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)

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DOCUMENTS

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TRANSCRIPT LENGTII 11EADLINE
7842

071 609s1.783

words

Event Brief of Q2 2009

Google

Earnings

Conference

Call

Final

BODY
PARTICIPANTS
Maria Shim Google Google
Analyst. Broadpoint JR. Patrick Pichette

Google

CFO

Eric

Schmidt

Google

CEO.

Jonathan

Rosenberg
Citigroup

SVP

Product

Management.
of America

Imran Khan
Analyst.

IPMorgan
Christa

Chase

Co. Analyst.
Weisel

Mark Mahaney
Analyst. Collins

Justin

Post Bank

Quarles

Thomas
Analyst.

Partners

Ben

Schachter Analyst President

AmTech
Squali

Analyst.

James Mitchell Co. Analyst.

Goldman

Sachs

Sandeep

Aggarwal Nikesh

Stewart

Youssef
Global

Jefferies

Doug Anmuth
Spencer Analyst

Barclays

Capital

Analyst

Arora Google
Sanford

Sales

Operations
Jeetil

Business Deutsche

Dcv.

Wang

Credit

Suisse

Analyst

Jeffrey

Lindsay

Bernstein Steve

Co. Analyst. Weinstein

Patel

Bank
Analyst.

Heath Terry

Friedman
and

Billings

Ramsey

Analyst.

Pacific

Crest Securities

Jim Friedland

Cowen

Co. Analyst

OVERVIEW

GOOG

reported

2Q09

gross revenue

of $5.5b.

FINANCIAL
A. Key Data

DATA
From
Call
1.

2Q09

gross revenue

$5.5b.

2.

2Q09

CapEx

$139m.

PRESENTATION
51.

SUItviIvLRY

Aimotation
are

lvi.

5.

1.

Note

1.

Certain

financial

measures
to

like

EPS

net income compensation.

operating

margin

and operating

income
S2. stabilized for last

non-GAAP
Business
still

adjusted to

exclude

charges

relating

stock-based with

2Q09

Review weak

E. 5.

1.

Highlights

1.

Good

qtr.

3%

YoverY
cost to

growth.
to

2.

Business

appears

to
1.

have

despite

economic making

environment. business
to

3.

Implemented
4.

careful

controls invest

help performance.
1.

Goal

few

quarters

has been

more

efficient.

Will

continue system and

in iimovation.

Just fast

aimounced
teclmology
quality

Chrome Chrome.

OS netbooks
2.

effort
is

rethink
for

what

an

operating
in

should

be

based
3.

on

lightning

browser 100 search from

limovation
4.

key

long-term

growth

core

new Ads

businesses. fetches
1.

Did more than
facts

improvements.

Just
5.

introduced

Google
feature

Squared
called
2.

which

automatically
5.

and and

and

data

across revenue
quality

web

on

given

topic.

Has another economic

Search Gets

Options.
as

Quality

sales of

drove
identifying

healthy high and due
to tools

growth

despite

tough
ads.
3.

environment. with

better

Co.
for
6.

developed search
1.

new

ways

development areas

Experimenting
lot in

fimovative

ad formats
businesses.

particularly

in local

products rigorous
2.

video

which

should

help and

some

of these

new
on

Sales like

Has
1.

been

much more
acquisition.

management

measurement

focusing

resources

high potential

areas

Advertiser

Better

Page
Event Brief of

Q2 2009

Google Earnings

Conference

Call

Final

FD Fair Disclosure

Wire

July

16

2009

Thursday

142-0002
to identify largest well. to
2.

opportunity Helping

for

individual and

customers.
create
3.

7.

New
great to

Business ads easily innovate

1.

Display
1.

particularly click

including
studio.
1. 2.

YouTube
allowing

performed customers

marketers
rich

agencies

like
in

Double

Tools

build end-to-end 18-20
to

ad

campaigns.

Focusing

Mobile and
2.

Android. mobile

Expects division
at

somewhere

between 15000

Android powered

phones schools

on market
for

by year-end.
education.
4.

Motorola

handset

moved

all

users

GOOG.

3.

75

new

apps

Deployed

30000

employees

Valeo

indiscernible
S3.

another

10000 Review
to

employees.

2Q09 grew
that

Financial

PP.
1.

1.

Revenue

1.

Solid

revenue

growth and
despite

good
1.

expense

management.

2.

Gross

revenue
2.

3% YoverY
is still

$5.5b. vs.

Relative
2.

strength Applying

across last

business years hedging
to

Weak
to

macroeconomic revenue

environment. have Google.
1.

Dollar

quite
3.

strong

last year.

exchange

rates to

2Q09

would
3.

been

roughly

$500m

higher.

Recognized

$124m growth
verticals

of benefits

from

program
with and
4.

partially

compensate.
traffic like

com

contributed
signs to

majority of total YoverY
in certain
3.

up 3.5% YoverY
like

$3.7b

continued
electronics.

healthy
2.

growth. finance
to $1.7b.

Saw

of strength
relatively for
5.

consumer

shopping

computer
launches.
well.
3.

Others

continue
1.

be

weak.

Benefited
2.

from

number
partners
1.

of ads quality performed

AdSense

up

2%
for

YoverY

Solid

results

content Global

in particular.

Smaller

Display

business

experienced

strong YoverY
6.

growth.
costs Positive $2.6b.
2.

aggregate
1.

paid click

growth

per click impact

growth QoverQ

Down
due
to

13% YoverY.
weakening
for

2.

Up 15% YoverY. Up 5% QoverQ
dollar vs.

2.

Down FX had

2%
1.

QoverQ
Negative

seasonality.

Aggregate growth.
2.

3.

impact
1.

on

YoverY

of

US

1Q09.

7.

Geographic $2.9b

Performance
3.

US

International
1.

accounted impacted

52%Sic-see
and ongoing
acquisition

press release

or

of total revenue.
2.

UK

up 2% YoverY down 8% YoverY
from
cost

to to

$715m.
hedging

Negatively
2.

by
1.

FX

macroeconomic
costs S1.5b
3.

weakness.

Partially advertising

offset

by revenues
2.

program.

Expenses $14m

Traffic in

or

27%

of total

revenue.

Other

of

revenue
based

$655m

including
I.

stock-based

compensation. $1
to

Other
flat

OpEx
2.

