Google (GOOG)

Sales and Marketing

The following table presents our sales and marketing expenses, and sales and marketing expenses as a percentage of revenues for the periods presented (dollars in millions):

Sales and marketing expenses consist primarily of compensation and related costs for personnel engaged in customer service and sales and sales support functions, as well as advertising and promotional expenditures.

Sales and marketing expenses increased $37.7 million from 2008 to 2009. This increase was primarily due to an increase in advertising and promotional expense of $104.0 million, partially offset by a decrease in travel, conference and related expenses of $49.8 million.

Sales and marketing expenses increased $484.9 million from 2007 to 2008. This increase was primarily due to an increase in labor and facilities related costs of $373.1 million mostly as a result of a 20% increase in sales and marketing headcount. In addition, stock-based compensation expense increased $74.4 million.

We anticipate that sales and marketing expenses will increase in dollar amount and may increase as a percentage of revenues in 2010 and future periods as we expand our business on a worldwide basis.

Sales and Marketing.

The following table presents our sales and marketing expenses, and sales and marketing expenses as a percentage of revenues for the periods presented (dollars in millions, unaudited):

Sales and marketing expenses consist primarily of compensation and related costs for personnel engaged in customer service and sales and sales support functions, as well as advertising and promotional expenditures.

Sales and marketing expenses decreased $13.0 million from the three months ended March 31, 2008 to the three months ended March 31, 2009 primarily due to a decrease in travel and related expenses.

Sales and marketing expenses decreased $72.1 million from the three months ended December 31, 2008 to the three months ended March 31, 2009. This decrease was primarily due to a decrease in labor and facilities related costs of $41.2 million primarily due to lower annual bonus and commission expense recognized in the three months ended March 31, 2009 compared to the three months ended December 31, 2008.

We anticipate that sales and marketing expenses may increase in dollar amount and as a percentage of revenues in 2009 and future periods as we expand our business on a worldwide basis.

Sales and Marketing

The following table presents our sales and marketing expenses, and sales and marketing expenses as a percentage of revenues for the periods presented (dollars in millions):

47

Table of Contents

Sales and marketing expenses consist primarily of compensation and related costs for personnel engaged in customer service, sales, and sales support functions, as well as advertising and promotional expenditures.

Sales and marketing expenses decreased $2.8 million from the three months ended September 30, 2008 to the three months ended December 31, 2008.

Sales and marketing expenses increased $484.9 million from the year ended December 31, 2007 to the year ended December 31, 2008. This increase was primarily due to an increase in labor and facilities related costs of $373.1 million mostly as a result of a 20% increase in sales and marketing headcount. In addition, there was an increase in stock-based compensation expense of $74.4 million.

Sales and marketing expenses increased $611.8 million from the year ended December 31, 2006 to the year ended December 31, 2007. This increase was primarily due to an increase in labor and facilities related costs of $435.7 million mostly as a result of a 52% increase in sales and marketing headcount, including an increase in stock-based compensation expense of $72.2 million, and an increase in depreciation and related expense of $74.2 million due to our increased capital expenditures. In addition, there was an increase in promotional and advertising expense of $37.5 million and an increase in travel and entertainment expense of $28.9 million.

We anticipate that sales and marketing expenses may continue to increase in dollar amount and as a percentage of revenues in 2009 and future periods as we continue to expand our business on a worldwide basis.

Sales and Marketing

The following
table presents our sales and marketing expenses, and sales and marketing expenses as a percentage of revenues for the periods presented (dollars in millions):

47

Table of Contents

Sales and marketing expenses consist primarily of compensation and related costs for personnel engaged in
customer service, sales, and sales support functions, as well as advertising and promotional expenditures.

Sales and marketing expenses
decreased $2.8 million from the three months ended September 30, 2008 to the three months ended December 31, 2008.

Sales and
marketing expenses increased $484.9 million from the year ended December 31, 2007 to the year ended December 31, 2008. This increase was primarily due to an increase in labor and facilities related costs of $373.1 million mostly as a
result of a 20% increase in sales and marketing headcount. In addition, there was an increase in stock-based compensation expense of $74.4 million.

SIZE="2">Sales and marketing expenses increased $611.8 million from the year ended December 31, 2006 to the year ended December 31, 2007. This increase was primarily due to an increase in labor and facilities related costs of $435.7
million mostly as a result of a 52% increase in sales and marketing headcount, including an increase in stock-based compensation expense of $72.2 million, and an increase in depreciation and related expense of $74.2 million due to our increased
capital expenditures. In addition, there was an increase in promotional and advertising expense of $37.5 million and an increase in travel and entertainment expense of $28.9 million.

