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`
`EXHIBIT 2065
`Face book, Inc. et at.
`v.
`Software Rights Archive, LLC
`CASE IPR2013-00479
`
`
`
`Chief Financial Officer
`George Reyes
`
`Welcome
`
`
`
`Last Shuttle to Parking Lot
`Product Demos
`Closing Remarks
`Executive Panel
`George Reyes
`Financial Review
`Lunch
`OmidKordestani
`Sales Panel
`Jonathan Rosenberg
`Product / Technology Panel
`Eric Schmidt
`Opening Remarks
`George Reyes
`Welcome
`
`3
`
`4:00pm
`2:05pm
`2:00pm
`1:20pm
`
`12:50pm
`12:10pm
`
`11:25am
`
`10:25am
`
`10:05am
`
`10:00am
`
`Agenda
`
`
`
`4
`
`•Disciplined investments for the long term health
`•Extraordinary growth and profitability track record
`
`of the business
`
`•Deep pipeline of new products and monetization
`•World class talent
`•Powerful, self-reinforcing business model
`•Largest single source for the world’s information
`
`opportunities
`
`The Google Story
`
`
`
`i88>35224.53.o00
`
`Analyst Day 2006.
`
`
`
`
`
`Chief Executive Officer
`Dr. Eric Schmidt
`
`Opening Remarks
`
`
`
`coszLEE
`
`6320
`
`3030i
`
`82>meucm
`
`7
`
`7
`
`
`
`8
`
`How We Think About Big Problems
`
`
`
`$0
`
`$1
`
`$2
`
`$3
`
`$4
`
`2005
`
`2004
`
`2003
`
`$0.41
`
`$0.45
`
`2002
`
`$440M
`
`$1.46
`
`$1,466M
`
`$3,189M
`
`EPS (diluted)
`Revenue
`
`$5
`
`$5.02
`
`$6
`
`(diluted)
`EPS
`
`$6,139M
`
`9
`
`$0
`
`$1,000
`
`$2,000
`
`$3,000
`
`$4,000
`
`$5,000
`
`$6,000
`
`$7,000
`
`($ Millions)
`Revenue
`
`Key Accomplishments –Financial Growth
`
`
`
`10
`
`Key Accomplishments –Progress & Leadership
`
`
`
`11
`
`5. Building the systems and infrastructure of a global
`
`$100B company
`
`4. Growing our overall partnerships
`
`3. Building new products and services for publishers
`
`of information
`
`2. Quality of advertisements as perceived by end users
`
`1. Search quality and end user traffic
`
`2006 Strategic Priorities
`
`
`
`flmooo
`
`12
`
`
`
`:Emmmumucméq
`
`mackmm:E3
`
`mmEEEmE
`
`
`
`
`
`220EgmmmmEan;
`
`
`
`macawmoomfi
`
`
`
`Lead in Search
`
`cohmmmE984
`
`
`
`
`13
`
`•Encourage our large user base to actively
`•Guide users to help them search better
`
`search results
`contribute metadata that leads to better
`
`•Provide unified search experience by integrating
`
`and ranking solutions
`multiple verticals and data sources through UI
`
`Drive Search Innovation
`
`Lead in Search
`
`
`
`14
`
`More Complete Ads System
`
`
`
`15
`
`15
`
`
`
`16
`
`Radio, TV, and Direct Mail
`AdSense
`•Expand offerings to Print,
`branding product
`•Develop a great
`•Simplify the experience
`
`23%
`Other
`
`Radio, TV, and Direct Mail
`AdSense
`•Expand offerings to Print,
`branding product
`•Develop a great
`•Simplify the experience
`
`23%
`Other
`
`Deeper –Existing Customers
`
`Wider –New Customer Types
`
`Provide a More Complete Ads System
`
`
`
`17 E
`
`SE-E
`
`17
`
`1%EEE@
`
`
`
`$53.0B
`Other
`
`$11.3B
`Internet
`
`$14.5B
`YP
`
`$21.0B
`Radio
`
`Broadcast TV
`
`$46.7B
`
`Newspapers
`
`$49.6B
`
`$57.2B
`Direct Mail
`
`18
`
`$13.0B
`Mags
`
`$16.7B
`Cable TV
`
`$283B
`
`Solving Big Problems
`
`
`
`19
`
`Personalization
`Transparent
`
`Store 100%
`
`Speed
`
`Consumer Products and Services
`
`
`
`BmooU
`
`20
`
`
`
`
`
`mm<>>._.n_om‘..mm<>>om<1
`
`
`
`
`
`mmuSmm—mJan—mm:m._.._:wm_mIum<mmxmn_2_
`
`
`
`
`
`32>OO
`
`./[I‘...
`
`._.Z<>m_._mm._.wO_>__m>_wzm_._mmn=>_oo
`
`
`Google Evolution
`
`co::_o>m_@6000
`
`
`
`
`21
`
`•TV
`
`•PC
`
`•Mobile
`
`Via devices
`
`In allcountries
`In alllanguages
`
`Viapartners
`
`Build the Biggest Footprint
`
`
`
`22
`
`Addressing the Key Issues
`
`
`
`8585two;
`
`85%can88:mmzcSo8.3923$2.25
`28m
`
`meow
`
`55%3:98Ecztoaao
`
`E393m2Ems—EE8:58
`
`25m
`
`9302593
`
`#832:25m
`
`mLthomwE558
`
`
`
`29522Bammfior:
`
`
`
`BmEEooaEemumflEmsofim839m558mm.90E
`
`
`
`
`
`
`
`
`24
`
`Google Inc.
`CEO
`Eric Schmidt
`
`Thank You!
`
`
`
`i88>35224.53.o00
`
`Analyst Day 2006.
`
`
`
`
`
`SVP, Product Management
`Jonathan Rosenberg
`
`Philosophy and Strategy
`Google Product
`
`
`
`27
`
`the results of any revision to these forward-looking statements.
`implied in the forward-looking statements. We undertake no obligation to revise or publicly release
`may not occur, and actual results could differ materially and adversely from those anticipated or
`In light of these risks and uncertainties, the forward-looking statements included in this presentation
`
`•
`
`Network members.