$1.5b
1.

including

approx. $279m operating
profit

in stock-

compensation. stock-based
costs full-time

OpEx
while
at

lower

by nearly
increased funding

20m YoverY
$2.2b
vs.

and

QoverQ.

Non-GAAP

excluding

compensation
fully

$1 .9b

last year. in

Non-GAAP
display
1.

operating and

margin
5.

39.2%.

4.

Managed 20000
business
end.
3.

prudently employees

strategic

growth 375

areas from

search

mobile
though

apps.

Had
hire

approx.
in

2Q09-end

down
and

approx.
to

Q09-end.
in sales

Even

continuing

to

many

areas

ended

with

decrease
1.

primarily

related

reduction

and

Cash Management
focused

Other

income
1.

expense
this

OTE
was
right

marketing of $1 8m.
2.

positions For past

announced
year and

at

1Q09-

net expense thing
to

most of

2Q09
2.

on

capital

preservation.

Believes
3.

do

given

recent macroeconomic $1 8m.
rules.
1.

environment.
relative to

Realized

lower yields
prices

on investments.
Co. from
vs. to

Realized

gains on

marketable
as

securities

3.

High

volatility

options

strike

required

accelerate
2.

hedging Continued

expenses
to

per

FAS

133

Impact

on

OIE
while

on FX
benefiting
benefit to

program
from

roughly

equivalent

last

qtr.

recognize

benefits

from
to

hedging recognize

program

slightly

weaker US
revenue. and
effect
5.

dollar

1Q09. tax rate

4.

Cash 20%.

flow
1.

hedging change

program
to

allowed

approx.

$124m
and

international subsidiaries

Effective

Any

mix of earnings
related

between domestic
items have
effect

international
rate. 6.

on earnings of various
$1 .6b. in
2. 7.

hedging
1.

activities

and

hedged

on tax

Operating
significant

cash

flow

CapEx
8.

$1 39m. cash
3.

While

recent trend in CapEx
4.

has been with

declining
results

will

continue

to

make
1.

investments
seasonality.

CapEx.

Free

flow

$1.5b.

Summary
business

1.

Pleased

especially costs
3.

despite staying
to

Expected focused impacted
S4.

Economic

situation.

YoverY
in

FX
core

fluctuations.

2.

Disciplined

about and

while

on

fully

investing

on long-term

opportunities

display

mobile

apps.

3Q

tends

be

by summer 2Q09
feature. fast
is

seasonality.

Operational
1.

Review
slice

JR.
and
3.

1.

Key Launches
search
to results in

1.

To

better

serve
like

power

users
or

launched

new
2.

Search Basic key user
for
all

Options principle

Lets one than

dice

different

ways
search
1.

by time

type of result. but speed
to

better
2.

slow.

Continues

focus

on reducing
with
Picasa.

latency

worldwide
allows

is

other products.
pictures iterate

Launched
to

number of improvements
and does
it

One

improvement
computer. about twice
3.

run slide of ship
2.

show
fast

of

uploaded
often.
1.

web

quickly

as

if

pictures

were
labs

stored on
features
4.

Has

policy

and
out
1.

Redesigned
feature last
1.

Google week
like

Labs and
automatic product

releasing

new

per month.

Gmail
is

pushing

roughly

one

new

message
development products
or bets. for

translation.

Entire

suite to

of apps

products big product

robust
bets

enough.

Taken

out of beta
insights.

week.

5.

Runs

by

encouraging

teams

make

on key
and
called

teclmical

Believes on
to

most innovative
breakthroughs
the

historically
6.

considering

Search

Maps

Gmail

News
standard
in

Chrome

were based
5.
1.

teclmical

Recently

became

bullish

on new emerging
2.

HTv1L
where
mobile

Helping phones
that

make
with

web
rich

platform
are

powerful
the

and

rich
3.

applications.

Especially mobile

important versions

mobile

high-end

browsers using apps

becoming
5. 7.

norm.

This qtr.

launched

of Gmail and 05.
1.

web new

maps

run in browser of web-based

HTML

Making
better

another
faster

tecimical

bet with
8.

Google

Chrome
and
as

Whole

generation with

demand
1.

much

user experience.

Innovating

driving
traffic

monetization

mobile

and YouTube.

Mobile monetization

picked

up good

bit

of

momentum

search

Page
Event Brief of

Q2 2009

Google Earnings

Conference

Call

Final

FD Fair Disclosure

Wire

July

16

2009

Thursday

142-0003

grew driven
display than

mostly

by on

smart phones. these
1.

1.

Seeing

users on
as

these

high-end

phones
2.

are

active

and

engaged

beyond
views

search

so

advertising
in

phones

is

emerging

an

interesting

mechanism. videos

On YouTube
every
is

monetized
actively
1.

more

tripled

past year. videos

Now
10.

monetizing

billions

of views
9.

of partner

month and

promoting

featured dozen

partner

on home
qtr.

watch

and

search

pages.

One

fimovative

area

ads quality.
online.
2.

Shipped
1.

more than
product project helps

improvements
and
11.

this

Wave

totally

new

way
1.

to

communicate

and

collaborate

Whole

was

conceived Walkabout.
create

developed

by small team

in Australia.

Worked

completely
all

autonomously.
1.

Called the

Android

Chrome Wave

and

Chrome

OS

are

Open

Source.

This kind

of open

iimovation

next generation

of breakthroughs. SUItvIIvIARY

QUESTION AND ANSWER OPERATOR
IPMorgan.

Thank

you.

Operator Instructions.

And we

will

take

our

first

question

from

Imran

Khan

from

IMRAN
think revenue
for

KHAN ANALYST
about
that the

IPMORGAN
search
the

CHASE
volume
the

CO. Two

questions

one

on

the

mobile

application

site the the

you talked

mobile

has increased

significantly.

Could
it

you help us understand
your search

search

difference

on

mobile

versus

web

and

do

you think

will

caimibalize

on

desktop

And
deal
that like

secondly

some

could

argue

that

Google
of your
to

solidified

its

search

market

share search

through

some of

the

distribution are will

Ask

and AOL.

Considering

one

competitors

launched

new

teclmology and

how

worried

you
be
to

they could

be potentially
distribution

aggressive

win back

some

of those

distribution

deals

how

aggressive

you

hold

back

to

those

deals Imran thanks
is

ERIC
things mobile

SCHM
have done
their

CEO GOOGLE
last

for

your
to

questions.