Sales and Marketing.

The following table presents our sales and marketing expenses, and sales and marketing expenses as a percentage of revenues for the periods presented (dollars in millions, unaudited):

Sales and marketing expenses consist primarily of compensation and related costs for personnel engaged in customer service, sales, and sales support functions, as well as advertising and promotional expenditures.

Sales and marketing expenses increased $24.2 million from the three months ended June 30, 2008 to the three months ended September 30, 2008. This increase was primarily due to an increase in labor and facilities related costs of $12.1 million and an increase in advertising and promotional expenses of $8.1 million.

Sales and marketing expenses increased $128.0 million from the three months ended September 30, 2007 to the three months ended September 30, 2008. This increase was primarily due to an increase in labor and facilities related costs of $94.4 million, mostly as a result of a 24% increase in sales and marketing headcount.

Sales and marketing expenses increased $401.3 million from the nine months ended September 30, 2007 to the nine months ended September 30, 2008. This increase was primarily due to an increase in labor and facilities related costs of $297.8 million mostly as a result of a 24% increase in sales and marketing headcount. In addition, there was an increase in stock-based compensation expense of $56.1 million.

We anticipate that sales and marketing expenses will continue to increase in dollar amount and may increase as a percentage of revenues in 2008 and future periods because we expect to employ more sales and marketing personnel compared to prior periods, and to continue the level of service we provide to our advertisers and Google Network members.

Sales and Marketing

The following table presents our sales and marketing expenses, and sales and marketing expenses as a percentage of revenues for the periods presented (dollars in millions, unaudited):

Sales and marketing expenses consist primarily of compensation and related costs for personnel engaged in customer service, sales, and sales support functions, as well as advertising and promotional expenditures.

Sales and marketing expenses increased $37.7 million from the three months ended March 31, 2008 to the three months ended June 30, 2008. This increase was primarily due to an increase in labor and facilities related costs of $17.5 million, mostly as a result of a 4% increase in sales and marketing headcount.

Sales and marketing expenses increased $129.0 million from the three months ended June 30, 2007 to the three months ended June 30, 2008. This increase was primarily due to an increase in labor and facilities related costs of $97.1 million, mostly as a result of a 42% increase in sales and marketing headcount.

Sales and marketing expenses increased $273.3 million from the six months ended June 30, 2007 to the six months ended June 30, 2008. This increase was primarily due to an increase in labor and facilities related costs of $203.4 million mostly as a result of a 42% increase in sales and marketing headcount and an increase in stock-based compensation expense of $21.5 million.

We anticipate sales and marketing expenses will continue to increase in dollar amount and may increase as a percentage of revenues in 2008 and future periods as we continue to expand our business on a worldwide basis. A significant portion of these increases relate to our plan to hire additional personnel and increase advertising and promotional expenditures to increase the level of service we provide to our advertisers and Google Network members. We also plan to add more international sales personnel to support our worldwide expansion.

Sales and Marketing.

The following table presents our sales and marketing expenses, and sales and marketing expenses as a percentage of revenues for the periods presented (dollars in millions, unaudited):

Sales and marketing expenses consist primarily of compensation and related costs for personnel engaged in customer service and sales and sales support functions, as well as advertising and promotional expenditures.

28

Table of Contents

Sales and marketing expenses increased $24.6 million from the three months ended December 31, 2007 to the three months ended March 31, 2008. This increase was primarily due to an increase in labor and facilities related costs of $29.4 million mostly as a result of a 16% increase in sales and marketing headcount which also includes the increased headcount resulting from our acquisition of DoubleClick. This increase was partially offset by a decrease in advertising and promotional activities.

Sales and marketing expenses increased $144.3 million from the three months ended March 31, 2007 to the three months ended March 31, 2008. This increase was primarily due to an increase in labor and facilities related costs of $106.3 million mostly as a result of a 54% increase in sales and marketing headcount, as well as an increase in stock-based compensation expense of $15.3 million.

We anticipate sales and marketing expenses will continue to increase in dollar amount and may increase as a percentage of revenues in 2008 and future periods as we continue to expand our business on a worldwide basis. A significant portion of these increases relate to our plan to hire additional personnel and increase advertising and promotional expenditures to increase the level of service we provide to our advertisers and Google Network members. We also plan to add more international sales personnel to support our worldwide expansion.

Sales and Marketing.

