This excerpt taken from the GOOG 10-K filed Feb 12, 2010.
We generate our revenues almost entirely from advertising, and the reduction in spending by or loss of advertisers could seriously harm our business.
We generated 97% of our revenues in both 2008 and 2009 from our advertisers. Our advertisers can generally terminate their contracts with us at any time. Advertisers will not continue to do business with us if their investment in advertising with us does not generate sales leads, and ultimately customers, or if we do not deliver
their advertisements in an appropriate and effective manner. In addition, expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. If we are unable to remain competitive and provide value to our advertisers, they may stop placing ads with us, which would negatively harm our revenues and business.