnt count

on

MARK MAHANEY
PATRICK
there
is

Okay.
Just

Thank
to

you very much.
Jonathan
for

PICHETTE
between kind
as

complement AdSense you think
earlier.

on

the--to

come
for

back

to

the

issue

of the

network

mean

difference
different

obviously
if

search

and

AdSense and
the

content
side

and

clearly

two types of businesses
branding
in

with

two

of rationales mentioned

in the

behavior side

content

obviously challenging

oriented those

display

campaigns

bit

So

on

that

obviously

remaining

Q1 because

Q1

2009 Google

QA
shift

Page
Session Final

FD

Fair

Disclosure

Wire

April 16

2009

Thursday

14 advertisers tighter

1-0006 chance
to

kind

of typically So really

will tale

to

more

relative

to the

their

performance
for

based and

advertising

if

they have
content. Just

and

budgets.

of two

cities

between

AdSense

Search

AdSense

for

complement

Jonathans.

JONATHAN

ROSENBERG
Sure.

agree.

Thats

correct.

SUM
KRISTA

SUNA

Thank Next
take

you. question

BESSfNGER
And
well

please.

OPERATOR
JAIvIES
the

James

Mitchell

from

Goldman

Sachs.

ANALYST GOLDMAN SACHS
of no longer providing rebates
to

Hi

thank

you

for

taking

my

question.

Can
business

you

talk

about

impact

agencies second.

on your revenue

growth

in the

international

PATRICK

PICHETTE

Hold

on

just

for

JONATHAN
JAIvIES

ROSENBERG
Indeed.

Youre

referring

to

the

best

practices

funding

JONATHAN
that
so.

ROSENBERG

Which

weve

phased

out over

the

course

of the

last year.

Patrick

wasnt

here

for

all

of

PATRICK want

PICHETTE

What

would

be

specific

James

in

your

question

like

what would

you like What

do

you

JAMES vllTCHELL
it

There year

was
its

something

that

materially impacted

the

first

quarter

or

is

it

something

that

because

was

phasing

over

the

last

been

more-have

PATRICK
JAIvIES

PICHETTE

No
Okay.

it

wouldnt

been

material.

Thank

you.
please.

KRISTA

BESSfNGER

Next
to

question

OPERATOR YOUSSEF
understanding
is

Well go next

Youssef

Squali

from

Jefferies

Company. Thank amount
you. of

SQUALl ANALYST
that

JEFFERIES were
still

COMPANY
getting to zero. fair

So

just

to

reiterate

on

the

BPF
and of

our

number

of agencies
that

money somewhere
that the

between

7%
call
it

back
in the

as

of

Q4

and

starting

January

went down by that

So youre saying

year on year decline

9%

UK

guess was not materially impacted

PATRICK
mattered
for that

PICHETTE
agency

Thats

correct. total

For total revenue
it

but in the

of our revenues

you may have had one agency wouldnt have been material.
revenues reasons

for

whom

it

would

have

YOUSSEF
you kind

SQUALl
about

Clarification.

Why

was DoubleClick
of provide
the

weaker
why.

this

quarter

think

on

the

prior

call

of talked

that

but

you didnt
think

kind

PATRICK
DoubleClick

PICHETTE
and

Well

theres

two elements
for the

on

it.

One

is

seasonality
related the to

because
the

if

you think

of
in right

Q4
lot

its
is

been
big

very strong element of the

quarter

display

advertising second
is

Christmas

certainly

North America

which
of

DoubleClick

and
the

then

entire

economic
that

environment

now
the

is

putting

pressure on that

business.

So

its

combination

of these

two things

really

were

seeing

in

market.

YOUSSEF
PATRICK KRISTA

SQUALl
PICHETTE

Okay.

Thats

helpful.

Thanks

Patrick.

Youre

welcome.

BESSfNGER And
Well take

next

question

please.

OPERATOR
CHRISTA
some of
sort the

our next question

from

Christa

Quarles

from

Thomas was
example

Weisel

Partnem.