The following table presents our sales and marketing expenses, and sales and marketing expenses as a percentage of revenues for the periods presented (dollars in millions, unaudited):

Sales and marketing expenses consist primarily of compensation and related costs for personnel engaged in customer service and sales and sales support functions, as well as advertising and promotional expenditures.

Sales and marketing expenses increased $25.2 million from the three months ended June 30, 2007 to the three months ended September 30, 2007. This increase was primarily due to an increase in labor and facilities related costs of $14.8 million mostly as a result of a 13% increase in sales and marketing headcount. In addition, there was an increase in advertising and promotional expense of $6.0 million primarily due to increased marketing activities, and an increase in depreciation related expense of $4.9 million due to our increased capital expenditures. These increases were partially offset by a decrease in stock-based compensation expense of $6.5 million (see discussion below).

Sales and marketing expenses increased $173.8 million from the three months ended September 30, 2006 to the three months ended September 30, 2007. This increase was primarily due to an increase in labor and facilities related costs of $95.6 million mostly as a result of a 66% increase in sales and marketing headcount as well as an increase in accrued expense related to our annual bonus plan, an increase in depreciation and related expenses of $24.3 million due to our increased capital expenditures, an increase in advertising and promotional expense of $16.6 million primarily due to increased marketing activities and an increase in stock-based compensation expense of $15.2 million (see discussion below).

Sales and marketing expenses increased $444.7 million from the nine months ended September 30, 2006 to the nine months ended September 30, 2007. This increase was primarily due to an increase in labor and facilities related costs of $267.7 million mostly as a result of a 66% increase in sales and marketing headcount as well as an increase in accrued expense related to our annual bonus plan, an increase in depreciation and related expenses of $61.8 million due to our increased capital expenditures and an increase in stock-based compensation expense of $48.7 million (see discussion below).

We anticipate sales and marketing expenses will continue to increase in dollar amount and may increase as a percentage of revenues in 2007 and future periods as we continue to expand our business on a worldwide basis. A significant portion of these increases relate to our plan to hire additional personnel and increase advertising and promotional expenditures to increase the level of service we provide to our advertisers and Google Network members. We also plan to add a significant number of international sales personnel to support our worldwide expansion. In addition, we expect greater stock-based compensation expenses as a result of the launch of our employee TSO program (see discussion below).

27

Table of Contents

Sales and Marketing.

The following table presents our sales and marketing expenses, and sales and marketing expenses as a percentage of revenues for the periods presented (dollars in millions, unaudited):

Sales and marketing expenses consist primarily of compensation and related costs for personnel engaged in customer service and sales and sales support functions, as well as advertising and promotional expenditures.

Sales and marketing expenses increased $53.0 million from the three months ended March 31, 2007 to the three months ended June 30, 2007. This increase was primarily due to an increase in labor and facilities related costs of $26.7 million mostly as a result of an increase in accrued expense related to our annual bonus plan and a 13% increase in sales and marketing headcount. In addition, there was an increase in advertising and promotional expense of $11.0 million primarily due to increased marketing activities and an increase in stock-based compensation expense of $9.1 million (see discussion below).

Sales and marketing expenses increased $159.2 million from the three months ended June 30, 2006 to the three months ended June 30, 2007. This increase was primarily due to an increase in labor and facilities related costs of $91.5 million mostly as a result of a 75% increase in sales and marketing headcount as well as an increase in accrued expense related to our annual bonus plan, an increase in stock-based compensation expense of $22.1 million (see discussion below) and an increase in depreciation and related expenses of $20.8 million due to our increased capital expenditures.

Sales and marketing expenses increased $270.9 million from the six months ended June 30, 2006 to the six months ended June 30, 2007. This increase was primarily due to an increase in labor and facilities related costs of $172.1 million mostly as a result of a 79% increase in sales and marketing headcount as well as an increase in accrued expense related to our annual bonus plan, an increase in depreciation and related expenses of $37.5 million due to our increased capital expenditures and an increase in stock-based compensation expense of $33.4 million (see discussion below).

We anticipate sales and marketing expenses will continue to increase in dollar amount and may increase as a percentage of revenues in 2007 and future periods compared to 2006 as we continue to expand our business on a worldwide basis. A significant portion of these increases relate to our plan to hire additional personnel and increase advertising and promotional expenditures to increase the level of service we provide to our advertisers and Google Network members. We also plan to add a significant number of international sales personnel to support our worldwide expansion. In addition, we expect greater stock-based compensation expenses as a result of the launch of our employee TSO program (see discussion below).