On
the

the

mobile
ads.
It

search
turns

side

one
the

of the

key

we

in the

few

months
Typically

we
there

have

started

show

desktop
there

out that kind

separate and

ads have

own

formats.

wasnt

enough

demand

werent enough

of creatives

so forth. So

we
and

started the

showing

the

desktop and

ads on the
that

mobile
is

browsers
kit

of high

quality

and

these sudden
at

of course

include

the

iPhone

Android phone

anything
also the

web

inspired
rates.

browser.

All of

we

started level

seeing
if

tremendous desk-top-based

number of searches
as
if

and

very good

click-through
it

So they monetize time that those an

similar

they are
better

we

are

sharing device

same

auction

makes
the

sense

over

ads should even

perform

than

on PCs because

on
today.

mobile

we know more

about

person and we can

have

more targeted ad but

we dont

do

that

JONATHAN
thing
see that

ROSENBERG
searches
to

SVP PRODUCT
about

MANAGEMENT
volume.
the

GOOGLE
there

Yes
is

this

is

Jonathan.

The other
dynamic.
their

would

say yes specifically tend higher
to

caimibalization

dont think Mobile goes
reverse from share
to
is

really

caimibalization
are

We

that

mobile

compliment desktop
mobile
traffic.

up when
true for the

people

away

from

desks

so weekend

tends second

be

for

Of course
to

desktop.

On

the

question

think

it

is

kind seen

of too early any
large

tell

market
date.

share

perspective

what

is

going

to

play

out in the

long run.

We

certainly

havent

shift

in

IMRAN
PATRICK

KHAN

Thank

you.

PICHETTE And we

CFO GOOGLE We
will

will

go

to

the

next

question

please.

OPERATOR

take

our next

question

from

Mark

Mahaney. two
questions.

MARK MAHANEY
the

ANALYST
What
are

CITIGROUIP Thank
of the
for

you. Also

Eric
at to that

business
is

is

stabilizing. or

one

two most important
there the cost cost are lot

things

you

look

you mentioned make that call as
have been gained

you think
to

whether over
the last

business couple
that is

stabilizing

not And
talk to

then

Patrick

of cost efficiencies looks
will stay like in

of quarters.
to

Can you

us about
that

what
the

structure

coming
place

out of the

recession
or
is

whenever
this

what

extent should

we

believe

efficiencies

post the

recession

more

temporary

efficiencies

Thank

you.
stabilizing

ERIC
off the

SCHM
all

On

the

question were

we
off and

quarter
it

year and

of

sudden

our metrics and

ago became

we had no
clear that

idea where

the

bottom

was.

We

started

starting

roughly

Christmas

people

were

spending

more time searching

when

they purchased

products

they were purchasing

products

of less value.

Page
Event Brief of

Q2 2009

Google Earnings

Conference

Call

Final

FD Fair Disclosure

Wire

July

16

2009

Thursday

142-0004

Furthermore
not fully

when

they did so the
the

whole

process

just

took

more

time.

It

appears

as

though

although

the

RPMs

have

recovered with
the

other aspects exception

of behavior of the
to

have

in fact

come
the

back.

And
had been

notable

financial

vertical

other

verticals

in tells

particular us to say

shopping

and travel which
stabilizing.

significantly

effected

appear

be

recovering.
spiral that

So the

sum of those

the

word

We

are

not at the

moment

looking

at that

downward
second

we

thought

we

might

see six months

ago.

MARK MAHANEY
ERIC SCHMIDT

On

the

question--

Lets

ask Nikesh

to

offer

some perspective

on how

this

is

playing

out.

MKESH ARORA PRESIDENT GLOBAL
add
to

SALES
it

OPERATIONS BUSINESS
geographical point
basis as

DEV. GOOGLE Yes
are

just in

to

what

Eric

has already around
the

said

if

you

look

at

from

the

well we
in the to

seeing

stabilizing

some more

of our key markets uncertainty categories because

world.

Also

from

an
to

advertiser

of view

earlier

year there

seemed
bid
this for

to

be

amongst our advertisers
and major very
verticals.

who seem

now

have

come
stayed

back
pretty

and continue

go

back

and

major

The small

advertisers

have

much

consistent

throughout

process

they are

ROT
the to

focused. of search. and understand

They watched
seeing
the

understand and

value

They

what they
to

are

investing

for.

Large table

advertisers

have
is

sort

of
are

wanted

watch
from

wait for

while who seem
side as well.

have

come

back

to

the

and

that

where we

stabilization

the

advertisers

PATRICK
really

PICHETTE
Google
that

So that

covers

the

first

question.

Let

me jump

on the
last

second

one.

think
or four

think quarters

we
if

can

be

proud

at

about
the

how

Googlers

have

managed

responsibly

in the to

two

or three

you

think

everything
culture

economy
frugal

has thrown at us.

We

have

managed
is

keep
that

the

right the

balance place

too and

between

the lose

Google
kind

of being around of all
to

but generous

environment.

That

really

portrays

we

didnt

our

of magic

that.

And most
clear

think be

that

we

are

managing
costs
the last

the

Company

to

best position
fully

itself for in

the

long-term

growth.

So

it

is

we
that

are

able

disciplined

about from

but at the few

same time
is

investing
ability

our long-term

opportunities. to

So
it

think way.

what we
have

can

take

away

quarters

we

have

that

and

we

continue

manage

that

So we

the

flexibility

we

need.

MARK MAHANEY
PATRICK PICHETTE And we

Thanks.

We
will

will

go

to

the

next question from

please.

OPERATOR
JTJSTIN

take

our next

question

Justin

Post

from

BOA

Merrill Lynch.
clicks

POST ANALYST BANK OF AMERICA
like
if

Thank

you.

CPCs

it

looks

we back

out currency
or
is

at that

44 due

million
to

they were up

on paid My question 4% quarter-over-quarter.
is

and

CPCs. First on
any kind of

Is there

sign of stabilization

in that

number
is

mix and seasonality Could you
talk the
little

And
clicks
in

the

second
the

thing

paid clicks growing
are

15%
slower

growth. than

bit

about

the

mix

Are

the

higher

value
that

say

US

and

UK
or

maybe
pretty

some of
even

lower your

value
entire

clicks

internationally

Could

be

long-term

CPC

pressure

paid clicks This things

growing

across

system system
are

Thank
think
pretty the

you.
the

JONATHAN
seasonality probably have

ROSENBERG
One of
the

is

Jonathan.