`our ability to successfully innovate and provide new products and services to our users, advertisers and Google
`our expectations regarding revenue growth rates and operating margins, and
`traditional media companies,
`competition that we face from web search providers, Internet advertising companies, destination web sites and
`
`–
`
`–
`
`–
`
`of our most recent 10-K and 10-Q filed with the SEC, including:
`factors that could cause or contribute to such differences are described in the “Risk Factors”section
`actual results to differ materially from those reflected in the forward-looking statements. Many of the
`•These forward-looking statements are subject to certain risks and uncertainties that could cause our
`
`the Internet advertising market.
`our plans and objectives for future operations, and our expectations regarding the future growth of
`looking statements include statements regarding our future financial position and business strategy,
`the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-
`•The following presentation includes forward-looking statements within the meaning of Section 27A of
`
`A Note From Our Lawyers
`
`
`
`2828
`
`
`
`29
`
`•Zurich, Switzerland
`•Waterloo, Canada
`•Trondheim, Norway
`•Tokyo, Japan
`•Munich, Germany
`•London, U.K.
`•Hyderabad, India
`•Belo Horizonte, Brazil
`•Beijing, China
`•Bangalore, India
`
`•Santa Monica, CA
`•New York, NY
`•Pittsburgh, PA
`•Phoenix, AZ
`•Kirkland, WA
`•Mountain View, CA
`
`= Engineering and PM offices
`
`Google Product Development Around The World
`
`
`
`30
`
`Distribution?
`
`Factor?
`Form
`
`Materials?
`
`Raw
`
`Economics?
`
`Traditional Constraints
`
`Traditional Approach To Products
`
`
`
`•You don’t need to be at your
`
`desk to need an answer
`
`information out there
`•There’s always more
`•Fast is better than slow
`
`•You can make money without
`
`being evil
`
`•Focus on the user and the
`Our Approach To Problems
`
`revenues will follow
`
`31
`
`•Monetization
`•Bandwidth
`•Storage
`•CPU power
`Initially ignore:
`
`Philosophy: No constraints
`
`Our Approach To Products
`
`
`
`flmooU
`
`32
`
`
`
`Common Thread? Scale.
`
`
`
`.mfiomwvmmtt.coEEoo
`
`
`
`Search
`Mobile
`
`WiFi
`
`Search
`Desktop
`
`Pack
`
`AdSense
`
`Search
`Book
`
`Reader
`
`Enterprise
`
`Movies
`
`Search
`Local
`
`33
`
`Ads
`Search
`
`Core 70%
`
`Earth
`
`Orkut
`
`Gmail
`
`Suggest
`
`
`Talk
`
`20%
`
`10%
`
`Video
`
`AdSense
`
`Offline
`
`Code
`
`70-20-10 Product Framework
`
`
`
`34
`
`Continual Focus: Core Search Examples
`
`
`
`35
`
`Click
`
`Revenue
`
`*
`
`Ads
`Clicks
`
`*
`
`Query
`Ads
`
`*
`
`User
`Queries
`
`*
`
`Users
`
`Revenue=
`
`Continual Focus: Ads Examples and Insights
`
`
`
`Advertising
`Targeted
`
`36
`
`Ads In Google Earth
`
`
`
`37
`
`37
`
`Advertising
`Targeted
`
`Ads In Local Search
`
`
`
`38
`
`A Fresh Approach To Offline Ads
`
`
`
`39
`
`–Engineering
`
`•Jeff Huber
`
`–Product Management
`
`•Marissa Mayer
`–Engineering
`•Alan Eustace
`
`–Engineering, China
`
`•Kai-Fu Lee
`
`–Product Management
`
`•Jonathan Rosenberg
`
`Product and Technology Panel
`
`
`
`i88>35224.53.o00
`
`Analyst Day 2006.
`
`
`
`
`
`Business Development
`SVP, Global Sales &
`Omid Kordestani
`
`Partnership Strategy
`Google Global Sales and
`
`
`
`42
`
`the results of any revision to these forward-looking statements.
`implied in the forward-looking statements. We undertake no obligation to revise or publicly release
`may not occur, and actual results could differ materially and adversely from those anticipated or
`In light of these risks and uncertainties, the forward-looking statements included in this presentation
`
`•
`
`Network members.
`our ability to successfully innovate and provide new products and services to our users, advertisers and Google
`our expectations regarding revenue growth rates and operating margins, and
`traditional media companies,
`competition that we face from web search providers, Internet advertising companies, destination web sites and
`
`–
`
`–
`
`–
`
`of our most recent 10-K and 10-Q filed with the SEC, including:
`factors that could cause or contribute to such differences are described in the “Risk Factors”section
`actual results to differ materially from those reflected in the forward-looking statements. Many of the
`•These forward-looking statements are subject to certain risks and uncertainties that could cause our
`
`the Internet advertising market.
