1. Q2 2009
Quarterly Earnings
Summary

2. Second Quarter 2009 Highlights
• Revenue growth of 3% Y/Y
– Google properties revenue growth of 3% Y/Y and -1% Q/Q
– Network revenues increased 2% Y/Y and 3% Q/Q
– International revenues were $2 9 billion
$2.9
• Operational Highlights
– Traffic and revenues solid in Q2 despite difficult economic environment
– Key investments continue in our core search and ads businesses
– Continuing to invest in strategic growth areas:
• Display, Apps, and Mobile
• Maintaining a clear focus on operational
efficiency and continued cost management
2

3. Quarterly Revenues
Q2’09 Y/Y Growth = 3%
Q2’09 Q/Q Growth = 0%
$6,000
5,541
5 541 5,701
5,367 5,509 5,523
$5,500
5,186
$5,000
1,693
$4,500 1,680 1,638 1,684
,
1,655
1 655
1,686
$ in millions
$4,000
$3,500
$3,000
$3 000
$2,500
$2,000
3,672 3,811 3,693 3,653
3,400 3,530
$1,500
$1,000
$500
$0
Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09
3 Google.com Network Licensing and Other

4. U.S. vs.
U S vs International Revenues
($ in millions)
5,186 5,367 5,541 5,701 5,509 5,523
100%
90%
80%
70% 51% 52% 51% 50% 52% 53%
60%
50%
40%
49% 48% 49% 50% 48% 47%
30%
20%
10%
0%
Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09
US International
4

5. Traffic Acquisition Costs
$1,500 40%
$1,400
$1,300
35%
$1,200
$1,100
29.2%
29 2%
$1,000 28.4% 27.9% 30%
27.2%
$ in millions
$900 26.9% 26.9%
$800
1,486 1,474 1,495 1,483 1,436 1,453
, 25%
n
$700
$600
$500 20%
$400
$300
15%
$200
$100
$0 10%
Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09
TAC TAC as % of Advertising Revenues
5

6. Costs and Expenses
GAAP
$Millions Q2'08 Q1'09 Q2'09
Cost of Revenues
C f $2,148 $2,101 $2,108
Percent of revenues 40% 38% 38%
Research & Development $682 $642 $708
Percent of revenues 13% 12% 13%
Sales & Marketing $485 $434 $469
Percent of revenues 9% 8% 8%
General & Administrative $474 $448 $364
Percent of revenues 9% 8% 7%
Total Costs & Expenses $3,789 $3,625 $3,649
Percent of revenues 71% 66% 66%
Non GAAP
Non-GAAP
$Millions Q2'08 Q1'09 Q2'09
Cost of Revenues $2,139 $2,089 $2,094
Percent of revenues 40% 38% 38%
Research & Development $495 $473 $526
Percent of revenues 10% 9% 10%
Sales & Marketing $442 $375 $412
Percent of revenues 8% 7% 7%
General & Administrative $440 $411 $324
Percent of revenues 8% 7% 6%
Total Costs & Expenses $3,516 $3,348 $3,356
Percent of revenues 66% 61% 61%
Note: Please refer to supporting Table 1 for reconciliations of non-GAAP costs and
expenses to GAAP costs and expenses
6

7. Profitability
GAAP
$Millions (except per share amounts)
$Milli ( t h t ) Q2'08 Q1'09 Q2'09
Income from Operations $1,578 $ 1,884 $ 1,874
Operating Margin 29% 34% 34%
Net Income
N tI $1,247 $ 1,423 $ 1,485
EPS (diluted) $3.92 $ 4.49 $ 4.66
Non-GAAP
$Millions (except per share amounts) Q2'08 Q1'09 Q2'09
Income from Operations $1,851 $ 2,161 $ 2,167
Operating Margin 34% 39% 39%
Net Income $1,472 $ 1,636 $ 1,708
EPS (diluted) $4.63 $ 5.16 $ 5.36
Note: Please refer to supporting Table 2 for reconciliations of non-GAAP results of operations
pp g p
measures to the nearest comparable GAAP measures
7

8. Free Cash Flow
$Millions Q2'08 Q1'09 Q2'09
Net cash provided by
operating activities $1,766 $2,250 $1,609
Less purchases of property
and equipment
q p ($
($697)
) ($
($263)
) ($
($139)
)
Free cash flow (Non-GAAP) $1,069 $1,987 $1,470
8

9. Table 1 - Reconciliations of non-GAAP costs and expenses
to GAAP costs and expenses
As a % of As a % of As a % of
$Millions Q2'08 Revenues (1) Q1'09 Revenues (1) Q2'09 Revenues (1)
Cost of Revenues (GAAP) $ 2,148
2 148 40% $ 2,101
2 101 38% $ 2,108
2 108 38%
Less: Stock-based compensation (9) (12) (14)
Cost of Revenues (non-GAAP) $ 2,139 40% $ 2,089 38% $ 2,094 38%
Research and development (GAAP) $ 682 13% $ 642 12% $ 708 13%
Less: Stock-based compensation (187) (169) (182)
Research and development (non GAAP)
(non-GAAP) $ 495 10% $ 473 9% $ 526 10%
Sales and marketing (GAAP) $ 485 9% $ 434 8% $ 469 8%
Less: Stock-based compensation (43) (59) (57)
Sales and marketing (non-GAAP) $ 442 8% $ 375 7% $ 412 7%
General and administrative (GAAP) $ 474 9% $ 448 8% $ 364 7%
Less: Stock-based compensation (34) (37) (40)
General and administrative (non-GAAP) $ 440 8% $ 411 7% $ 324 6%
Total costs and expenses (GAAP) $ 3,789 71% $ 3,625 66% $ 3,649 66%
Less: Stock-based compensation (273) (277) (293)
Total
T t l costs and expenses (non-GAAP)
t d ( GAAP) $ 3,516
3 516 66% $ 3,348
3 348 61% $ 3,356
3 356 61%
(1) Percentages based on revenues of $5,367 million in Q2 '08, $5,509 million in Q1 '09 and $5,523 million in Q2 '09.
9

10. Table 2 - Reconciliations of non-GAAP results of operations
measures to the nearest comparable GAAP measures
Operating Operating Operating
Margin Margin Margin
$ millions except per share amounts Q2'08 (1) Q1'09 (1) Q2'09 (1)
Income from operations (GAAP) $ 1,578 29% $ 1,884 34% $ 1,874 34%
Add: Stock-based compensation
Add S k b d i 273 277 293
Income from operations (non-GAAP) $ 1,851 34% $ 2,161 39% $ 2,167 39%
Net income (GAAP) $ 1,247 $ 1,423 $ 1,485
Add: Stock-based compensation (net of tax) 225 213 223
Net income (non GAAP)
(non-GAAP) $ 1,472 $ 1,636 $ 1,708
Net income per share - diluted (GAAP) $ 3.92 $ 4.49 $ 4.66
Net income per share - diluted (non-GAAP) $ 4.63 $ 5.16 $ 5.36
Shares used in per share calculation - diluted 318 317 319
(1) Percentages based on revenues of $5 367 million in Q2 '08 $5 509 million in Q1 '09 and $5 523 million in Q2 '09
$5,367 08, $5,509 09 $5,523 09.
10

11. Q2 2009
Quarterly Earnings
Summary