QUARLES
data to relative

ANALYST THOMAS
little

WEISEL

PARTNERS
is

wondering
that

if

you guys
in

to

dig

into

mobile

bit

more.

guess what Im seeking
in

in this

you have
to

Japan

do

you have

of

RPS

what youre seeing
to

other markets with
their

in

terms

of increase
the

listened

your

mobile
are

webinars chances
to

where

you guided

advertisers

bid maybe

4X

bidding

on

PC

simply

because

there

fewer

Q1

2009 Google

QA

Page
Session Final

FD

Fair

Disclosure

Wire

April 16

2009

Thursday

14

1-0007
is

be

shown.

mean
on
the

is

there

guess
to

any quantification
the

whatsoever

you can

provide

around

how

monetization

ultimately

different

mobile

relative

PC
its really

JONATHAN
promise we
think.

ROSENBERG
mean
if

think

too early. about

Its

too early
or are

to

say.

think

that

we

--

we

certainly

see the

youre asking Well
are

specifically

Japan

you asking-is

CHRISTA
really interesting

QUARLES
that

guess

what Im what was
said

trying it

to

ultimately do browsing

quantify.

thought

Erics

comment

was

you guys

now
think

8%

mobile

share.

JONATHAN
CHRISTA
guys. even So again

ROSENBERG QUARLES
trying to

that.

Or you

said

it.

Yes.

Somebody

said

it.

Which

is

the

first

time

had seen

that

data

out of you

quantify

what
in

this

opportunity context

could

ultimately
to

can then be

and

if

monetization might

ultimately becomes

more intriguing

interesting

mobile

relative

PC one
is

people

get more excited. talked
five in

JONATHAN
remarks couple about of years.
It

ROSENBERG
powerful
is

Yes. phones nearly point

personally
are

think degree

mobile
to

going

to

very significant.
is

my

prepared

how

the that

and

the

which

search

traffic

up over
outside Japan

times in the

last lot

the

case

80%
are

of our mobile

search

queries come from

from

of the
to

US

so

of the

lessons that and
India.

were

learning

at this

lessons that

were learning

markets

like

some extent

China

think and they
all

the

thing
this

you

really

have

to

look

at

is

if

weve

got 100

million

175

million SmartPhones

shipping
talking

in

2009

have
that

much
exist

much

different couple
display.

very

rich

mobile

browsing

experience have
the

youre
processing
that

basically

about didnt have
the

something
battery the
life.

didnt

on phones
the rich

of years ago.

They
an

didnt impact

power.

They
well.

They

didnt

have
that

They
and

didnt

have

mechanism

worked

We

didnt
that

have
the

kind
is

of fast networks wonderful experience these

we

have

today

were
apps
that see

now
and think

seeing

many people many
be
fast.

developers be
location the

understand aware.

web
offer

this rich

platform and even

for

these

mobile

they could
is

They

could
to in

They
value long

can

work

offline

and
to

fundamentally
are

going
likely

change

whole
in the
--

equation

with

devices.

And youre
against an ad or interested

going

that

users

much more
mobile

my

opinion

run to

consummate
probably
transaction.

transaction

ad that

they were served ad because

on

phone

because and

theyre ready
to

much
go

theyre

clicking

on

that

in that

theyre

out somewhere

consummate

So

think

theres

lots excited. in

of reasons

to

think

about
deal

where

the

business

is

going
the

and

where these phones
growth
will

are

going
there.

which
than

make

us very

Theres

not
is

great very

of data yet on

what

pace

of revenue

be

Other

what were

seeing

Japan
Just

which want

promising.

CHRISTA
Obviously

QUARLES
broad based
there

to

follow-up there

on

the

mobile

side

you guys
further
if

have

an

investment
additional

in

Clearwire. cash
or

theres
-is

concerns around
that

would

you guys

ante-up

they needed

guess

whats

the

any plan

investment
across
the table
is

JONATHAN
potential

ROSENBERG

The lawyer

telling

me

to

tell

you we

dont comment

on

future

investments.

CHRISTA

QUARLES

All right.

JONATHAN
other markets mobile devices
like

ROSENBERG
Japan
that
is

One thing
in the

would

actually there different.

urge
are

you

to

think

about

when

that

some of these markets dynamic
an

and
than

makes
markets

very very

many And of

users course terms

who

only
is

access
far

you look at some of these the web through their
ahead
the in

Japan

terms of mobile
are

consumption
be.

other

so its

interesting

market

to

look

at in

of where

think

trends

going

to

CHRISTA PATRICK KRISTA

QUARLES
PICHETTE

Got

it.

Thanks

guys.

Thank Next
to

you

Christa.

