Google reported strong revenue growth of 58% year-over-year and 6% quarter-over-quarter for Q2 2007. Investments in hiring and infrastructure remained priorities. Google continued to lead in search and ads while launching new products. International revenue increased significantly in key markets like Spain, Italy and France.

1. Q2 2007
Quarterly Earnings
Summary

2. Second Quarter 2007 Highlights
• Revenue growth of 58% Y/Y and 6% Q/Q
– Google properties revenue growth of 74% Y/Y and 9% Q/Q, driven by both traffic and
monetization
– Network revenues increased 36% Y/Y and flat Q/Q, reflecting seasonality
– International revenue growth strong, particularly in Spain, Italy, and France
• Investments in hiring the best people and building the best global
infrastructure remained key priorities
• Continued leadership in search and ads
• Raised the bar with the launch of Universal Search
• Strengthened Google Apps with agreement to acquire Postini (July)
– Demonstrates Google’s commitment to providing hosted applications to businesses of all
sizes
2

3. Quarterly Revenue
3,872
$4,000 Q2’07 Y/Y Growth = 58%
3,664
Q2’07 Q/Q Growth = 6%
$3,500
3,205
1,352
$ in millions
$3,000 1,345
2,690
2,456 1,198
$2,500
2,254
1,037
1,919
$2,000
997
928
1,578
1,384
$1,500 799
1,257
2,486
675
2,282
630
$1,000 1,977
584
1,626
1,432
1,297
1,098
$500 885
737
657
$0
Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07
Google.com Network Licensing and Other
3

4. U.S. vs. International Revenue
3,872
$4,000
Q2’07 US = 52% of total revenue
3,664
Q2’07 International = 48% of total revenue
$3,500
3,205 48%
$ in millions
47%
$3,000
2,690
44%
2,456
$2,500
2,254 44%
42%
1,919
$2,000
42%
1,578
38%
1,384
$1,500
1,257 39%
39%
39%
$1,000
56% 53%
$500 56% 52%
58%
58%
62%
61%
61% 61%
$0
Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07
US International
4

5. Traffic Acquisition Costs
1,125 1,148
$1,200 40%
37.2%
36.1%
$1,100
976
34.0%
$1,000 35%
33.2% 32.5% 32.3%
$900 825
785
$800 30%
31.0% 30.7% 31.0%
723
$ in millions
29.9%
$700
629
$600 25%
530
494
462
$500
$400 20%
$300
$200 15%
$100
$0 10%
Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07
TAC TAC as % of Advertising Revenues
5

6. Costs and Expenses
GAAP
$Millions Q2'06 Q1'07 Q2'07
Costs of Revenues $989.0 $1,470.4 $1,560.3
Percent of revenues 40.3% 40.1% 40.3%
Research & Development $282.6 $408.4 $532.1
Percent of revenues 11.5% 11.1% 13.7%
Sales & Marketing $196.4 $302.6 $355.6
Percent of revenues 8.0% 8.3% 9.2%
General & Administrative $172.6 $261.4 $319.4
Percent of revenues 7.0% 7.2% 8.2%
Total Costs & Expenses $1,640.6 $2,442.8 $2,767.4
Percent of revenues 66.8% 66.7% 71.4%
Non-GAAP
$Millions Q2'06 Q1'07 Q2'07
Costs of Revenues $986.7 $1,466.0 $1,552.6
Percent of revenues 40.2% 40.0% 40.1%
Research & Development $212.0 $287.6 $375.1
Percent of revenues 8.6% 7.8% 9.7%
Sales & Marketing $182.1 $275.3 $319.2
Percent of revenues 7.4% 7.5% 8.2%
General & Administrative $150.7 $230.0 $279.0
Percent of revenues 6.1% 6.3% 7.2%
Total Costs & Expenses $1,531.5 $2,258.9 $2,525.9
Percent of revenues 62.3% 61.6% 65.2%
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 Q2'06 Q1'07 Q2'07
Income from Operations $815.4 $1,221.2 $1,104.6
Operating Margin 33.2% 33.3% 28.5%
Net Income $721.1 $1,002.2 $925.1
EPS (diluted) $2.33 $3.18 $2.93
Non-GAAP
$Millions Q2'06 Q1'07 Q2'07
Income from Operations $924.5 $1,405.1 $1,346.1
Operating Margin 37.6% 38.3% 34.8%
Net Income $772.1 $1,159.3 $1,123.6
EPS (diluted) $2.49 $3.68 $3.56
Note: Please refer to supporting Table 2 for reconciliations of non-GAAP results of operations
measures to the nearest comparable GAAP measures
7