`our plans and objectives for future operations, and our expectations regarding the future growth of
`looking statements include statements regarding our future financial position and business strategy,
`the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-
`•The following presentation includes forward-looking statements within the meaning of Section 27A of
`
`A Note From Our Lawyers
`
`
`
`43
`
`Partners
`
`Customers
`
`Users
`
`Our Focus
`
`
`
`73%
`113%
`2005
`
`147%
`101%
`2004
`
`505%
`158%
`2003
`
`Google Sites
`Partner Network
`
`44
`
`Annual Growth
`
`2002
`
`$
`
`$500
`
`$1,000
`
`$1,500
`
`$2,000
`
`$2,500
`
`$3,000
`
`$3,500
`
`$4,000
`
`Ad Revenue ($ millions)
`
`Ad Sales by Property
`
`
`
`Advertisers
`
`Online Media
`
`Serving all of our customers
`
`AdWords
`
`45
`
`Revenue/Advertiser
`
`
`
`Advertisers
`
`46
`
`Revenue/Advertiser
`
`Serving all of our customers
`
`Marketers
`Traditional
`
`AdWords
`
`
`
`Advertisers
`
`47
`
`Revenue/Advertiser
`
`SMB
`
`Serving all of our customers
`
`AdWords
`
`
`
`Source: TNS-MI; 2005 and 2003 US online display advertising, excludes companies with online spend less than $400K in 2003
`
`48
`
`616%
`
`+2,113%
`
`Travel
`
`Financial
`
`F1000 growth in online spend occurred in
`
`diverse range of verticals, including:
`
`•Average ’05 online spend: $28.4MM
`•Average ’03 online spend: $8.5MM
`
`Industry growth in online spend is
`
`real and significant
`
`103%
`129%
`146%
`150%
`180%
`188%
`196%
`198%
`198%
`255%
`314%
`342%
`480%
`482%
`549%
`585%
`616%
`802%
`1,105%
`1,209%
`1,465%
`2,113%
`
`Walt Disney
`Staples
`General Motors
`Proctor & Gamble
`Ford Motor
`UPS
`Knight-Ridder
`Intel
`Bellsouth
`CVS
`Cablevision Systems
`Verizon
`Clorox
`Delta Airlines
`Eli Lilly
`Wachovia
`Starwood Hotels & Resorts
`Continental Airlines
`McDonalds
`Allergan
`General Mills
`Capital One Financial
`
`Top Online Spend Growth
`
`2003 to 2005
`Fortune 1000
`
`Traditional Marketers
`
`
`
`AdAge, January 6, 2006
`
`30% this year.”
`increase their online advertising budgets by
`Fortune 500 companies said they plan to
`“Nearly half of the chief marketing officers at
`
`
`
`50
`
`Automotive
`
`Healthcare
`
`Telecom
`
`Business
`Technology
`
`Retail
`
`Consumer
`Technology
`
`Platform
`AdWords
`
`Services
`Business
`
`Packaged
`Consumer
`
`Goods
`
`Markets
`Local
`
`Finance
`
`Entertainment
`
`Travel
`
`Vertical sales strategy
`
`Traditional Marketers
`
`
`
`Yellow Pages Integrated Media Association. Fortune magazine listof America’s largest (revenue) 1000 companies. April 18, 2005 issue.
`Source: Advertising Age 100 leading national advertisers, June 27, 2005. Measured Media from TNS Media Intelligence/CMR'sStrategy and
`
`51
`
`Google Advertisers in Fortune 1000
`
`300
`
`Google Advertisers in AdAge100
`
`Growth
`
`Traditional Marketers
`
`Q4 ‘05
`
`Q4 ‘04
`
`Q4 ‘03
`
`156
`
`227
`
`263
`
`0
`
`50
`
`100
`
`150
`
`200
`
`250
`
`Q4 ‘03Q4 ‘04Q4 ‘05
`
`66
`
`88
`
`79
`
`0
`
`10
`20
`30
`40
`50
`60
`70
`80
`90
`100
`
`
`
`Brands
`
`Worthington
`
`Registry
`Gifts &
`Holiday
`
`Toys
`
`Girl's Room
`
`FurnishingsHousewares
`
`Electrics
`Small
`
`Home
`Furniture
`
`Stafford
`
`Wedding
`
`Boy's Room
`
`Tablewear
`
`Home Décor
`
`Curtains &
`Shades
`Blinds &
`
`Window
`Drapes
`
`Bali
`
`Olga
`
`MUDD
`
`Under $30
`
`Figures
`Action
`
`CookwareVideo GamesUnder $50
`Wellness
`Health &
`Storage
`
`Under $40
`
`Collectibles
`
`Lighting
`
`Kids & Teens
`
`Kids Rooms
`
`Made to orderMattresses
`Treatments
`
`Top
`
`Carters
`
`AppliancesArts & CraftsUnder $20
`
`Rugs
`
`Dockers
`
`New Baby
`
`Dolls
`
`Levi's
`
`Under $100
`
`Games
`
`Tables
`Kitchen
`Furniture
`
`Slipcovers
`
`Storage
`
`Hardware
`
`Doors
`Decks &
`
`Delicates
`
`Graduation
`
`For Girls
`
`Barstools
`
`Luggage
`
`St. John's
`Nicole Miller
`
`Bay
`
`For the home
`
`For Boys
`
`Electronics
`
`Eletronics
`
`Birthday
`
`Learning
`
`Bakeware
`
`Fitness
`
`Music CornerAnniversaryMTC Cribs
`
`Cutlery
`
`Game Room
`
`Collin Cowie
`
`Chris Madden
`
`Arizona Jean
`Okie Dokie
`
`Co.