BESSfNGER

question
Justin

please.

OPERATOR
JTJSTIN
things engines
see

Well go next

Post

from

Merrill Lynch. apologize already addressed one
rates this

POST ANALYST MERRILL LYNCH Hi
really interesting

if

youve
its click

but one

of the

on YouTube youve
rolled

is

the

quantity

of searches
is

and
the

becoming
through

of the

leading

search

out there

and

think

out some

new ads what

on some of those video

Q1

2009 Google

QA
up
on
in

Page
Session Final

FD

Fair

Disclosure

Wire

April 16

2009

Thursday

14

1-0008
see that as

advertisements one of the

that

are

showing

sponsored and

search
if

results

Are you happy
is

with
right

that

and

do

you

maybe

bigger

opportunities

YouTube
think

not what
in the

really

working
stage

now
lot

JONATHAN
traffic

ROSENBERG
the

were

still

experimental

on

of

this.

Theres
basis

no doubt new

from

perspective
highs.

YouTube

phenomenon
point

continues. at

Were

definitely

hitting

on an ongoing

playback

and

upload

Were

basically in the the

at this

looking

multiple different than
the rates total

ad of

formats.

Were
whole
on have

certainly

monetizing

hundreds

of millions
site.

of videos

US

every

month which more
in

US

monthly got query

views

We
is

dont give you

specifics

terms

of click

through content

but

weve

bunch

on any other online video of new form and new
for Star

content.

We
one page

just

launched

in-stream youll have

ads on
see

long form

so

if

you do

YouTube
there.

Trek

Charlie
the that

which home
goes

of the

episodes ad
that

an

example

of some

of the

new

ads that
results

we

Omid

mentioned
is

format
the top.

we

which
its

across

think

today
are

were very very happy with the Frank and yesterday was Volvo.
it

on which
also details

basically

masthead
videos

Weve
more
far

got the on
the

promoted
click

which

we

launched

last quarter

which
Okay.
getting

doing can
or

pretty

well

but

cant

give you
is

any
as

through thoughts

rates.

JTJST POST
margins
the

And
better

you

tell

us

how

the

engine

doing

as

profitability

Any
all

on
going than
in that

Are they
line the

worse And

thenjust

follow-up
the

on DoubleClick.

Are

those
that

revenues

licensing

and

did

display

help your

overall

growth rate

6%

was

display

something

grew

faster

and

helped

overall

growth rate So
does think

PATRICK
then

PICHETTE
back out
if
it

on
--

the

display

side sorry

it

does

go

right through does

the

licensing

line.

So

it

does

and

you can

make
kind

DoubleClick
that

yes DoubleClick

go through
overall

that

line.

POST
PATRICK

So

we

can

of back

out and

see

how

its

affecting

the

growth

rate.

PICHETTE
Okay.

guess
Great.

so.

JTJST POST
KRISTA

Thank

you.

BESSfNGER

Next
to

question

please.

OPERATOR
JEFFREY
reduction
interested just

Well go next

Jeffrey

Lindsay

from

Sanford

Bernstein.

LINDSAY
how

ANALYST SANFORD
cost.
is

BERNSTEIN
mix
shift
if

Thank
it

you.

Just

want

to

ask

about

the

large

in traffic in
is

acquisition sustainable

This was that
the that current

due

to

or

is

that

youre

rolling

off

expensive
if

deals What Im
its

trend

and

then

how

long youve

got

to

run on

AOL

and

Ask
is

you could deals
mix.

just

mention--

dont know

public

or

not

PATRICK we
have
in

PICHETTE

Okay. think
its

So the also
if

short

answer
at

it

is

And we
Q1

obviously

dont comment

on any deals Google
category from

that

our pipeline.
the

you look
and

our

Q4 08
-if

versus

09

our Google
the

TAC
in

versus
the

total

revenue then

on

Google

side

its

gone

up
and

slightly

thats

you think
it

of--

theres
the

mix within

and
tool

theres

mix between categories
distribution

on

the

Google

side

obviously think

reflects
it.

growth

our revenue

bars and

browser

agreements.

So thats how
please.

would

about

KRISTA

BESSfNGER

Next

question

OPERATOR
JEETIL
adjust for

Well take our next question

from

Jeetil

Patel

from

Deutsche

Bank.

