FYI

MOUNTAIN VIEW, Calif. – April 17, 2008 - Google Inc. (NASDAQ: GOOG)
today announced financial results for the quarter ended March 31,
2008.

"Our ongoing innovation in search, ads, and apps helped drive healthy
growth globally across our product lines, yielding another strong
quarter for Google," said Eric Schmidt, CEO of Google. "As we
integrate DoubleClick into our advertising platform, we see exciting
new ways to improve the user experience and increase value for our
advertisers and partners. Also, while exercising operational
discipline, we continue to explore opportunities that add value to
users everywhere and to Google in the long term."

Q1 Financial Summary

Google's results for the quarter ended March 31, 2008, include the
operations of DoubleClick Inc. from the date of acquisition, March 11,
2008, through the end of the quarter, and are compared to pre-
acquisition results of prior periods. The overall impact of
DoubleClick in the first quarter of 2008 was immaterial to revenue and
only slightly dilutive to both GAAP and non-GAAP operating income, net
income and earnings per share.

Google reported revenues of $5.19 billion for the quarter ended March
31, 2008, an increase of 42% compared to the first quarter of 2007 and
an increase of 7% compared to the fourth quarter of 2007. Google
reports its revenues, consistent with GAAP, on a gross basis without
deducting traffic acquisition costs, or TAC. In the first quarter of
2008, TAC totaled $1.49 billion, or 29% of advertising revenues.

Google reports operating income, net income, and earnings per share
(EPS) on a GAAP and non-GAAP basis. The non-GAAP measures, as well as
free cash flow, an alternative non-GAAP measure of liquidity, are
described below and are reconciled to the corresponding GAAP measures
in the accompanying financial tables.
• GAAP operating income for the first quarter of 2008 was $1.55
billion, or 30% of revenues. This compares to GAAP operating income
of $1.44 billion, or 30% of revenues, in the fourth quarter of 2007.
Non-GAAP operating income in the first quarter of 2008 was $1.83
billion, or 35% of revenues. This compares to non-GAAP operating
income of $1.69 billion, or 35% of revenues, in the fourth quarter of
2007.
• GAAP net income for the first quarter of 2008 was $1.31 billion as
compared to $1.21 billion in the fourth quarter of 2007. Non-GAAP net
income in the first quarter of 2008 was $1.54 billion, compared to
$1.41 billion in the fourth quarter of 2007.
• GAAP EPS for the first quarter of 2008 was $4.12 on 317 million
diluted shares outstanding, compared to $3.79 for the fourth quarter
of 2007 on 318 million diluted shares outstanding. Non-GAAP EPS in
the first quarter of 2008 was $4.84, compared to $4.43 in the fourth
quarter of 2007.
• Non-GAAP operating income, non-GAAP operating margin, non-GAAP net
income, and non-GAAP EPS are computed net of stock-based compensation
(SBC). In the first quarter of 2008, the charge related to SBC was
$281 million as compared to $245 million in the fourth quarter of
2007. Tax benefits related to SBC have also been excluded from these
non-GAAP measures. The tax benefit related to SBC was $51 million in
the first quarter of 2008 and $42 million in the fourth quarter of
2007. Reconciliations of non-GAAP measures to GAAP operating income,
operating margin, net income, and EPS are included at the end of this
release.

Q1 Financial Highlights

Revenues – Google reported revenues of $5.19 billion for the quarter
ended March 31, 2008, representing a 42% increase over first quarter
2007 revenues of $3.66 billion and a 7% increase over fourth quarter
2007 revenues of $4.83 billion. Google reports its revenues,
consistent with GAAP, on a gross basis without deducting TAC.

Google Sites Revenues - Google-owned sites generated revenues of $3.40
billion, or 66% of total revenues, in the first quarter of 2008. This
represents a 49% increase over first quarter 2007 revenues of $2.28
billion and a 9% increase over fourth quarter 2007 revenues of $3.12
billion.