Just
is

back
Brazil

to

the

clicks

across
for

the

growth

is

more

and mix.

that

we

see

that

and

China

example
clicks

significant

and

disproportionately and think

more

clicks.

So
to

think

we

are the

seeing

mix of

from

high
is

CPC Western
downward
as

European
pressure
rule

countries

US
the

seeing

less relative to

some of more

growing markets.
this

So that no

overall

having

on CPC.
the

bids tended

decline

earlier

year and

are

longer

declining

now

general

across

board.

JTJSTIN

POST

Thank

you. Thanks.

PATRICK

PICHETTE And we

We

will

go

to

the

next question from Christa

please.

OPERATOR
CHRISTA
context question

will

take

our next

question

Quarles

from

Thomas

Weisel

Partners.

QUARLES
and
its

ANALYST THOMAS
realtime searching about
the

WEISEL
attempt

PARTNERS
to

Hi.

My

question travel do

is

on

vertical et cetera.

search

in the

of Twitter is one

and

even

carve

out shopping

local

So my
offerings

how

do

you think

concept

of vertical

search

Two how

strong

you believe your

Page
Event Brief of

Q2 2009

Google Earnings

Conference

Call

Final

FD Fair Disclosure

Wire

July

16

2009

Thursday

142-0005
currently sort

are

and

particularly

how

well

you
as

are

merchandising about

those

offerings

to

consumers

And
in

three

do

you

still

see

of big monetization

improvements
Historically

you

think

vertical

search

and

improvements
because have

UI
attempts to
are sort offer

ERIC SCHMIDT
answer
specialty out. the

we

have
it

not used
as this

the

term

vertical

search

Google
said

of

question

without
this

categorizing
or
that.

category

or that. to sort

Other of take

people
the

we

going This
is

to the

service

around

So we

work

very hard
there
is

query

without
especially

bias. as

way

it

plays get

So with respect

to vertical

search

headroom

plenty

of such

headroom

our ads products

better.

And
that

so the
in fact

reason
effect

we mentioned
the

for

example

that that.

in

travel

things

have
sort

come

back

but finance
is

has not
site or

because

does

revenue.

We

understand

But we

try

not to do
to

of say there
It

travel

what have
in

you.

Longer

term you never
verticals the

know
ads are do

what kind
particularly that

of fimovation

we

can than

do

that.

has been search

observed
results.

for

example
not yet

some of these
thought through

more valuable

even

some of

the

We

have

what we

will

with

observation.

JONATHAN
opportunity So
for to

ROSENBERG

think

it

is

the

case

this

is

Jonathan
further

on

the

vertical the

side leads

that better

there

is

lot

of

get incremental
the

monetization area and

gains
travel

where you can
area then
are areas

qualify

for the

advertisers.

example

finance

the

where

there

is

lot

of opportunity from

to

do

that

so that so

you
that

end

up putting
can
further

more information
qualify

in the or

ad

and

incrementally
in the

getting

more information
interested in

the

customer

you
then

whether an
for.

not the with
is

customer

finance

area
to

is

particular specific

type of mortgage
that that

and

you send
is

them

to

advertiser

whom
lot

they are

more

likely

consummate

transaction

advertiser

willing to pay

So

there

of opportunity

there.

CHRISTA PATRICK

QUARLES
PICHETTE And we

That

is

helpful.

Thank
will

you.

Thank
will

you.

We
to

go

to

the

next question from

please.

OPERATOR

go next

Ben

Schachter

Broadpoint

AmTech.
recall

BEN SCHACHTER
advertisers that

ANALYST
about
will

BROADPO
Google
spend
in

AIvITECH
as

So years ago
and not sales

Eric

discussing guess and
it

the

idea that
the

should give us
in

be

thinking

their

COGS
So begin

and

marketing. images

was

notion

you

dollar

we

give

you
should

dollars

sales. to

now
to

with
see

more video

structured

data
just

appearing
traditional

this

am

just

wondering
actually

we

expect
the

new

monetization

methods beyond

text-based

CPC

appearing

within

soft

of basic

Google.com

search Thanks.

PATRICK

PICHETTE

will

let

Nikesh

answer

that.

ARORA
advertising monetization so you
are

Yes

in fact

thank

you very much
have have

Patrick.

In fact

we
on

are

beginning

to

see other forms

of based

and monetization on our
display to see

we

already

CPM
even

based

monetization

our video

properties
parts

we

have

CPC

networks.
different

We
forms

CPA-based come
to

monetization
forth in the

on

certain arena.

of our display

networks

beginning

of monetization

online

And

as

we go

forward

as

more and

more media begins beghming
in that to

shift

towards

online

we

are

going

to

see different
in

forms

of monetization. display
properties.

Most recently

we

are
is

see more and

more branded

advertising

on YcuTube

our various

So yes

the

trend

direction.

PATRICK

PICHETTE And we

Thank
will

you. Lets our next

go

to

the

next question from

please.

OPERATOR
JAIvIES

take

question

James
Great.

Mitchell

from

Goldman

Sachs.

MITCHELL
into
little

ANALYST GOLDMAN SACHS
bit

Thank was

you very much
controlled
first

for If

taking

the

question.

wanted some
if

to

dig

on why
this

the

general
last

and and

admin spending some severance
and
also

so well
in the
is

memory
of 2009 of

serves but

legal are

costs

quarter

year
quarter

costs
if

quarter

you had wondered

there

any

abnormalities

in the

second

of 2009

there

any reclassification

GA

into

Research

Development

PATRICK
some kind few
other are

PICHETTE

So

will

answer and

that.

So you

are

right

that

at

the

last

quarter

we
and

talked

about

there

were and and

of extraordinary
items.

items here think
that

there.

You
see

will
is

remember
result

legal

settlements prudent focus

restructuring

sales

Otherwise
the

what you
and

the

of good
is

on our general and admin
apart

we
just

really

happy with
mentioned.

trajectory

where we land

but there

nothing

extraordinary

from

what you have

already

Page
Event Brief of

Q2 2009

Google Earnings

Conference

Call

Final

FD Fair Disclosure

Wire

July

16

2009

Thursday

142-0006

JAMES
PATRICK PICHETTE And we

Thank Thank
will

you.

you.

We

will

take

the

next question

please.

