Inside Google's Wallet

INSIDE Googles WALLET: How the World's Second Most Valuable Tech Company Spends Its Money Ever since Google was first incorporated in 1998, its meteoric rise has set the standard for other tech companies in the Internet age. Now one of the world's most innovative companies, Google has a constantly expanding list of software and hardware products, including Android, the world's most-used smartphone platform. Find out how Google spends its ever-expanding income. REVENUES 2011 $37.9 BILLION TOTAL COSTS & EXPENSES 2011 $26.2 BILLION NET PROFIT 2011 $9.7 BILLION PROFIT GROWTH $10 billion $8 billion $6 billion $4 billion 2007 2008* 2009 2010 2011 $4.204 $4.227 $6.52 $8.505 $9.737 *$1 billion increase in traffic acquisition costs, including increased data center costs AN OVERVIEW OF REVENUES 96% $26.145 BIL $10.386 BIL of revenues from Google websites from Google came from Network advertising in 2011 Members' websites COST AND EXPENSES Mostly traffic acquisition costs, plus operating expenses for data centers, including: Expenses over time MANUFACTURING AND DELIVERY 2011 $13.188 bil OF GOODS AND SERVICES 2010 $10.417 bil Depreciation Labor Energy Bandwidth Transaction fees 2009 $8.844 bil Total traffic acquisition costs Paid to Google Network members under arrangements through AdSense and to distribution partners TRAFFIC ACQUISITION 2011 $8.811 bil 2010 $7.317 bil 2009 $6.169 bil All Google employees received a 10% BASE SALARY RAISE in 2011 SALARIES Expenses over time Increase in 2011 attributed in part to: RESEARCH AND DEVELOPMENT 2011 $5.162 bil $. 2$ 2$ 2010 $3.762 bil 24 $. $875 MILLION $200 MILLION increase in facilities- and labor-related costs increase in stock-based 2009 $2.843 bil compensation Expenses over time Increase in 2011 attributed in part to: SALES AND MARKETING 2011 $4.589 bil 24 24 24 24 2010 $2.799 bil $4 $787 MILLION increase in facilities- and labor-related costs $700 MILLION increase in advertising and promotional 2009 $1.984 bil expense Expenses over time Increase in 2011 attributed in part to: GENERAL AND ADMINISTRATIVE 2011 $2.724 billion 2$ 2$ 2$ 24 EXPENSES 2010 $1.962 billion $350 MIL $260 MIL $116 MIL increase in increase in ncrease professional services, mostly compensation consulting and legal expenses 2009 $1.668 billion facilities- and stock-based labor-related costs U.S. TAXES = $0.2 billion 24 Income tax provision 2011: $2.589 BIL 24 24 2$ 24 24 $. 24 2$ $4 2010: $2.291 BIL O Å 24 $. 24 2$ 2009: $1.861 BIL OS 24 2$ 24 SPECIAL EXPENSES IN 2011 ita Software Acquired Motorola for $784 MILLION $676 MILLION $12.5 BILLION increase in cost of data centers to acquire ITA, maker of flight search software For all its expenses, Google offers many of its products for free. Perhaps that's the key to making your company a part of everyday life on a global scale. PROVIDED BY: MASTERS-IN-FINANCE.ORG Sources http://www.sec.gov/Archives/edgar/data/1288776/000119312512025336/d260164d10k.htm data/1288776/000119312512025336/d260164d10k.htm http://www.sec.gov/Archives/edgar/data/1288776/000119312512025336/d260164d10k.htm http://www.law.cornell.edu/uscode/text/26/11 http://www.isuppli.com/Teardowns/News/pages/Low-End-Google-Nexus-7-Carries-$157-BOM-Teardown-Reveals.aspx http://www.sec.gov/Archives/edgar/data/1288776/000119312510030774/d10k.htm %24