Google Network Revenues - Google’s partner sites generated revenues,
through AdSense programs, of $1.69 billion, or 33% of total revenues,
in the first quarter of 2008. This represents a 25% increase over
network revenues of $1.35 billion generated in the first quarter of
2007 and a 3% increase over fourth quarter 2007 revenues of $1.64
billion.

International Revenues - Revenues from outside of the United States
totaled $2.65 billion, representing 51% of total revenues in the first
quarter of 2008, compared to 47% in the first quarter of 2007 and 48%
in the fourth quarter of 2007. Had foreign exchange rates remained
constant from the fourth quarter of 2007 through the first quarter of
2008, our revenues in the first quarter of 2008 would have been $18
million lower. Had foreign exchange rates remained constant from the
first quarter of 2007 through the first quarter of 2008, our revenues
in the first quarter of 2008 would have been $202 million lower.

Revenues from the United Kingdom totaled $803 million, representing
15% of revenue in the first quarter of 2008, compared to 16% in the
first quarter of 2007 and 14% in the fourth quarter of 2007.

Paid Clicks – Aggregate paid clicks, which include clicks related to
ads served on Google sites and the sites of our AdSense partners,
increased approximately 20% over the first quarter of 2007 and
approximately 4% over the fourth quarter of 2007.

TAC - Traffic Acquisition Costs, the portion of revenues shared with
Google’s partners, increased to $1.49 billion in the first quarter of
2008. This compares to TAC of $1.44 billion in the fourth quarter of
2007. TAC as a percentage of advertising revenues was 29% in the
first quarter, compared to 30% in the fourth quarter of 2007.

The majority of TAC expense is related to amounts ultimately paid to
our AdSense partners, which totaled $1.34 billion in the first quarter
of 2008. TAC is also related to amounts ultimately paid to certain
distribution partners and others who direct traffic to our website,
which totaled $143 million in the first quarter of 2008.

Other Cost of Revenues - Other cost of revenues, which is comprised
primarily of data center operational expenses, credit card processing
charges as well as content acquisition costs, increased to $624
million, or 12% of revenues, in the first quarter of 2008, compared to
$516 million, or 11% of revenues, in the fourth quarter of 2007.

Pursuant to our acquisition of DoubleClick, we allocated $862 million
to identified intangible assets, which have a weighted average useful
life of 6.3 years.

Operating Expenses - Operating expenses, other than cost of revenues,
were $1.53 billion in the first quarter of 2008, or 30% of revenues,
compared to $1.43 billion in the fourth quarter of 2007, or 30% of
revenues. The operating expenses in the first quarter of 2008
included $809 million in payroll-related and facilities expenses,
compared to $756 million in the fourth quarter of 2007.

Stock-Based Compensation (SBC) – In the first quarter of 2008, the
total charge related to SBC was $281 million as compared to $245
million in the fourth quarter of 2007.

We currently estimate stock-based compensation charges for grants to
employees prior to April 1, 2008 to be approximately $1.1 billion for
2008. This does not include expenses to be recognized related to
employee stock awards that are granted after April 1, 2008 or non-
employee stock awards that have been or may be granted. We currently
anticipate that dilution related to all equity grants to employees
will be at or below 2% this year.

Operating Income - GAAP operating income in the first quarter of 2008
was $1.55 billion, or 30% of revenues. This compares to GAAP
operating income of $1.44 billion, or 30% of revenues, in the fourth
quarter of 2007. Non-GAAP operating income in the first quarter of
2008 was $1.83 billion, or 35% of revenues. This compares to non-GAAP
operating income of $1.69 billion, or 35% of revenues, in the fourth
quarter of 2007.