PATEL ANALYST DEUTSCHE
and

BANK
look
like talk

Couple

of questions.
still

Broadly
or flattish

two

different

questions. basis

If

you

FX
for

you

look

at

your
as

CPCs
before. are

they

they were about

up

on

year on year

when
in that

adjusting particular could terms and

FX

but not as regions
overall

much CPC

Can you
seeing

guess

conversion changes
like the in

rate

coming
or

off

and

guess

which

are

more

--

you

more pronounced
guess
it

CPC

conversion
fell

rates pretty

out there quickly
its

fluctuate

the

trend.

And

then

second

looks

UK

obviously steady

in

of revenue of world general
early

constant
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currency of

and
bag.

then

came back.
can
this
it

US

it

seems

like

more of

decline

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own

rest in

kind terms

mixed

guess through

you

characterize

where do
seeing pace
that

you think
in the

we

are

of world
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it

camp

in

of kind
to

going

recession look
like
it

and
will

impact
to

probably

stages

similar

US

trend or does So this
to

similar

UK

some of your regions
Thanks. of the from

JONATHAN
equation growth. so

ROSENBERG
not sure

is

Jonathan.

mean we dont
lot

really

break cant

out the derive
call Its

components
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RPM
seeing

Im

Im

going

give you
that issues issue

whole

of color here. think

You

price that

paid clicks

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is

total

amount of information
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we

give from

you
the

did say emerging

on

the

some of what were
an

on CPC
Its

mix
the

issues.

mix
the

smaller

markets. lower

certainly

FX
in the

component. past and
as

certainly

lower dollar

items and

of conversions

being

relatively

than

they had

Q1

2009 Google

QA

Page
Session Final

FD

Fair

Disclosure

Wire

April 16

2009

Thursday

14

1-0009
is --

Eric

mentioned

the

auction

working and had seen
lot

advertisers of

advertisers in the

lowering
quarters

their

bids. the

So

think

that

that

those cant

are

components.

We

certainly

CPC growth

before

economy

collapsed.

But

give

you

any more

detail

than

that.

JEETIL more coverage
of the

PATEL
are

guess seeing

in

some

of the

nascent

regions that

are

still

ramping
course emerging

if

you open
last

up more

distribution or in

or

you

bid
is it

prices

improve

like

you saw over
in

the

of the

couple

years here

some

more mature

markets

or

different

dynamic
that

some

of these

markets
lot

JONATHAN
more nascent
actually the

ROSENBERG
of the market

So
rate

think so
if

were
sort

seeing

different

because

of those

markets

are

sort

of at the

stages leading theyre
like

growth
and
just

said as

theyre

you map them against what we saw in the US or the behind years us many of them are on growth trajectories
of few years ago
also

UK
that

which was
are

strong

but obviously dynamics
just

being
are

we
and

were of

but obviously
the

thats
there

being
too.

dampened

by

the

economic

things

here

course

you

have

FX

effects

KRISTA

BESSfNGER

Next
to

question

please.

OPERATOR
ROSS
one
or
--

Well go next

Ross

Sandler

from

RBC

Capital

Markets.

SANDLER
or
all

ANALYST RBC
questions. advertisers

CAPITAL
Follow-up
to

MARKETS
on
all

Hey

guys.
issue their
is

One kind
earlier.

of high

level like

question

and

then

one

two accounting
these the the

the

pharma ads
to

So looks

the

FDA may
easy task for

actually

require to increase

pharma
available

add

the

disclosures particular

ad
that

creatives.

Is that to

fairly bit

Google

character

length

on those

ads or

going

be

little

more

challenging

given

complicated

teclmology

JONATHAN
wont
Can
be
able
it

ROSENBERG
come
to ideal
it

Yes Im we had Maybe

not sure terms

what were
of what
the the

actually right

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to

do

there.

Im

not convinced

that

we

to

some agreement
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in to not.

solution
to

with

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some of these

issues.

Certainly
it

wouldnt be
Yes.
Is

modify

user interface

accommodate

substantially

more information.

be

done

easy

ROSS

SANDLER

Okay. So were
the find
if

JONATHAN
another

ROSENBERG
do
it

going

to

way

with

the
to.

advertisers

to

make

this

work

in

one

way

or

and you could

within

existing

creatives

you had
that.