`
`Booby Jack
`
`Sketchers
`
`Kitchen cartsOutdoor Play
`
`Ride-ons
`
`Pools & Spas
`
`Gadgets
`Kitchen
`
`2004
`
`Teens
`
`Sheets
`
`Kids
`Shop
`
`Campus
`
`20-something
`
`Personalized
`
`Diamonds
`
`boxes
`Jewelry
`Rings
`
`Earrings
`
`Necklaces
`
`Women's
`comfort
`Girls Tops 4-
`Women's
`Girls BottomsMen's dress
`
`Underwear
`
`Socks-
`
`16
`
`Women's
`
`sport
`
`dress
`
`Men's comfort
`
`Boys Tops 4-
`Boys BottomsMen's boots
`
`20
`
`Bracelets
`
`Juniors
`
`Shoes
`
`Bridal
`
`Gold
`
`Sterling Silver
`
`Jewelry
`Fashion
`Men's
`
`Baby Needs
`
`Sleepwear
`Apparel
`Sports
`
`Outerwear
`
`Knit Tops
`
`Sports Fan
`Sweaters
`Fleece-
`
`Apparel
`Sports
`Shop
`
`Sleepwear-
`Big & Tall
`
`Shoes
`Robes
`
`Underwear-
`
`Business
`
`Attire
`
`socks
`
`Dresses &
`Swimwear
`Blouses
`Shirts &
`Juniors
`
`Suits
`
`Fragrance-
`
`spa
`
`Jackets &
`
`Jeans
`Coats
`
`Sleepwear
`
`Bridal Shop
`
`Bed & Bath
`
`Bedding
`Bedding
`Basic
`Bath
`
`Jewelry
`Watches
`Women's
`Watches
`Men's
`
`Men athleticGemstones
`
`Zirconia
`Cubic
`
`Moissanite
`
`Girl's
`
`Boy's
`
`Shoes
`casual
`AccessorriesBaby BeddingWomen's
`Men's casual
`
`Children's
`
`Men's
`
`52
`
`Women's
`
`Furniture
`Baby
`Dress Up
`Uniforms
`School
`Newborn
`
`Shorts
`Capris &
`ActivewearCasual Shirts
`
`AccessoriesDress Shirts
`
`Jeans
`
`Pants
`
`Shoes
`Skirts
`Pants &
`Maternity
`
`Toddler
`
`Young Men's
`
`Lingerie
`
`Furniture
`
`Pearls
`
`Young Men's
`
`Infant
`
`Workwear
`
`Extending Relationships
`
`Traditional Marketers
`
`
`
`Brands
`
`Worthington
`
`Registry
`Gifts &
`Holiday
`
`Toys
`
`Girl's Room
`
`FurnishingsHousewares
`
`Electrics
`Small
`
`Home
`Furniture
`
`Stafford
`
`Wedding
`
`Boy's Room
`
`Tablewear
`
`Home Décor
`
`Curtains &
`Shades
`Blinds &
`
`Window
`Drapes
`
`Bali
`
`Olga
`
`MUDD
`
`Under $30
`
`Figures
`Action
`
`CookwareVideo GamesUnder $50
`Wellness
`Health &
`Storage
`
`Under $40
`
`Collectibles
`
`Lighting
`
`Kids & Teens
`
`Kids Rooms
`
`Made to orderMattresses
`Treatments
`
`Top
`
`Carters
`
`AppliancesArts & CraftsUnder $20
`
`Rugs
`
`Dockers
`
`New Baby
`
`Dolls
`
`Levi's
`
`Under $100
`
`Games
`
`Tables
`Kitchen
`Furniture
`
`Slipcovers
`
`Storage
`
`Hardware
`
`Doors
`Decks &
`
`Delicates
`
`Graduation
`
`For Girls
`
`Barstools
`
`Luggage
`
`St. John's
`Nicole Miller
`
`Bay
`
`For the home
`
`For Boys
`
`Electronics
`
`Eletronics
`
`Birthday
`
`Learning
`
`Bakeware
`
`Fitness
`
`Music CornerAnniversaryMTC Cribs
`
`Cutlery
`
`Game Room
`
`Collin Cowie
`
`Chris Madden
`
`Arizona Jean
`Okie Dokie
`
`Co.
`
`Booby Jack
`
`Sketchers
`
`Kitchen cartsOutdoor Play
`
`Ride-ons
`
`Pools & Spas
`
`Gadgets
`Kitchen
`
`2004
`
`Q1 2005
`
`Teens
`
`Kids
`Shop
`
`Furniture
`
`Pearls
`
`Young Men's
`
`Infant
`
`Workwear
`
`Campus
`
`20-something
`
`Personalized
`
`Diamonds
`
`boxes
`Jewelry
`Rings
`
`Earrings
`
`Necklaces
`
`Women's
`
`sport
`
`dress
`
`Women's
`comfort
`Girls Tops 4-
`Women's
`Girls BottomsMen's dress
`
`Underwear
`
`Socks-
`
`16
`
`Men's comfort
`
`Boys Tops 4-
`Boys BottomsMen's boots
`
`20
`
`Bracelets
`
`Juniors
`
`Shoes
`
`Bridal
`
`Gold
`
`Sterling Silver
`
`Jewelry
`Fashion
`Men's
`
`Baby Needs
`
`Sleepwear
`Apparel
`Sports
`
`Toddler
`
`Young Men's
`
`Lingerie
`
`Extending Relationships
`
`Traditional Marketers
`
`Jeans
`
`Pants
`
`Shoes
`Skirts
`Pants &
`Maternity
`
`Outerwear
`
`Knit Tops
`
`Sports Fan
`Sweaters
`Fleece-
`
`Apparel
`Sports
`Shop
`
`Sleepwear-
`Big & Tall
`
`Shoes
`Robes
`
`Underwear-
`
`Business
`
`Attire
`
`socks
`
`Dresses &
`Swimwear
`Blouses
`Shirts &
`Juniors
`
`Suits
`
`Fragrance-
`
`spa
`
`Jackets &
`
`Jeans
`Coats
`
`Sleepwear
`
`Bridal Shop
`
`Bed & Bath
`
`Bedding
`Bedding
`Basic
`Bath
`
`Jewelry
`Watches
`Women's
`Watches
`Men's
`
`Zirconia
`Cubic
`
`Sheets
`
`Moissanite
`
`Girl's
`
`Boy's
`
`Shoes
`casual
`AccessorriesBaby BeddingWomen's
`Men's casual
`
`Children's
`
`Men's
`
`53
`
`Women's
`
`Shorts
`Capris &
`ActivewearCasual Shirts
`
`Men athleticGemstones
`
`AccessoriesDress Shirts
`
`Furniture
`Baby
`Dress Up
`Uniforms
`School
`Newborn
`
`
`
`Brands
`
`Worthington
`
`Registry
`Gifts &
`Holiday
`
`Toys
`
`Girl's Room
`
`FurnishingsHousewares
`
`Electrics
`Small
`
`Home
`Furniture
`
`Stafford
`
`Wedding
`
`Boy's Room
`
`Tablewear
`
`Home Décor
`
`Curtains &
`Shades
`Blinds &
`
`Window
`Drapes
`
`Bali
`
`Olga
`
`MUDD
`
`CookwareVideo GamesUnder $50
`Wellness
`Health &
`Storage
`
`Under $30
`
`Figures
`Action
`
`Under $40
`
`Collectibles
`
`Lighting
`
`Kids & Teens
`
`Kids Rooms
`
`Made to orderMattresses
`Treatments
`
`Top
`
`Carters
`
`AppliancesArts & CraftsUnder $20
`
`Rugs
`
`Dockers
`
`New Baby
`
`Dolls
`
`Levi's
`
`Under $100
`
`Games
`
`Tables
`Kitchen
`Furniture
`
`Slipcovers
`
`Storage
`
`Hardware
`
`Doors
`Decks &
`
`Delicates
`
`Graduation
`
`For Girls
`
`Barstools
`
`Luggage
`
`St. John's
`Nicole Miller
`
`Bay
`
`For the home
`
`For Boys
`
`Electronics
`
`Eletronics
`
`Birthday
`
`Learning
`
`Bakeware
`
`Fitness
`
`Music CornerAnniversaryMTC Cribs
`
`Cutlery
`
`Game Room
`
`Collin Cowie
`
`Chris Madden
`
`Arizona Jean
`Okie Dokie
`
`Co.