8. Free Cash Flow
$Millions Q2'06 Q1'07 Q2'07
Net cash provided by
operating activities $840.6 $1,219.6 $1,229.9
Less purchases of property
and equipment ($699.0) ($596.9) ($575.1)
Free cash flow (Non-GAAP) $141.6 $622.7 $654.8
8

9. Key Takeaways
• Google’s excellence in search and ads continues to drive growth
• Executing on Search.Ads.Apps strategy at scale around the world
• Investing in international markets to meet tremendous opportunity
• Significant investments in people and infrastructure key
differentiator
• Creating a better, richer experience for users around the world
drives all investment decisions
9

10. Table 1 - Reconciliations of non-GAAP costs and expenses
to GAAP costs and expenses
As a % of As a % of As a % of
Revenues (1) Revenues (1) Revenues (1)
$Millions Q2'06 Q1'07 Q2'07
Cost of Revenues (GAAP) $ 989.0 40.3% $ 1,470.4 40.1% $ 1,560.3 40.3%
Less: Stock-based compensation (2.3) - (4.4) - (7.7) -
Cost of Revenues (non-GAAP) $ 986.7 40.2% $ 1,466.0 40.0% $ 1,552.6 40.1%
Research and development (GAAP) $ 282.6 11.5% $ 408.4 11.1% $ 532.1 13.7%
Less: Stock-based compensation (70.6) - (120.8) - (157.0) -
Research and development (non-GAAP) $ 212.0 8.6% $ 287.6 7.8% $ 375.1 9.7%
Sales and marketing (GAAP) $ 196.4 8.0% $ 302.6 8.3% $ 355.6 9.2%
Less: Stock-based compensation (14.3) - (27.3) - (36.4) -
Sales and marketing (non-GAAP) $ 182.1 7.4% $ 275.3 7.5% $ 319.2 8.2%
General and administrative (GAAP) $ 172.6 7.0% $ 261.4 7.2% $ 319.4 8.2%
Less: Stock-based compensation (21.9) - (31.4) - (40.4) -
General and administrative (non-GAAP) $ 150.7 6.1% $ 230.0 6.3% $ 279.0 7.2%
Total costs and expenses (GAAP) $ 1,640.6 66.8% $ 2,442.8 66.7% $ 2,767.4 71.4%
Less: Stock-based compensation (109.1) - (183.9) - (241.5) -
Total costs and expenses (non-GAAP) $ 1,531.5 62.3% $ 2,258.9 61.6% $ 2,525.9 65.2%
(1) Percentages based on GAAP revenues of $2,456 million in Q2 '06, $3,664 million in Q1 '07 and $3,872 million in Q2 '07
10

11. Table 2 - Reconciliations of non-GAAP results of operations
measures to the nearest comparable GAAP measures
Operating Operating Operating
Margin Margin Margin
(1) (1) (1)
$Millions except per share amounts Q2'06 Q1'07 Q2'07
Income from operations (GAAP) $ 815.4 33.2% $ 1,221.2 33.3% $ 1,104.6 28.5%
Add: Stock-based compensation 109.1 - 183.9 - 241.5 -
Income from operations (non-GAAP) $ 924.5 37.6% $ 1,405.1 38.3% $ 1,346.1 34.8%
Net income (GAAP) $ 721.1 $ 1,002.2 $ 925.1
Add: Stock-based compensation (net of tax) 83.3 157.1 198.5
Less: One-time gain from the sale of our investment in Baidu (net of tax) (32.3) - -
Net income (non-GAAP) $ 772.1 $ 1,159.3 $ 1,123.6
Net income per share - diluted (GAAP) $2.33 $3.18 $2.93
Net income per share - diluted (non-GAAP) $2.49 $3.68 $3.56
Shares used in per share calculation - diluted 310 315 315
(1) Percentages based on GAAP revenues of $2,456 million in Q2 '06, $3,664 million in Q1 '07 and $3,872 million in Q2 '07
11

12. Q2 2007
Quarterly Earnings
Summary