OPERATOR SANDEEP
Eric can

take

our next

question

from

Sandeep

Aggarwal Thank
will

from

Collins

Stewart.

AGGARWAL

ANALYST
of

COLLINS
the

STEWART
of computing

you very much
like

for

taking

the

question. also

you give

us some glimpses

how

world
the the

look be

with

Chrome
and
if

OS
it

and be

maybe

deal with on will it be preinstalled any comments will it work with existing installed base versus just

PC
new

OEMS
we

can

it

downloaded
you.

can

downloaded

PC shipments Thank
did the be

ERIC
going
to are

SCHM
Open
talking to

Thank
Source
to

you.

What we

talked

about

when

aimouncement
to the the the

week

ago

was

that

we were
now.
as the

build an
in fact

version hardware

of Chrome

OS

that

would

available

PC community ARNl
vision architecture of cloud There

year from
as

We
Intel

PC

manufacturers
are

of both

architectures
that really

both
fulfill

well

architecture Other

design

products
are

that

very very exciting worked
out based so forth and
the

computing.
will

assets

of our strategy
there

still

to

be

on

the

feedback

and focus
the

so forth.
for that

be be
the

reference

hardware and
in

spec

would

be

appropriate speed of

features

and

and our primary
use of
all

product
that

will are

speed
promise

particular computing.

speed

of boot

computation

seamless

web

services

of cloud

Will

the

software Because people OS.
to
it

be
is

generally

available

for

download
have
the that

will

it

run on

existing that
is

hardware
other

those

are

things and
it

to will

be be very of

worked
possible
the

out. for

take

Open it and do

Source

we wont

kind

of restrictions
to it

people one

have
of the

almost

anything

they want

which

another

great benefits

Chrome

SANDEEP
PATRICK

AGGARWAL
PICHETTE And we

Thank

you very much. go
to the

Thank
will

you. Lets our next

next question from

please.

OPERATOR YOUSSEF
By some
that true for

take

question

Youssef

Squali

from

Jefferies

Company.
quick questions
online for

SQUALl ANALYST
June
as

JEFFERIES
to

CO. Thank
maybe
soft or

you very much.
softer

Two

Jonathan.

accounts

was reported well and was

have

been

than

April and
to

May
for

for

advertising.

Was

Google

there

anything
bit talk

outside of just and

seasonality

account

that of videos of
right

And
per month. millions

then

YouTube
last

you talked
heard

little

about about
to

it

earlier

you
talking

said

that

you were
it

monetizing
talking

billions

The

time so are

you guys

it

you were
and

about

you were
are the

about ad

hundreds formats

of videos

we

comparing

apples

apples

guess

lastly

what

most popular

now
JONATHAN
quarterly factor

ROSENBERG
so
really

Sure
say

Youssef. with

Let

me

start to

with

the

first

question. or

We

generally

trends

cant

anything
the really

respect timing

how

June

was

wasnt

different.

The only

dont parse intra anomalous

in this

quarter
it

think
in

was
but

really

general have

of Easter versus
else that

in the offer. that

previous think

and

this to

year say

was

Q2

dont

anything
in the

can

believe in Q1 year it was what said was that or what
billions

meant
month.

was

that

monetizable

views

have

tripled

last

year and

we

are

monetizing

of views

every

Nikesh
the

may
pages

be

able

to

give

you

sense ad

from

an

advertiser

perspective videos and from page

across
the

the

home

page

the

watch page
videos

and

search

where we have
on
the results certainly

different

formats
is

featured
getting in the

video

promotion
in

promoted
of what have

which most

we

are

doing
in.

pages
seen

which he
lot

feedback

customers

terms

they are

the

interested

have

of interest

home

mastheads

which

we

been

introducing

recently.

Nikesh

NI
established

do

you have

any

other feedback

from

the

customers
to

ARORA
advertiser significant

think

Jonathan

just that

to

add

what you said homepage
is

yes we

are

begiiming and
is

to

see

that for

YouTube
customers.
for sale.

has So

in the

space now
sell-through
in

the

YouTube

of relevance

desirable

we

are

seeing

most of our major
lots

markets where we have
advertising
like

YouTube
is

homepage

In addition
short clips that

we we

are are

begiiming begiiming

to to

see

of interest

in pre-roll

which and

what customers
deal

want
recently

on

the

acquire

from

our major

partners

Disney

the

we

did

with

Page
Event Brief of

Q2 2009

Google Earnings

Conference

Call

Final

FD Fair Disclosure

Wire

July

16

2009

Thursday

142-0007 so think
in the the

next phase of doing That

of YouTube various

is

going

to

be

towards

pre-roll

videos
in the

on
past.

short

clips

and

long-form

video

which

are

process

deals

which

we

have

aimounced

YOUSSEF
PATRICK

SQUALl
PICHETTE

is

helpful.

Thanks.

Thank
take

you

for

the

question.

Lets

go

to

the

next question from Barclays
the

please.

OPERATOR

We

will

our next question

from

Doug

Anmuth
Thanks
think

Capital.

DOUG
mentioned
search

ANtvIUTH
display

ANALYST BARCLAYS CAPITAL
was
the the

for

taking
is

question.

Eric

you

recently

that

next billion
years.

dollars Is there

business anything

and

this that

sort

of
led

change you
to sort

because of make
at this

think
this

you

said

basically

over
sort

last

couple about

in particular

has

change
from
the

beyond

what you

of talked and

around

YouTube
the

here

How

do

you think

you

are

benefiting
that
fits

point

DoubleClick Thanks.

acquisition

also

curious

about

Google Exchange

rollout and

how

into

your

strategy

NI
One
is

ERIC

SCHM
ARORA
on
see the

Nilcesh has really

been

driving that
the just to to

area.