`
`Booby Jack
`
`Sketchers
`
`Kitchen cartsOutdoor Play
`
`Ride-ons
`
`Pools & Spas
`
`Gadgets
`Kitchen
`
`2004
`
`Q1 2005
`
`Present
`
`Teens
`
`Kids
`Shop
`
`Furniture
`
`Pearls
`
`Young Men's
`
`Infant
`
`Workwear
`
`Campus
`
`20-something
`
`Personalized
`
`Diamonds
`
`boxes
`Jewelry
`Rings
`
`Earrings
`
`Necklaces
`
`Women's
`
`sport
`
`dress
`
`Women's
`comfort
`Girls Tops 4-
`Women's
`Girls BottomsMen's dress
`
`Underwear
`
`Socks-
`
`16
`
`Men's comfort
`
`Boys Tops 4-
`Boys BottomsMen's boots
`
`20
`
`Bracelets
`
`Juniors
`
`Shoes
`
`Bridal
`
`Gold
`
`Sterling Silver
`
`Jewelry
`Fashion
`Men's
`
`Baby Needs
`
`Sleepwear
`Apparel
`Sports
`
`Toddler
`
`Young Men's
`
`Lingerie
`
`Extending Relationships
`
`Traditional Marketers
`
`Jeans
`
`Pants
`
`Shoes
`Skirts
`Pants &
`Maternity
`
`Outerwear
`
`Knit Tops
`
`Sports Fan
`Sweaters
`Fleece-
`
`Apparel
`Sports
`Shop
`
`Sleepwear-
`Big & Tall
`
`Shoes
`Robes
`
`Underwear-
`
`Business
`
`Attire
`
`socks
`
`Dresses &
`Swimwear
`Blouses
`Shirts &
`Juniors
`
`Suits
`
`Fragrance-
`
`spa
`
`Jackets &
`
`Jeans
`Coats
`
`Sleepwear
`
`Bridal Shop
`
`Bed & Bath
`
`Bedding
`Bedding
`Basic
`Bath
`
`Jewelry
`Watches
`Women's
`Watches
`Men's
`
`Zirconia
`Cubic
`
`Sheets
`
`Moissanite
`
`Girl's
`
`Boy's
`
`Shoes
`casual
`AccessorriesBaby BeddingWomen's
`Men's casual
`
`Children's
`
`Men's
`
`54
`
`Women's
`
`Shorts
`Capris &
`ActivewearCasual Shirts
`
`Men athleticGemstones
`
`AccessoriesDress Shirts
`
`Furniture
`Baby
`
`Dress Up
`Uniforms
`School
`Newborn
`
`
`
`55
`
`Traditional Marketers
`
`
`
`56
`
`Placeholder for Video
`
`
`
`57
`
`Traditional Marketers
`
`
`
`58
`
`60 hour period
`unique users in a short
`reached millions of
`•Results:Campaign
`
`premium sites
`on 1000s of niche and
`homepage placement
`•Campaign:Prominent
`
`•Goal:Drive traffic to
`
`campaign microsite
`their road to Kona
`
`Ford & Site Targeting
`
`Traditional Marketers
`
`
`
`59
`
`Tailored Solutions: Sophisticated Advertisers
`
`AdWords Editor
`
`
`
`60
`
`Site Targeting
`Google Analytics
`
`Separate search and content bidding
`
`AdWords API
`
`Tailored Solutions: Sophisticated Advertisers
`
`
`
`61
`
`Intuitive Targeting
`
`Straightforward Reporting
`
`Simple Bidding
`
`SMBs
`
`Tailored Solutions
`
`
`
`62
`
`Video
`
`Mobile
`
`Radio
`
`
`New Opportunities
`
`
`
`Publishers
`
`63
`
`Publisher Size
`
`Large Partners
`Serving partners of all sizes
`
`AdSense
`
`
`
`Publishers
`
`64
`
`Publisher Size
`
`Online Partners
`
`Serving partners of all sizes
`
`AdSense
`
`
`
`Unduplicated reach and frequency of AdSense for Content network,custom comScoredata analysis, Nov 2005
`
`65
`
`–Optimization of current partners
`
`•Existing Partner Growth
`
`–Integration with blogging/
`–The Network is a sales platform
`
`publishing platforms
`
`•New Partner Growth
`
`viewer each month
`•128 Exposures per unique
`internet users
`•Reaches 69% of Global
`
`23%
`Other
`
`AdSense
`
` and Growing
`
`The Network is Large
`
`The Strength of the Content Network
`
`AdSense
`
`
`
`66
`
`–Aggregates the long tail
`
`–Site Targeting allows advertisers
`advertisers
`
`to reach their target audience
`
`•Broad reach for branding
`
`on Hip HopRelated Sites
`3.9 Million Daily Page Views
`
`advertising with niche content
`
`–Matches highly targeted
`
`–AdSense network covers nearly
`beyond search targeting
`•Coverage for advertisers
`
`every topic imaginable
`
`The Power of the “Tail”
`
`AdSense
`
`
`
`Select Customer Installations
`
`67
`
`–BearingPoint launched search
`–40+ partners signed & trained
`–Program launched in September
`
`practice based on Google
`
`•Building partnerships
`
`–Google Desktop for Enterprise
`–Google Mini (for SMB)
`
`•New products
`
`–First year in Europe & Japan
`
`–More than 3,000 active
`
`customers
`
`–100+ percent sales growth
`
`(vs 2004)
`
`•Gaining sales traction
`
`Enterprise
`
`
`
`Asia Pacific: 10 offices
`
`EMEA: 19 offices
`
`Americas: 17 offices
`
`68
`
`Global Sales: Sales Offices
`
`
`
`69
`
`Thai
`
`Israeli New Shekel
`
`Russian Rubles
`
`Polish Zlotych
`
`Croatian Kuna
`Chinese Yuan Renminbi
`
`English (UK)
`
`English (US)
`
`48 Currencies Accepted
`
`42 Language Interfaces
`
`Global Sales: Online Sales
`
`
`
`70
`
`–Senior Vice President Global Sales and Business Development
`
`•OmidKordestani
`
`•NikeshArora,
`
`–Vice President, European Operations
`
`•SukhinderSingh Cassidy
`
`–Vice President, Asia Pacific and Latin America Operations
`
`–Director, Online Sales and Operations
`
`–Vice President, Content Partnerships
`
`•David Eun
`
`–Vice President, Search Services
`
`•Joan Braddi
`
`•David Fischer
`
`Sales and Partnership Panel
`
`
`
`i88>35224.53.o00
`
`Analyst Day 2006.