ROSS
are

SANDLER
on

mean
hold until

just this

quick
issue

follow-up
gets

on

Are

the

advertisers

actually

still

doing

stuff

right

now

or

they

completely

resolved

or

can

you not comment
that

on that
shut off think think
is

JONATHAN
details to the

ROSENBERG
of the

believe
activity to that there try

there

are

some

things

have

been
are

but

dont know
to

all

of the
relative
it.

about

what subset which was

has been
address.

shut off Some
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of them big

attempting
as folks are

change

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standard
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deal

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small

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health

was doing

particularly

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pharma

important

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pretty

segment

of the

whole

vertical.

ROSS
accounting kind

SANDLER
around
the

Thats hedging of these do

good

color.

And
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then

Patrick

if

we

can

just

get
it

little

more

clarification

on was
an
are

the

program
contracts.

of going

forward.

So the

way

was

explained
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18

month
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why
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did

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see

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one-time
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boost

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we

expect

more of

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we
Okay.

think

about

accounting
issue for

around

hedging
its

program
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that
It

PATRICK
every
quarter

PICHETTE we
set

So the

fundamental

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it

you have
immediate

is

just

happens

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as

up

another
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tranche
to

of hedges.
out.

Some
Think

short-term

we

dont

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yet

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actually

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all

way
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equivalent
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ladder

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pipeline set

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of

08 we
entire

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thats well

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put originally ladder built but in over

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we

over

couple
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now

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month
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coming bunch

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well

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every decreasing because

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of them
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rate

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happened

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decide

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item.

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item that

happened
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ones

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we had
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put in
to

September

because

wild

fluctuation

and

variability

of the

pound

over

last six

months

we

happened

Q1

2009 Google

QA
the

Page
Session Final

10

FD

Fair

Disclosure

Wire

April 16

2009

Thursday

141-0010 gain
stable
lot.

Had we had
the to the entire

Ill

give

extreme

other

case have

where spent So
it

assume
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benefits

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really to

months
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way
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investment such
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community

analysts

trying

run these

models.

really
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feel

everybody

because

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It

high volatility

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kind

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by
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133

that

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in or

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swings

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over

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place.

So what we have
place.
It

to

think

from value

our perspective

is

we

continue

to

have
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very

stable

hedging

program
because
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in

continues

to

deliver

when

theres

high volatility
floating

which
around

what happened
but shouldnt

and

we

of the

forced

mark-to-market

you have
Thats
to

decent

amount of numbers
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worry about
accrual
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too much.

ROSS
years
the

SANDLER
Google used and
it

helpful. for

One
bonuses
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question kind of

promise

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last one.

On

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bonus

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couple of
flat

ago

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growth manner so 1Q
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lowest

quarterly

ramped up throughout accrual Take $100 program.
at

year and
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highest

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spread bonus

out over

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quarters

going

to

be

25 25 25

25

or

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it

start

lOgo

up

higher

on

the

accrual

issue.

PATRICK
plan then
the as year. in

PICHETTE
and
that

We

tried

to

if

you think
to

about

it

we

tried the

to--

as

they--when
going
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you

start the

place

plan you

accrue
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according

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years
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unfold do

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year unfolds

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So thats proof of

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plan

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number has gone
live

relative

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because
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good

how

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all

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unchartered turmoil that

territory

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look

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and

our results

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and

economic

activity

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really

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if

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we had
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very strong revenue
or

quarter

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And
So

that

created

bonus

accrual
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that
results

you had thought
therefore

of September accrual

August
with
go.

right we
all

hadnt
Googlers

foreseen.

were very happy with
to
is

and of

happy
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celebrate

the

and

now were back
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our regular very

territory

heres
living

year

and heres
it

the

plan the
all

way we

Thats

why

variability.

Because

world

uncertain

and were

through

right

now

of us together. Thats

ROSS

SANDLER

Thanks.

very

helpful.

KRISTA

BESSINGER

Next

question

please.

OPERATOR SANDEEP
question is

Well take our next question

from

Sandeep

Aggarwal

from

Collins

Stewart.