Nikesh
about
in the

why dont you summarize where we are
display
for

Thank

you
side

Eric.

think

way
talked couple

think

us

is

actually

in

multiple strands.

clearly to

YouTube

which
in.

you
think

about that

terms second
it

of homepage area of focus
well.

and
for

pre-roll

ads which Google

we

are

begiiming

some good
again
sort see

trajectory that the

us

is

the

content

network
There of the search because

where we
has been

revenues

are

doing

well

and

is

performing

of an
started

aversion going

to

more performance-based
to

display
clicks.

advertising

in are

the

last

quarter
sort

because

most
to

advertisers to

have

back
are to

focusing
shift

on CPC away
are

and

Where
to

we

bringing

of the

metrics

display display

effectively inventory

and we

seeing

back

from
to

CPM

more CPC
to

on

the

content
that.

network

continues

rise and people

begiiming

want metrics
tremendous

measure

On we
have

the

third as
integrated

you asked
that
the

the

DoubleClick

integration

we

have

made
and

progress to the and

Ad Exchange
traction across
the
is

now
both
shift

DoubleClick
all

Exchange work
think with Eric

with an
is

AdWords
that that

AdSense

we

are

seeing

where

publishers

advertisers
parties

agencies
in the are

want

to

exchange
right that

allows
is

us to expose area where

inventory
the online

board
going

to to

transaction. to see

So

the

next and

advertising
all

and

we

going

tremendous

growth

in the

display

space

we

are

exited

about

three

areas

individually.

DOUG

ANtvITJTH

Thank

you.

PATRICK

PICHETTE And we

Thanks
will

Nikesh
our next

for the

answer. from

So

we

will

go back
from

to

the

next question
Suisse.

please.

OPERATOR SPENCER
wondering
rolled that
if

take

question

Spencer

Wang

Credit

WANG ANALYST
could
talk

CREDIT
bit

STJISSE
the

Thanks.

Good

afternoon.

Just

two quick
the results

questions.

was
since

you guys

little

about

new

trademark

policy

and

what

have

been

you

out since

mid-June
follow-up again

And
trajectory

then

just
is
it

on

the

YouTube
the

now
some

just

function

of increasing
rates

When you guys talk about YouTube question. number of monetized views Or can you talk
and

being
little

on
bit

better

about you.

maybe

of the

click-through

on

the

ad

formats Jonathan.

what you
handle and

are

seeing

now

versus

previously

Thank

JONATHAN
first.

ROSENBERG
implemented
that

Sure.

This

is

will

the

specific
it

question
just

on

the to

trademark
the

change policy

believe

we

around

the so

middle

of June can

basically

is

an

update ad

trademark
if

in the

US

for or

Google.com
information

AFS
site

and
for

AFC
the

that

advertisers the

use trademark

terms

in their

creatives

they are

resellers

an

product

with

trademark.

And
you
can

generally
certainly

we
try

are

seeing

significant

interest

in

that.

dont have

any
it

specific
is

revenue
used.

numbers

to

offer

you

but

some ads yourself
side

and

get

sense

of

how

frequently

being

On

the

YouTube

Nikesh

do

you have
trajectory

some comments
has effectively
selling

ARORA
formats.

Yes YouTube
into the selling to

been

about

an

ability

to

scale.

We
we
are

have have

introduced

ad

We
sort

have

gotten

process

cycle of agencies
sell-throughs

and advertisers The reason

and

been

able

to
it

go
is

out and

of create

our sales

force

go

and

make

these

happen.

we

excited

about

Page
Event Brief of

Q2 2009

Google Earnings

Conference

Call

Final

FD Fair Disclosure

Wire

July

16

2009

Thursday

142-0008

we

have

finally

got

all

the

pieces

in place.

The agencies

are

getting

into

the

selling

process

and

the

buying

process

and

getting

our teams

ready.

Secondly

on Youlube we The promoted

are

also

now

getting

excited can

about

the

pre-roll

stuff

because so

we we
with
the

are

begiiming
shift fact

to

bring

more

content.

videos

idea where we content
pre-roll

promote

partner

content

upfront couple
the scale

can
the

more and
our teams
that

more
are to

user views

towards
selling

more premium
advertising as

allows
to

us to create

more inventory
that creates

that

now
drive

out there
this

various

advertisers

and

breadth

we need

forward.

JONATHAN

ROSENBERG
Sure. to

And Nikesh
pre-rolls
if

what has been you look on
the

the

impact

on

the

user experience
at

from

pre-rolls accepting of

ARORA
that

The

web
going
for
it

if

you look
have
to

premium
it is

content

users are

when

they

are

going
or are

watch

premium

content
to

they are
to

to at

see

supported
It is

either

by some form
accepted going user
to

advertising

funding
that
if

perhaps going
to

they are
to

going content

have

pay

some point

in time.

becoming
it

behavior

they There

watch

where people
around do

have
this

invested
area.

money

in creating

they are

watch

pre-roll.

seems

be

general This
are

acceptance

JONATHAN
there
is

ROSENBERG
drop-off
so

is

Jonathan.

We

look carefully
there.

at the

drop-off

rates

with

the

pre-roll

and

very

little

we

generally

pretty

optimistic

SPENCER
PATRICK

WANG

Thank

you. you. Lets our next

PICHETTE And we

Thank
will

go

to

the

next question from

please.

OPERATOR
JEFFREY
YouTube
and

take

question

Jeffrey

Lindsey

from

Sanford

Bernstein.

LINDSAY
the increase

ANALYST SANFORD
in the

BERNSTEIN
is

CO. Thank
actually

you. Could

ask given

the

changes
or
is it

in

amount
do
free

of advertising intend
to

YouTube

profitable

on

contribution

basis
for

net negative charge
for it

And

then
it

secondly be given

you
as

make

any money

from
will

the

operating

system Will you
you.

example

or will

part

of Google

Apps How
we dont

that

work

Thank

PATRICK
that

PICHETTE
pleased
to

Right.

So on
trajectory

the

first

one

give the
really

economics pleased both

of YouTube.
in

What
its

can

tell

you

is

we
is

are

really

with

the

of YouTube.

We

are

terms
see

of

revenue

growth
and
let

which
business answer.

really for us.

material

YouTube

and

in the

not too long distance
really

future
the

we

actually

very profitable

good

So from

that

perspective

we

are

pleased

with

trajectory.

On

the

second

one

will

Eric

ERIC SCHMIDT
Source read
the

Yes on
may be
will

the

Chrome ways
said in this

OS

because

it

is

Open

Source
from
it

we

do

not plan to core be

charge

for

it

in
if

an

Open

forum.