`
`
`
`
`
`Chief Financial Officer
`George Reyes
`
`Analyst Day 2006
`
`
`
`73
`
`measures and the related reconciliations between these financialmeasures.
`financial measures that are most directly comparable to these non-GAAP financial
`presentation. The tables provided in this document have more details on the GAAP
`“Investor Relations”section of our corporate web site next to the link to the webcast of this
`“CFO Presentation –Non-GAAP Financials”which has been made available on the
`information on these non-GAAP financial measures, please see the document entitled
`financial information prepared and presented in accordance with GAAP. For more
`This financial information is not intended to be considered in isolation or as a substitute for
`income, non-GAAP operating expenses and free cash flow -in the attached presentation.
`•In addition, we are discussing three non-GAAP financial measures -non-GAAP operating
`
`•These forward-looking statements are subject to certain risks and uncertainties that could
`
`SEC.
`described in the "Risk Factors" section of our most recent 10-K and 10-Q filed with the
`statements. Many of the factors that could cause or contribute to such differences are
`cause our actual results to differ materially from those reflected in the forward-looking
`
`operating expenditures, expected stock dilution, and the sourcesof our future growth.
`levels of capital expenditures, the growth of our international operations, headcount and
`statements include statements regarding the seasonality of our business, our expected
`•The following presentation includes forward-looking statements. These forward-looking
`
`A Note from our Lawyers
`
`
`
`2006 Priorities
`
`Top Financial Questions
`
`2005 Financial Highlights
`
`74
`
`Agenda
`
`
`
`0%
`
`4%
`
`8%
`
`12%
`
`16%
`
`20%
`
`24%
`
`28%
`
`32%
`
`Revenue Growth
`
`Revenue
`
`Q1'04Q2'04Q3'04Q4'04Q1'05Q2'05Q3'05Q4'05
`
`10.2%
`
`14.0%
`
`7.5%
`
`$700
`
`$652
`
`$806
`
`15.1%
`
`$1,032
`
`$1,257
`
`21.6%
`
`$1,384
`
`21.8%
`
`$1,578
`
`28.0%
`
`27.2%
`
`75
`
`$0
`
`$400
`
`$800
`
`$1,200
`
`$1,600
`
`$1,919
`
`Q4 ’05 Y/Y Growth = 86%
`
`$2,000
`
`(In millions)
`
`Strong Revenue Growth
`
`
`
`0%
`
`25%
`
`50%
`
`Q4'05
`
`18.3%
`
`24.1%
`
`AdSense Growth Rate
`AdSense Revenue
`Q2'05
`
`Q3'05
`
`7.1%
`
`7.9%
`
`12.2%
`
`20.0%
`
`19.2%
`
`23.9%
`
`$675
`
`$630
`
`$737
`
`$584
`
`$657
`
`$799
`
`75%
`
`$885
`
`$1,098
`
`100%
`
`AdSense Q4 ’05 Y/Y Growth = 63%
`Google.com Q4 ’05 Y/Y Growth = 107%
`
`Google.com and Network Growth
`
`(In millions)
`
`Google Websites Growth Rate
`Google Websites Revenue
`
`Q1'05
`
`Q4'04
`
`Q3'04
`
`Q2'04
`
`Q1'04
`
`76
`
`27.5%
`
`28.8%
`
`$490
`
`$530
`
`11.0%
`
`19.9%
`
`$384
`
`$412
`
`3.7%
`
`13.1%
`
`$346
`
`$343
`
`24.5%
`
`$334
`
`30.7%
`
`$304
`
`$0
`
`$200
`
`$400
`
`$600
`
`$800
`
`$1,000
`
`$1,200
`
`
`
`($201 mm in Q3’04), Google Foundation donation ($90 mm in Q4’05)and IPR&D ($10.4 mm in Q4’04 and $20.8 mm in Q3’05).
`Note: Data adjusted for non-cash stock-based compensation charges and other items such as Yahoo! Settlement
`
`77
`
`Q4'05
`
`Q3'05
`
`Q2'05
`
`Q1'05
`
`Q4'04
`
`Q3'04
`
`Q2'04
`
`Q1'04
`
`Non-GAAP Operating Income
`
`$373
`
`$523
`
`$492
`
`$596
`
`$718
`
`$280
`
`$246
`
`$232
`
`$0
`
`$200
`
`$400
`
`$600
`
`Q4’05 Y/Y Growth = 93%
`
`$800
`
`(In millions)
`
`Rising Non-GAAP Operating Income
`
`
`
`Note: Free Cash Flow equals Cash Flow from Operations less Capital Expenditures.
