2011 Q1 Google Earnings Slides

Q1 2011Quarterly Earnings Summary

First Quarter 2011 Highlights • Revenue growth of 27% Y/Y and 2% Q/Q – Google properties revenue increased 32% Y/Y and 4% Q/Q – Network revenues increased 19% Y/Y and decreased 3% Q/Q – International revenues were $4.6 billion • Operational Highlights – Strong financial metrics: revenue growth, profitability and cash flow – Continuing to invest heavily in our growth agenda • Investing in People -- to attract, retain, and reward the best talent • Investing in Sales & Marketing – for both new products + advertiser acquisition • Investing in Long-term infrastructure – including both facilities + our core computing network2

Quarterly Revenues Q1’11 Y/Y Growth = 27% $9,000 Q1’11 Q/Q Growth = 2% 8,575 8,440 $8,500 $8,000 $7,500 7,286 2,427 $7,000 6,775 6,820 2,495 6,674 $6,500 5,945 2,199 $6,000 ($ in millions) 5,509 5,523 2,044 2,036 2,063 $5,500 $5,000 1,801 1,638 1,684 $4,500 $4,000 $3,500 5,672 5,879 $3,000 4,499 4,833 $2,500 4,421 4,439 3,956 $2,000 3,693 3,653 $1,500 $1,000 $500 178 186 188 209 300 258 254 273 269 $0 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Other Google.com Network3

U.S. vs. International Revenues ($ in millions) 5,509 5,523 5,945 6,674 6,775 6,820 7,286 8,440 8,575 100% 90% 80% 52% 53% 53% 53% 53% 52% 52% 52% 53% 70% 60% 50% 40% 30% 48% 47% 47% 47% 47% 48% 48% 48% 47% 20% 10% 0% Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 US International4

Traffic Acquisition Costs $2,100 40% $2,000 $1,900 $1,800 35% $1,700 $1,600 $1,500 $1,400 30% $1,300 ($ in millions) 26.9% 27.2% 27.1% 26.6% 26.4% 26.4% $1,200 25.7% 25.3% $1,100 24.5% 25% $1,000 2,069 $900 1,732 1,805 2,038 1,721 1,711 $800 1,559 $700 1,436 1,453 20% $600 $500 $400 15% $300 $200 $100 $0 10% Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 TAC TAC as % of Advertising Revenues5

Costs and Expenses GAAP ($ in millions) Q110 Q410 Q111 Cost of Revenues $2,452 $2,946 $2,936 Percent of revenues 36% 35% 34% Research & Development $818 $1,051 $1,226 Percent of revenues 12% 12% 14% Sales & Marketing $607 $902 $1,026 Percent of revenues 9% 11% 12% General & Administrative $410 $559 $591 Percent of revenues 6% 7% 7% Total Costs & Expenses $4,287 $5,458 $5,779 Percent of revenues 63% 65% 67% Non-GAAP ($ in millions) Q110 Q410 Q111 Cost of Revenues $2,446 $2,901 $2,887 Percent of revenues 36% 34% 34% Research & Development $627 $827 $989 Percent of revenues 9% 10% 12% Sales & Marketing $553 $826 $948 Percent of revenues 8% 10% 11% General & Administrative $370 $508 $523 Percent of revenues 6% 6% 5% Total Costs & Expenses $3,996 $5,062 $5,347 Percent of revenues 59% 60% 62% Note: Please refer to supporting Table 1 for reconciliations of non-GAAP costs and expenses to GAAP costs and expenses6

Profitability GAAP ($ in millions except per share amounts) Q110 Q410 Q111 Income from Operations $ 2,488 $ 2,982 $ 2,796 Operating Margin 37% 35% 33% Net Income $ 1,955 $ 2,543 $ 2,298 EPS (diluted) $ 6.06 $ 7.81 $ 7.04 Non-GAAP ($ in millions except per share amounts) Q110 Q410 Q111 Income from Operations $ 2,779 $ 3,378 $ 3,228 Operating Margin 41% 40% 38% Net Income $ 2,181 $ 2,850 $ 2,638 EPS (diluted) $ 6.76 $ 8.75 $ 8.08 Note: Please refer to supporting Table 2 for reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures7

Free Cash Flow ($ in millions) Q110 Q410 Q111 Net cash provided by operating activities $2,584 $3,526 $3,172 Less purchases of property and equipment ($239) ($2,545) ($890) Free cash flow (non-GAAP) $2,345 $981 $2,2828

Overview of Q1 2011 OI&E and FX In Interest and Other Income, Net, we recognized net income of $96M for Q1 • In Q1, we recognized $190M of interest income earned on our investments and $27M in realized gains. • We expensed $113M related to our FX cash flow hedging program. • Excluding gains related to our FX cash flow hedging program, had foreign exchange rates remained constant from Q4 2010 through Q1 2011, our revenue in Q1 2011 would have been $19M lower. Excluding gains related to our FX cash flow hedging program, had foreign exchange rates remained constant from Q1 2010 through Q1 2011, our revenue in Q1 2011 would have been $23M lower. • In addition, our FX cash flow hedging program allowed us to recognize a benefit of approximately $14M to international revenue this quarter.9

Revenues by Geography ($ in millions) Q110 Q410 Q111 United States $3,196 $4,055 $4,005 United Kingdom $842 $878 $969 Rest of the world $2,737 $3,507 $3,601 Total Revenues $6,775 $8,440 $8,57510