There

other see

which
is

we make money
Open
Source

but the
will

operating
for

system
anyone

you go and
use.

blog post

you

we

an

project

which
the cost

available

to

JEFFREY
opportunity
for

LINDSAY
you
to

So that any

means

that

even it

though

you incur

of doing

the

development

there

is

no

make Well

money

with

ERIC SCHMIDT
there are

first

remember
that

we

do

this

with

lot

of products
the

so for argument

example
is

our Android product

many
because

other pieces

of tecimology
to

Google builds
use the
or internet

and
in

rough

that

we

do

things that

are as

strategic

they get people

ultimately search

clever

and

new

use the

internet in

more

they ultimately strong and each and

more

watch more on YouTube

way more and we know and we then know that our

that

they

advertising

works

particularly

targeted

way.
to

So we do not
strategic

require are

every
the

project better

be

completely

profitable the

or

not profitable.
better

We

look

at

them

in

context

they making
especially

web

place.

And by making
we
have
lot offer.

web
that

place
that

by

getting

more and
in

more people

online

on broadband us because Great thank Thanks
will

coimections targeted

of data

says

ultimately

results

very

strong revenue

growth

from

of the

ads that

we

JEFFREY PATRICK

LINDSAY
PICHETTE And we

you. Lets
to the

Eric.

go

next question

please.

OPERATOR
JEETIL

take

our next

question

from

Jeetil

Patel

Deutsche

Securities.

PATEL ANALYST DEUTSCHE
fees and
if

BANK
not but

Great

thank

you.

couple

of questions.

When

you look

at

OEM

licensing

that

makes

sense

or

am

just

broadly

what

is

your view

on consumer paid services

Page
Event Brief of

Q2 2009

Google Earnings

Conference

Call

Final

FD Fair Disclosure

Wire

July

16

2009

Thursday

142-0009
if

that

makes
of

sense

in

terms

of leveraging

your
it

audience be your

and

the

lariat

of services
other

that

you

offer

today

to

go

after in

somewhat Chrome

consumer pay model
over

whether

own

products

or

products

say ISVs

participating

OS

time
question back around budgets
until in the the

And
they
the are

then

second
holding trend that

of late seasonal

as

you

talk

to

marketers

and

advertisers and

are

perhaps

budgets have seen

strength

of August

September

onward

you hearing that which is typical

of

seasonality

we

past
question
to
if

ERIC SCHMIDT
the for If
it

So on the
will

first

part

of the

our platform

strategy

works
that

and

if

there

are

many
is

users of
true

Chrome
all

OS

there

be

many

opportunities over
the

build profitable of computing.
right

services

on top of
they
are

platform. to

That
if
it

has been
successful.

of the

successful

platform
it

plays

history

And now
see

likely

be

large

is

not successful

then

doesnt
the

really existing

matter.

So our focus
systems

is

on building
broadly

truly that

new

experience peoples
lives

something day-to-day

very different basis
in the

from

operating

and

then

how

can

touch

on

new

model
it

of cloud

computing.

As another
subscription of course services

general

statement
that

is

certainly

my

belief

that

you web

will will

see

duality

between
successful and

advertising advertising

and

services
is

and

eventually
or

monetization
leaders

in the

have

very

model
subscription

which

Google which
that

the

leader

one

of the

in
so

and

also

fair

number

of strong

successful

include

micropayment
has yet to
or like

systems and
be built for
in

forth

and

so on.

And
either

infrastructure

my
that

view

broadly.

But

it

makes

sense

that

ultimately content form
first

will

be

advertising

supported
things

charged

and

content and
so

here
on.

includes

content
that

in the

of movies
half

and videos
question.

and

so forth

but also

software

and

so forth

With

that

ends

the

of the

Go

ahead.

JONATHAN
JEETIL

ROSENBERG
Yes.

think

the

second

half was just

about

advertiser

budgets.

PATEL

JONATHAN
from
the

ROSENBERG
The one thing So they
if

guess

Nikesh
like

advertisers. daily

would
always has

out their
the right

budgets.
to

will

from what he is actually maybe give you perspective hearing remind you there though is most of our advertisers are not maxing take more clicks if we can give them to them. So in many ways that is not can
to

question

ask but

Nikesh

specific

views

of what

he

is

hearing

from

the

advertiser

community

that

might

NI
is

be helpful.

ARORA
convincing
so

think

Jonathan
that

you
is

are

right.

Effectively

what we have
and

been

spending
inventory.

our time with Inventory

the

advertisers

them

search

an

ROT-based
us to open

media up
their that to

we

cant

create
it

depends
set

on

consumer behavior
vigorous
their day.

they have

worked

with so

budgets they will

and put buy

out there
at as

what they
price

very

ROT benchmarks
open
with

on

their

bidding

we

understand allows

click

certain
is

but they keep
that particular

budgets

us for the

most part

which

them

buy

as

much

inventory

created

on

JEETIL model
from

PATEL
kind of

Eric

quick

follow-up
as

on

that

ads versus

subscriptions.

Do you

think

that

there

is

business

royalty standpoint

ISVs build out apps
question.

on top of Google

Chrome

OS

JONATHAN
JEETIL

ROSENBERG
Okay.

Again

too specific

PATEL

JONATHAN
applications experimenting

ROSENBERG
Exactly ads inside

We
how

dont know

yet.

It

makes

perfect

sense

that

there

will

be

new
people

forms

of
are trying

distribution.

they get monetized probably There about
is

multiple ways. subscription

There

are

who
are for

with

of applications.
is

obviously
for

the

model

which
really

others

and
or

we

will

know.

The good

news

we

can

talk

this

long time because more.

we dont

know

year

two.

JEETIL

PATEL

Okay.

Looking

forward

to

hearing
to

about

it

PATRICK

PICHETTE And we

Great thank
will

you. Lets

go

the

next question

please.

OPERATOR HEATH
question

take

our next

question

from

Heath Terry

from

FBR

Capital

Markets.

TERRY

ANALYST FRIEDMAN
that

BILLINGS
used

RAIvISEY Great
tripled

thanks.

Not

to

overask

the

YouTube
sense of what

but you mentioned

YouTube

monetized

have

year-over-year.

Can you give us

Page
Event Brief of

10

Q2 2009

Google Earnings

Conference

Call

Final

FD Fair Disclosure

Wire

July

16

2009

Thursday

142-00 portion
rest that
is

10

currently

and can

you

talk

about

the

challenges

to

monetizing

the

non-partner

inventory

that

make

up

the

of those

views

JONATHAN HEATH
there
is

ROSENBERG
You

guess
that

dont understand YouTube

the

question views
if

with

respect to

percentage.

