Google (GOOG)

Guaranteed Minimum Revenue Share Payments

In connection with our AdSense revenue share agreements, we are periodically required to make non-cancelable guaranteed minimum payments to a small number of our Google Network members over the term of the respective contracts. Under our contracts, these guaranteed payments may be adjusted downward based on our Google Network members not achieving defined performance targets, such as number of advertisements displayed or search queries. We believe the amounts included in the table above represent a reasonable estimate of the future minimum guaranteed payments. Actual guaranteed payments may differ from the estimates. To date, the aggregate advertiser fees generated under these AdSense agreements have exceeded the aggregate guaranteed minimum revenue share payments.

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At December 31, 2009, our aggregate outstanding non-cancelable guaranteed minimum revenue share commitments totaled $133.3 million through 2012 compared to $1,030.3 million at December 31, 2008.

Off-Balance Sheet Entities

At December 31, 2009, we did not have any off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K, that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Critical Accounting Policies and Estimates

We prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the U.S. In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosure of contingent assets and liabilities. In some cases, we could reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates, which we discuss further below. We have reviewed our critical accounting policies and estimates with the audit committee of our board of directors.

Guaranteed Minimum Revenue Share Payments

In connection with our AdSense revenue share agreements, we are periodically required to make non-cancelable guaranteed minimum payments to a small number of our Google Network members over the term of the respective contracts. Under our contracts, these guaranteed payments may be adjusted downward based on our Google Network members not achieving defined performance targets, such as number of advertisements displayed or search queries. In most cases, certain guaranteed amounts will be adjusted downward if our Google Network members do not meet their performance targets. In all of these AdSense agreements, if a Google Network member were unable to perform under the contract, such as being unable to provide search queries, as defined under the terms of that agreement, then we would not be obligated to make any non-cancelable guaranteed minimum revenue payments to that member. At December 31, 2009, our aggregate outstanding non-cancelable guaranteed minimum revenue share commitments totaled $133.3 million through 2012 compared to $1,030.3 million at December 31, 2008. We believe these amounts represent a reasonable estimate of the future minimum guaranteed payments.

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Google Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Guaranteed Minimum Revenue Share Payments

In connection with our AdSense revenue share agreements, we are periodically required to make non-cancelable guaranteed minimum payments to a small number of our Google Network members over the term of the respective contracts. Under our contracts, these guaranteed payments are prorated down based on our Google Network members not achieving defined performance targets, such as number of advertisements displayed or search queries. The amounts included in the table above assume that our Google Network members will meet or exceed their performance targets. We believe these amounts best represent a reasonable and conservative estimate of the future minimum guaranteed payments. Actual guaranteed payments may differ from the estimates presented above. To date, the aggregate advertiser fees generated under these AdSense agreements have exceeded the aggregate guaranteed minimum revenue share payments.

At December 31, 2008, our aggregate outstanding non-cancelable guaranteed minimum revenue share commitments totaled $1,030.3 million through 2012 compared to $1,746.4 million at December 31, 2007.

Guaranteed Minimum Revenue Share Payments

Guaranteed Minimum Revenue Share Payments

In connection with our AdSense revenue share agreements, we are periodically required to make non-cancelable guaranteed minimum payments to a small number of our Google Network members over the term of the respective contracts. Under our contracts, these guaranteed payments may be prorated down based on our Google Network members not achieving defined performance targets, such as number of advertisements displayed or search queries. In most cases, certain guaranteed amounts will be adjusted downward if our Google Network members do not meet their performance targets. In all of these AdSense agreements, if a Google Network member were unable to perform under the contract, such as being unable to provide search queries, as defined under the terms of that agreement, then we would not be obligated to make any non-cancelable guaranteed minimum revenue payments to that member. At December 31, 2008, our aggregate outstanding non-cancelable guaranteed minimum revenue share commitments totaled $1,030.3 million through 2012 compared to $1,746.4 million at December 31, 2007.

Guaranteed Minimum Revenue Share Payments

Guaranteed Minimum Revenue Share Payments

In connection with our AdSense revenue share agreements, we are periodically required to make non-cancelable guaranteed minimum revenue share payments to a small number of our Google Network members over the term of the respective contracts. These guaranteed payments can vary based on our Google Network members achieving defined performance terms, such as number of advertisements displayed or search queries. In some cases, certain guaranteed amounts will be adjusted downward if our Google Network members do not meet their performance terms and, in some cases, these amounts will be adjusted upward if they exceed their performance terms. In all of these AdSense agreements, if a Google Network member were unable to perform under the contract, such as being unable to provide search queries, as defined under the terms of that agreement, then we would not be obligated to make any non-cancelable guaranteed minimum revenue share payments to that member. At December 31, 2007, our aggregate outstanding non-cancelable guaranteed minimum revenue share commitments totaled $1,746.4 million through 2012 compared to $1,165.6 million at December 31, 2006.

Guaranteed Minimum Revenue Share Payments