`
`78
`
`Q4'05
`
`Q3'05
`
`Q2'05
`
`Q1'05
`
`Q4'04
`
`Q3'04
`
`Q2'04
`
`Q1'04
`
`$66
`
`$122
`
`$161
`
`$309
`
`$354
`
`$413
`
`$387
`
`$467
`
`Q4’05 Cash & Mkt. Sec = $8,034
`
`Q4’05 Y/Y Growth = 34%
`
`$0
`
`$100
`
`$200
`
`$300
`
`$400
`
`$500
`
`Strong Free Cash Flow Generation
`
`(In millions)
`
`
`
`How do you evaluate strategic distribution and acquisition opportunities?
`
`79
`
`Are you experiencing pressure on traffic acquisition costs?
`
`How should we think about operating expenses?
`
`Is international growth slowing?
`
`What are the drivers of capital expenditures?
`
`How do you monitor financial performance?
`
`How do you measure performance?
`
`Top Financial Questions
`
`
`
`80
`
`•Productivity per employee
`•Operating margin
`•Revenue growth
`
`•Number of advertisers
`
`and publishers
`
`= Coverage * Click-through rate *
`•Revenue per thousand searches
`•Traffic growth
`•Customer satisfaction
`•Search quality
`
`CPC * 1,000
`
`Financial Metrics
`
`What we are today
`
`Operational Metrics
`
`What we are today
`
`How Do You Measure Performance?
`
`
`
`•Weekly executive
`forecast meetings
`•Weekly revenue
`monitoring
`On-going
`
`meetings
`management
`
`•Cross-functional
`
`•Budget vs. actual
`
`analysis
`
`deal review
`
`•Resource requests
`
`trade-offs
`analyzed for
`evaluated and
`are received,
`
`“refreshed”
`•Budget is
`updates
`Quarterly
`
`81
`
`planning
`bottoms-up
`combined with
`framework
`•Tops-down
`planning process
`Annual
`
`•Board approval
`
`required
`
`How Do You Monitor Financial Performance?
`
`Key financial processes
`
`
`
`equipment & data centers (majority)
`•Machine components, networking
`
`significantly exceed 2005 levels
`•2006 capital expenditures will
`2006 Capital expenditures
`
`•Real estate
`
`reevaluation of added investment
`–Continuous cost/benefit analysis;
`–Longer-term benefits
`
`–Driven by traffic growth
`–Immediate benefits
`
`•New services
`
`•Core search and advertising
`Capital expenditures drivers
`
`businesses
`
`Q4'05
`
`Q3'05
`
`Q2'05
`
`Q1'05
`
`Q4'04
`
`Q3'04
`
`Q2'04
`
`Q1'04
`
`Cap EX
`
`82
`
`$0
`
`$50
`
`$157
`
`$142
`
`$246
`
`$293
`
`$59
`
`$78
`
`$96
`
`$86
`
`$100
`
`$150
`
`$200
`
`$250
`
`$300
`
`$350
`
`(In millions)
`Capital expenditures
`
`What Are the Drivers of Capital Expenditures?
`
`
`
`•Strongest international regions
`
`•Western Europe
`(outside UK)
`
`•Including Germany, France,
`
`Netherlands, Spain, Italy
`
`•Australia
`•Canada
`•Japan
`
`Europe in Q4’04
`impact of FX and the addition of AOL
`Q/Q growth in Q4’04 when excluding the
`
`•F/X headwinds decreased international
`
`revenues by 2.1% in 2005
`
`•European Q4’05 Q/Q growth exceeded
`
`International growth remains strong
`•International growth dynamics
`
`•
`
`International
`
`Domestic
`
`Q4'05
`
`Q3'05
`
`Q2'05
`
`Q1'05
`
`Q4'04
`
`Q3'04
`
`Q2'04
`
`Q1'04
`
`62%
`
`61%
`
`61%
`
`61%
`
`65%
`
`65%
`
`69%
`
`69%
`
`39%
`
`38%
`
`$1,578
`
`39%
`
`39%
`
`35%
`
`$1,032
`
`$1,257
`
`$1,384
`
`35%
`
`$806
`
`31%
`
`$700
`
`31%
`
`$652
`
`83
`
`$0
`
`$400
`
`$800
`
`$1,200
`
`$1,600
`
`$1,919
`
`$2,000
`(In millions)
`Geographical revenue contribution
`
`International Q4’05 Y/Y Growth = 102%
`Domestic Q4’05 Y/Y Growth = 77%
`
`Is International Growth Slowing?
`
`
`
`Google Foundation donation ($90 mm in Q4’05) and IPR&D ($10.4 mmin Q4 ’04 and $20.8 mm in Q3’05).
`Note: Data adjusted for non-cash stock-based compensation charges and other items such as Yahoo! Settlement ($201 mm in Q3’04),
`
`84
`
`Operating Margin
`
`Non-GAAP Operating Income
`
`Q4'05
`
`Q3'05
`
`Q2'05
`
`Q1'05
`
`Q4'04
`
`Q3'04
`
`Q2'04
`
`Q1'04
`
`20%
`
`25%
`
`30%
`
`35%
`
`40%
`
`37.4%
`
`$718
`
`$596
`37.8%
`
`$523
`
`37.8%
`
`$492
`
`39.1%
`
`$373
`
`36.1%
`
`$280
`
`$246
`
`$232
`
`$0
`
`$200
`
`$400
`
`34.8%
`
`35.1%
`
`35.6%
`
`$600
`
`(In millions)
`Non-GAAP operating margins
`
`$800
`
`How Should We Think About Operating Expenses?
`
`
`
`Google Foundation donation ($90 mm in Q4’05) and IPR&D ($10.4 mmin Q4’04 and $20.8 mm in Q3’05).