TERRY
but what

mentioned
are

had monetized was
just

had

tripled

year-over-year us sense
as to

am assuming maybe
not exact

portion

of those
that

that

non-monetized. looks like

curious

you could

give

percentages

portion

ERIC SCHMIDT
YouTube
people every
are

In general

we havent
content.

sort

of dissected
are
is

all

of the

numbers within
because accepting

YouTube.
that
is

The majority of
majority of what
15

views

are

not professional
It is

They
of what

user-generated submitted. gives

content
is

the

watching.

also
is

the

majority

YouTube
testament

more than

hours

of video

minute

here and

that

only

increasing of being

which
able to

you
the

of the

power
side

of YouTube.

HEATH

TERRY

And
It

in

terms

monetize

non-professional
to

of that

inventory matter
target
it is

ERIC SCHMIDT
majority There
is

has not been content

our focus. has

It

is

probably

possible

do

so but
It

the
is

fact

of the
to

that

the

of the too

non-professional
variation

relatively the

small number professional

of viewers.

difficult

accurately.

much

and

so forth

whereas

here and

remember

professional

here

just

doesnt

mean
It

big

studios.

also

means
from

smaller

studios

new
one.

entrants
It is

startups

who

are

professional can
tell

quality

quality

video

user-generated

easy

enough.

You

the

difference

and you can tell between the two.

professional

HEATH
PATRICK
questions.

TERRY

Okay

great.

Thanks.

PICHETTE

Thank

you. Lets

go

to

the

next question

please.

Probably

have

time

for

one

or

two more

OPERATOR
STEVE
few mix
quarters issues

Thank

you.

We

will

take

our next question

from

Steve

Weinstein

from

Pacific

Crest.

WEINSTEIN the TAC as
and seasonal and percent content

ANALYST
percentage
that to

PACIFIC CREST
the

SECURITIES
has been

Great

thank

you.

It

looks

like there are see

over
are

the
all

last

network
that.

partners

declining.

And

understand
that

sorts

of

issues

go

into
if

But

am wondering
of spread
that

given trend

the

momentum
if

you
to

seeing

behind

AdSense
being

for

display of the

ads

when

we

kind

out

we

can

continue

downward

TAC

paid out as

network.

PATRICK
relative to last

PICHETTE
year
there

So

will

answer massive

that.

Look
in

there

are

lot are

of mix issues
clearly

with
issues.

TAC.
So

When
on
the

arent these
if

swings

TAC.

There

mix

you look at AdSense and
partners
it

it

partner

networks
the

right obviously
that

you have

mix with

more of your smaller

partners

than

your

larger

will

influence

mix

way.

Clearly with people
to
is

Google
to

TAC

it

is

not

big

change
So there
to

but
is

it

reflects really basis

the

fact

that

we
shift

have
in

more partner way
shape

deals or

to

bring

Chrome
just the

bring

people

to

Toolbar.

no

big
just

tectonic at

any

form but what

you

see

effects

of these

mix on Thank

quarter

quarter

work.

STEVE

WEINSTEIN
PICHETTE And we

Okay.

you.

PATRICK

Thank
will

you.

We

will

take

one

more question
Jim Friedland

please.

OPERATOR

take

our final

question

from

from

Cowen

Company. Apps
to

FRIEDLAND
Two
to parts to that as
it.

ANALYST COWEN AND
$50 per user per
also offer are

CO.

Thanks.

Question
is

on Google view

on add

the

Enterprise

edition.

First you charge but could
to

year.

Over time
features
to so

there

not only

services

and continue

charge

level
talk

you

premium
the

that

you generate
that

more revenues hearing
Thanks.

per customer

And

second

you

enterprises

what

key

barriers

adoption

you

are

ERIC SCHMIDT
opportunity current
to

At

the

moment

of

course

we

are

very happy
time.

with have

the

$50

year model.
full just

We
sort

obviously of pursuing per product

have
the

the

put in additional think
at the

value-added

services

over

We

got our hands
to

opportunity.

over
to

time you can
entry in that

expect

we would
are

broaden

some
easy

of those
to

ideas

on

basis.

When

you

look

barriers

market they

actually

pretty

understand.

The customer them some
time to

has

large or

and

existing the

investment
that

in infrastructure

which new

is

relatively

highly computing.

specialized.

It

takes
is

convert

adapt

systems

they have

to

use the

web-based

This of course

Page
Event Brief of

11

Q2 2009

Google Earnings

Conference

Call

Final

FD Fair Disclosure

Wire

July

16

2009

Thursday

142-0011
the that

fundamental
the

narrative

of these
to

product
the

transitions transition.

and

that

is

why

they take

so

many

years to go

through.

It

is

not

customers

dont want
that there
is

make

The
category

issue

is

some feature
often
security

or

some unique
are

thing

that

they depend
specialized. that

on.

Examples
Access
to to

would
specific

be

in the

of security
significant

services

systems

relatively

highly systems

and often
access
to.

historically

but currently

not very

significant

database

they

still

need

have

Other

kinds

of things

which

are

just

tactical.

In other words

they just be

require that

some

amount of work
will

and over

time

we

will

knock

down some
for

of those

issues

some of those
ones.

would

conversions

people an

do

et

cetera
product.

et cetera.

We

focused

example

on

the

most common
in particular are

Outlook we have
Enterprise

now

launched

Outlook have

sync

The use of BlackBerries
support
that as part

and Those

the the

BlackBerry ones
that

Server. able to

We now
knock

very good
in the

BlackBerry

of our Apps.
priority

two of
are

we

have

been

down

past few

months

have

been high

but there

certainly

more.

JIM

FRIEDLAND

Great thank Thank
to

you. you. With this
are

PATRICK
listen to

PICHETTE
today. Just

we

will

close

the

call.

Let

me

thank

everybody
in

for

taking

the

time

to

our call

summarize

we

very

pleased

of

very good

quarter

what

is

stabilizing

but

difficult

economic would
So

environment.

also listening.

like

to

thank

Googlers be
able

for to

their talk will to
let

incredible

contribution people
close that the

in

Q2.

What

great progress
the

and thank
in

you

for

Jonathan

and

will

you
the

for the

go follow
please.

second

call

about

half an

hours

time.

Thanks

again

and

with

that

operator

call

OPERATOR

Thank

you.

And

this

concludes

todays

conference.

We

thank

you

for

your

participation.

Financial without obligation
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