AGGARWAL
are

ANALYST
bit that

COLLINS
for

STEWART
Search engine

Thank

you

for

taking

my

questions. to

Jonathan
is

one

we

seeing
--

little

higher

traction the

optimization
is

and

so question
or

you

does

that--

how

does

that threat

basically to the

does

mean

ecosystem

of paid search have one

expanding
question.

does

this

mean theres

some

potential

paid search

campaign
guess

And

then

follow-up perceived

JONATHAN
search engine

ROSENBERG

Im

not sure

what

is

the

threat

that

youre

articulating

as

result

of

optimizers

SANDEEP
optimization case

AGGARWAL
receiving
to cut

Well
the

if

Im

running running and

Google

ad

campaign

and

then

Im

also

running

searching
et

an
in that

Google

money

Im

more
at

optimizing
for

my

website and

landing

pages

cetera

am

likely

my

paid search

budget

look

someone
idea.

search

payment
saying
is

optimization
there

JONATHAN
AdWords
spending

ROSENBERG
spending

honestly

dont have

any

Youre

basically

going

to

be

shift

in

on SEOs.
Okay.
Is

And And
just

dont know.
one question
Patrick. to
--

SANDEEP
many
the

AGGARWAL
is

On

sale

team

side

just

one

thing.

think

too
call in

things

happened
but
there sales

too quickly. any of the

there--I

know
in

Omid
of
is

tried there

address
if

some
is --

of those

things expect

in the

previous

you hosted
sales

read through
or

terms of that

this

should

we

some more changes

structure

channel

anything

else

sort think
the

PATRICK
done and of thats

PICHETTE

We
drives

have

no plans
for

right

now.

that

the

work

that

was done
is

by

the

team

why
and

as

you can

imagine

any

organization

last

thing

you want

announcement
sales

every do

was very well two
the

weeks

changes.

That just so

everybody

nuts.

And

so we

had

an opportunity

in the

group

to

things
its

that

we

announced
that the

we

did announce
to

them
quite

few weeks
uncertain.

obvious
right

world

continues
plans.

be

no more plans. ago and right now we have Right So in that kind of world youve got to

mean
stay

flexible

but

now we

have

no other

Q1

2009 Google

QA
And

Page
Session Final

11

FD

Fair

Disclosure

Wire

April 16

2009

Thursday

141-0011

SANDEEP
discontinued

AGGARWAL
business

just

one

thing

about

is

there

going

to

be

any

future

revenue

contribution

from

that

audio

JONATHAN
PATRICK

ROSENBERG
PICHETTE
No.

Is there

going

to

be

any--

SANDEEP JONATHAN
comment
its that

AGGARWAL
ROSENBERG
could
offer
is

Okay.

Thank

you very much.

Sandeep
to

Im

just

thinking

about

your
that

original

question
as

little

bit

and

think and
that

the

one

dont tend

think

of these an

advertisers

we

have

having

fixed budgets
the

think

kind

of unlikely that
basis
is

someone

who

is

ruiming

AdWords
each

campaign

where theyre
click.

measuring
Tt

ROT

on an

incremental
throttle that

experiencing back
if

positive

ROT

from

incremental

AdWords
of the

seems
clicks.

unlikely that So what

they would

budget

theyre

making

positive

gross margin

on each

AdWords

youre

proposing

seems

unlikely

tome

but plausible.
Sure.

SANDEEP
KRISTA

AGGARWAL
BESSfNGER We
Thank

Okay. have

Thank
for

you so much.
operator.

time take

two more questions
from

OPERATOR

you. Well

our next question

Brian

Bolan

from

Event
touch
at the

Company.
the parts

BRIAN BOLAN ANALYST START
idea that look
to

EVENT
more
into

COMPANY
Googles
with
the favor.

Hi.

want

to

back

on

question
in

or

the just

Eric

brought and

up
or

the

ROTs

moving and

As we
pretty

look

moving
cost

there

we

at like the

clicks

searches

costs
is

conversions
the

market

much moving
just the costs the

lower isnt

that

going

be

major

factor

what

really

driving
is

ROTs

up anything
that

more than

coming
costs

down
allow

as for

advertisers advertisers

moving
to

out of the
really

space
stage

And

there

anything
into the

will other than
to

keeping

low

actually

up and
think
that

spike

market

push ROTs
drives are

higher
is

JONATHAN
develop
better

ROSENBERG
ad

really

the

main thing
efficiently

that

ROT

to

the

degree an ad

to

which
that
if

were
the

able

to

ads and

systems
to

target

more

and
the the

more --deliver
rate the
is

such
the

user clicks

on

it

theyre

more
and

likely

consummate
of the

transaction. targeting

think ad and

conversion
creative the

probably

most
of the
that

significant tools that the to

component
offer

thats

function

of the

on
website

ad.