International Revenues Excluding Hedging and FX Impact (Y/Y) ($ in millions) Q110 Q111 ($ in millions) Q409 Q410 UK revenues (GAAP) $842 $969 UK revenues (GAAP) $772 $878 exclude: exclude: a) f/x impact on Q111 revenues using Q110 rates a) f/x impact on Q410 revenues using Q409 rates (gains)/losses n/a 5 (gains)/losses n/a 26 b) hedging gains (10) (4) b) hedging gains (8) (2) UK revenues excluding f/x and hedging impact (Non-GAAP) $832 $970 UK revenues excluding f/x and hedging impact (Non-GAAP) $764 $902 Y/Y % (Non-GAAP) 17% Y/Y % (Non-GAAP) 18% ($ in millions) Q110 Q111 ($ in millions) Q409 Q410 ROW revenues (GAAP) $2,737 $3,601 ROW revenues (GAAP) $2,747 $3,507 exclude: exclude: a) f/x impact on Q111 revenues using Q110 rates a) f/x impact on Q410 revenues using Q409 rates (gains)/losses n/a (28) (gains)/losses n/a 106 b) hedging gains - (10) b) hedging gains - (23) ROW revenues excluding f/x and hedging impact (Non-GAAP) $2,737 $3,563 ROW revenues excluding f/x and hedging impact (Non-GAAP) $2,747 $3,590 Y/Y % (Non-GAAP) 30% Y/Y % (Non-GAAP) 31%11

International Revenues Excluding Hedging and FX Impact (Q/Q) ($ in millions) Q410 Q111 ($ in millions) Q310 Q410 UK Revenues (GAAP) $878 $969 UK Revenues (GAAP) $840 $878 exclude: exclude: a) f/x impact on Q111 revenues using Q410 rates a) f/x impact on Q410 revenues using Q310 rates (gains)/losses n/a 1 (gains)/losses n/a (23) b) hedging gains (2) (4) b) hedging gains (11) (2) UK revenues excluding f/x and hedging impact (Non-GAAP) $876 $966 UK revenues excluding f/x and hedging impact (Non-GAAP) $829 $853 Q/Q % (Non-GAAP) 10% Q/Q % (Non-GAAP) 3% ($ in millions) Q410 Q111 ($ in millions) Q310 Q410 ROW Revenues (GAAP) $3,507 $3,601 ROW Revenues (GAAP) $2,929 $3,507 exclude: exclude: a) f/x impact on Q111 revenues using Q410 rates a) f/x impact on Q410 revenues using Q310 rates (gains)/losses n/a (20) (gains)/losses n/a (178) b) hedging gains (23) (10) b) hedging gains (78) (23) ROW revenues excluding f/x and hedging impact (Non-GAAP) $3,484 $3,571 ROW revenues excluding f/x and hedging impact (Non-GAAP) $2,851 $3,306 Q/Q % (Non-GAAP) 2% Q/Q % (Non-GAAP) 16%12

Table 1 - Reconciliations of non-GAAP costs and expenses to GAAP costs and expenses As a % of As a % of As a % of ($ in millions) Q110 Revenues (1) Q410 Revenues (1) Q111 Revenues (1) Cost of revenues (GAAP) $ 2,452 36% $ 2,946 35% $ 2,936 34% Less: Stock-based compensation expense (6) (45) (49) Cost of revenues (non-GAAP) $ 2,446 36% $ 2,901 34% $ 2,887 34% Research and development (GAAP) $ 818 12% $ 1,051 12% $ 1,226 14% Less: Stock-based compensation expense (191) (224) (237) Research and development (non-GAAP) $ 627 9% $ 827 10% $ 989 12% Sales and marketing (GAAP) $ 607 9% $ 902 11% $ 1,026 12% Less: Stock-based compensation expense (54) (76) (78) Sales and marketing (non-GAAP) $ 553 8% $ 826 10% $ 948 11% General and administrative (GAAP) $ 410 6% $ 559 7% $ 591 7% Less: Stock-based compensation expense (40) (51) (68) General and administrative (non-GAAP) $ 370 6% $ 508 6% $ 523 5% Total costs and expenses (GAAP) $ 4,287 63% $ 5,458 65% $ 5,779 67% Less: Stock-based compensation expense (291) (396) (432) Total costs and expenses (non-GAAP) $ 3,996 59% $ 5,062 60% $ 5,347 62% (1) Percentages based on revenues of $6,775 million in Q110, $8,440 million in Q410 and $8,575 million in Q111.13

Table 2 - Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures Operating Operating Operating ($ in millions except per share amounts) Q110 Margin (1) Q410 Margin (1) Q111 Margin (1) Income from operations (GAAP) $ 2,488 37% $ 2,982 35% $ 2,796 33% Add: Stock-based compensation expense 291 396 432 Income from operations (non-GAAP) $ 2,779 41% $ 3,378 40% $ 3,228 38% Net income (GAAP) $ 1,955 $ 2,543 $ 2,298 Add: Stock-based compensation expense (net of tax) 226 307 340 Net income (non-GAAP) $ 2,181 $ 2,850 $ 2,638 Net income per share - diluted (GAAP) $ 6.06 $ 7.81 $ 7.04 Net income per share - diluted (non-GAAP) $ 6.76 $ 8.75 $ 8.08 Shares used in per share calculation - diluted 323 326 326 (1) Percentages based on revenues of $6,775 million in Q110, $8,440 million in Q410 and $8,575 million in Q111.14

Q1 2011Quarterly Earnings Summary

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2011 Q1 Google Earnings Slides

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