`Note: Data adjusted for non-cash stock-based compensation charges and other items such as Yahoo! Settlement ($201 mm in Q3’04),
`
`85
`
`–Opportunities are compelling
`•Well-planned strategic decisions
`
`of business
`
`–Headcount to scale with rest
`
`•G&A
`
`–Engineering talent, infrastructure
`
`•R&D
`Operating Expense Drivers
`
`•S&M
`
`–Headcount, office locations,
`
`toolbar distribution
`
`Total Non-GAAP OpEx
`
`G&A
`
`S&M
`
`R&D
`
`Q4'05
`
`Q3'05
`
`Q2'05
`
`Q1'05
`
`Q4'04
`
`Q3'04
`
`Q2'04
`
`Q1'04
`
`5.9%
`
`8.1%
`
`8.2%
`
`5.9%
`
`6.7%
`
`8.3%
`
`5.2%
`
`6.9%
`
`7.0%
`
`4.6%
`
`6.3%
`
`6.6%
`
`5.0%
`
`5.1%
`
`7.4%
`
`7.1%
`
`3.7%
`
`6.5%
`
`7.5%
`
`8.2%
`
`8.1%
`
`3.3%
`
`5.4%
`
`7.4%
`
`0.0%
`
`5.0%
`
`10.0%
`
`15.0%
`
`20.9%
`
`22.2%
`
`17.5%
`
`19.1%
`
`19.9%
`
`20.4%
`
`18.3%
`
`20.0%
`
`16.1%
`
`25.0%
`
`Non-GAAP operating expenses as a % of revenue
`
`How Should We Think About Operating Expenses?
`
`
`
`86
`
`0
`
`1,000
`
`2,000
`
`3,000
`
`4,000
`
`5,000
`
`How Should We Think About Operating Expenses?
`
`Q4’05 Y/Y Growth = 88%
`
`6,000
`
`Headcount
`
`Q4'05
`
`Q3'05
`
`Q2'05
`
`Q1'05
`
`Q4'04
`
`Q3'04
`
`Q2'04
`
`Q1'04
`
`1,907
`
`2,292
`
`2,668
`
`3,021
`
`3,482
`
`4,183
`
`4,989
`
`5,680
`
`
`
`Q4'05
`
`Q3'05
`
`Q2'05
`
`Internet Peers
`Q1'05
`
`Source: Peer data compiled from company filings and press releases.
`
`Q4'04
`
`Q3'04
`
`Q2'04
`
`Q1'04
`
`87
`
`$0.71
`
`$0.58
`
`$0.60
`
`$0.64
`
`$0.74
`
`$0.55
`
`$0.55
`
`$0.59
`
`$0.00
`
`$0.40
`
`$0.80
`
`$1.20
`
`$1.44
`
`$1.38
`
`$1.45
`
`$1.45
`
`$1.55
`
`$1.30
`
`$1.33
`
`$1.47
`
`$1.60
`
`(In millions)
`Annualized revenue per average employee
`
`$2.00
`
`How Should We Think About Operating Expenses?
`
`
`
`share count
`dilution on
`1 –1.5%
`
`2005 10-K
`Amount in
`
`Jan 1, 2006
`
`awarded
`and GSUs
`Options
`
`since
`
`88
`
`Jan 1, 2006
`
`prior to
`awarded
`and GSUs
`Options
`
`Calculating 2006 SBC Charges
`
`•New hire grants and Founders Awards
`
`–Restricted stock units (Google Stock Units)
`–Stock options
`
`•Types of equity awards
`Stock Based Compensation
`How Should We Think About Operating Expenses?
`
`
`
`TAC as % of Total Revenue
`
`TAC
`
`Q4'05
`
`Q3'05
`
`Q2'05
`
`Q1'05
`
`Q4'04
`
`Q3'04
`
`Q2'04
`
`Q1'04
`
`89
`
`20%
`
`24%
`
`28%
`
`32%
`
`36%
`
`40%
`
`44%
`
`$303
`
`$277
`
`$271
`
`32.8%
`
`$629
`
`34.0%
`
`$530
`
`35.7%
`$494
`
`$462
`36.8%
`
`$378
`
`36.6%
`
`37.6%
`
`39.6%
`
`41.6%
`
`$0
`
`$100
`
`$200
`
`$300
`
`$400
`
`$500
`
`$600
`
`$700
`
`(In millions)
`Traffic acquisition costs
`
`Are You Experiencing Pressure on TAC?
`
`
`
`90
`
`•Strategic implications
`•Brand association
`•End user segment
`
`•End user reach / size
`
`of distribution
`
`distributing future products
`create new channels for
`•Establish relationship and
`•Build brand recognition
`
`•Increase and protect search
`
`market share
`
`Partner Selection
`
`What we are today
`
`Strategic Objectives
`
`What we are today
`
`How Do You Evaluate Strategic Distribution Opportunities?
`
`
`
`91
`
`•Typically do not lead
`
`investment rounds
`
`•Structure earnouts where
`
`appropriate
`
`•Accelerate entry into new
`•Jumpstart innovation
`•Accelerate our product plans
`
`international markets
`
`•Bring superior
`•Are consistent with our mission
`
`engineering talent
`
`What we are today
`When evaluating potential
`
`opportunities, we
`
`acquisition targets that
`What we are today
`
`We focus on
`
`How Do You Evaluate Acquisition Opportunities?
`
`
`
`Processes
`Controls andRisk Mgmt
`Continue to Implement
`
`systems and processes
`develop world class
`CapEx, R&D and G&A to
`
`Global $100B Company
`and Infrastructure of a
`Building Systems
`
`MoreTraffic for Advertisers
`Wider Product Distribution
`Growth ofAdSense
`
`Partnerships / TAC
`S&M and
`
`Partnerships
`Growing our Overall
`
`92
`
`More Ways toMonetize
`MoreContent for Users
`
`R&D, CapEx and S&M
`
`IncreasedAd Revenue
`
`Increased Ad Revenue
`IncreasedTraffic
`
`Key Objectives
`
`and advertiser tools
`improve ad relevance
`R&D and CapEx to
`
`develop new products
`improve search and
`R&D and CapEx to
`Investments
`
`of Information
`Services for Publishers
`Building New Products and
`
`Perceived by End Users
`Quality of Ads as
`
`End User Traffic
`Search Quality &
`
`2006 Priorities
`2006 Priorities
`
`
`
`93
`
`•Aggressive Investments to Drive Superior Shareholder Returns
`•Global Opportunities are Compelling
`•Rigorous Financial Planning and Controls
`•Substantial Free Cash Flow Generation
`•Strong Growth in Revenues and Operating Income
`
`Putting it All Together
`
`
`
`i88>35224.53.o00
`
`Analyst Day 2006.
`
`
`
`