Also

some
things

we
do

with

respect to optimizing
to

users website
rates

which
site.

analytics

and thats

optimizer kind

allow

advertiser will

get higher
that will

conversion continue
to

on

their

think

basically

the

of things

that

were going

that

improve

improve

ROT.

BRIAN BOLAN
optimizer

Okay.

And you

talked

about

the

optimizer

there.

About

what

percent

of customers

are

using the

JONATHAN
is

ROSENBERG
you look
at-if

dont think

that

weve
which

said.

Youd

have

to

talk

to

customers

directly

yourself
details

There of but

blog post

if

you type conversion
from

optimizer

on Google

where we describe some improvement
of the and

of the

study that

we

ran with
that that

bunch

of advertisers
large the

got the

percentage
are

different
--

pieces subset

we

dont

release tools

number. Tve

pretty

portion

of our advertisers
the

using some
the

various

some

of the
analytic.

various

mentioned
Great.

website

optimizer

key

word piece

conversion

optimizer

Google

BRIAN BOLAN
KRISTA

Thanks

lot.

BESSfNGER
Thank

Last question take

operator.

OPERATOR ROBERT
click

you. Well

our final

question

from

Robert

Haley Wanted

from

Gabelli.

HALEY ANALYST
And
or
if

GABELLT
whats

CO.

Great.

Thanks.

to just

ask

one

question

on your paid
advertisers in

growth.

you could
talk

talk

about

driving that

growth whether
basis.

its

growth

in the

number of

using

Google

maybe
to

about

paid click changes

growth on
in

per advertiser

And how

thats

impacted

by changes

budgets

allocated

Google

versus
Tll

consumer click-through
statement

behavior
Jonathan

PATRICK mean
our traffic
to

PTCHETTE
continues

make

just

broad so
if

and then
of general

let

complement
of whats
different

if

you wish. There
in

is-

to

grow.
to

mean
have

you think
to

principles

going
effects

our favor that

our traffic

continues obviously issues

grow and we

continue
if

paid clicks

our network.
like the

There versus

are

within
like

which

at the

macro level
vertical issues

you get
if

mature market youre in and you get value issues and information

US

an

emerging think

market about
it

thats to

basically

how we
if

you get mix and manage dont
Tndia
it.

know

Jonathan

you have

additional

you want

share

or

missed

something

big.

Q1

2009 Google

QA

Page
Session Final

12

FD

Fair

Disclosure

Wire

April 16

2009

Thursday

141-0012

JONATHAN
there

ROSENBERG
that

and

beyond

dont think
with
that

mean Patrick got the we really go into detail
withdrawing
the

biggest on the

thing

its

clearly

query of the

growth
equation.

is

the

primary

driver that

other components from budgeting reductions
to

dont think
all

theres echo

significant

activity said

advertisers to

themselves impacted

perspective
it

together. larger

would

what Omid

there

extent
in

we

are

by budget
says
in the

tends

to

be the

organizations

where
that

CFO
in

somebody

Patricks

role less that

basically factor really

we want
small and

cut budgets

percent and

across

the

Company
its less

and
factor

impacts

the

CMO.

Thats

much

medium

businesses
that

interestingly

even
sales

some very
as

large

companies
to

understand and

the

concept take
to

Omid

mentioned

about about
the

Google
industry

being

chaimel

opposed

marketing
the relative

expense

would
in overall

heart the

comments
and

auto

where
in

think

youre
and

otherwise

seeing

shrinkage

marketing

budgets

yet some

robust

growth
So budget
all

paid search
there

online

advertising.

think

is

still

value.

think
the

were

seeing

lot

of value
is

in

terms

of shift

in

markets

like

that

one

from reduction think
at

perspective.

By

the

way

one

other obvious
really less

area there and

dont think
the

youre seeing
of
lot

much
of this

budget
traffic.

in the

pure

play online
less

companies theyre
Great. to

who much

understand
to

measure
their

metrics

theyre

much

budget--

prone

adjusting

budget. time today.
to If

KRISTA
questions again
for

BESSINGER
dont
hesitate time.

So thank contact

you everyone
myself
or

for

your

you have

any

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please your

either

Maria.

Were happy

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