Net Income – GAAP net income for the first quarter of 2008 was $1.31
billion as compared to $1.21 billion in the fourth quarter of 2007.
Non-GAAP net income was $1.54 billion in the first quarter of 2008,
compared to $1.41 billion in the fourth quarter of 2007. GAAP EPS for
the first quarter of 2008 was $4.12 on 317 million diluted shares
outstanding, compared to $3.79 for the fourth quarter of 2007, on 318
million diluted shares outstanding. Non-GAAP EPS for the first
quarter of 2008 was $4.84, compared to $4.43 in the fourth quarter of
2007.

Income Taxes – Our effective tax rate was 24% for the first quarter of
2008.

Cash Flow and Capital Expenditures – Net cash provided by operating
activities for the first quarter of 2008 totaled $1.78 billion as
compared to $1.69 billion for the fourth quarter of 2007. In the
first quarter of 2008, capital expenditures were $842 million, the
majority of which was related to IT infrastructure investments,
including data centers, servers, and networking equipment. Free cash
flow, an alternative non-GAAP measure of liquidity, is defined as net
cash provided by operating activities less capital expenditures. In
the first quarter of 2008, free cash flow was $938 million.

We expect to continue to make significant capital expenditures.

A reconciliation of free cash flow to net cash provided by operating
activities, the GAAP measure of liquidity, is included at the end of
this release.

Cash – As of March 31, 2008, cash, cash equivalents, and marketable
securities were $12.1 billion.

On a worldwide basis, Google employed 19,156 full-time employees as of
March 31, 2008, up from 16,805 full-time employees as of December 31,
2007. Of the 2,351 employees added in the first quarter of 2008,
approximately 1,500 were associated with DoubleClick. Since the close
of the acquisition, Google has conducted a review of its ongoing
headcount requirements and approximately 10% of the DoubleClick
workforce was laid off in the U.S. in early April.

WEBCAST AND CONFERENCE CALL INFORMATION

A live audio webcast of Google’s first quarter 2008 earnings release
call will be available at http://investor.google.com/webcast.html.
The call begins today at 1:30 PM (PT) / 4:30 PM (ET). This press
release, the financial tables, as well as other supplemental
information including the reconciliations of certain non-GAAP measures
to their nearest comparable GAAP measures, are also available at that
site. A replay of the call will be available beginning at 7:30 PM
(ET) today through midnight Thursday, April 24, 2008 by calling
888-203-1112 in the United States or 719-457-0820 for calls from
outside the United States. The required confirmation code for the
replay is 9835474.

FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements that are based
on information available to us as of the date of this press release
and our current expectations, forecasts and assumptions, and involve
risks and uncertainties. These statements include statements relating
to our success in integrating DoubleClick, our ability to identify and
explore new opportunities to improve the user experience, add value to
users and Google, and increase value for our advertisers and partners,
our expected stock-based compensation charges, the expected dilution
related to equity grants to our employees, and our plans to make
significant capital expenditures. Actual results may differ
materially from the results predicted and reported results should not
be considered as an indication of future performance. The potential
risks and uncertainties that could cause actual results to differ from
the results predicted include, among others, difficulties in
integrating DoubleClick into our business, unforeseen changes in our
hiring patterns, the amount of stock-based compensation we issue to
our service providers, our need to expend capital to accommodate the
growth of the business, as well as those risks and uncertainties
included under the captions “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations,” in our Annual Report on Form 10-K for the year ended
December 31, 2007, which is on file with the SEC and is available on
our investor relations website at investor.google.com and on the SEC
website at www.sec.gov. Additional information will also be set forth
in our report on Form 10-Q for the quarter ended March 31, 2008, which
will be filed with the SEC in May 2008. All information provided in
this release and in the attachments is as of April 17, 2008, and
should not be unduly relied on because Google undertakes no duty to
update this information.

ABOUT NON-GAAP FINANCIAL MEASURES

To supplement our consolidated financial statements, which statements
are prepared and presented in accordance with GAAP, we use the
following non-GAAP financial measures: non-GAAP operating income, non-
GAAP operating margin, non-GAAP net income, non-GAAP EPS and free cash
flow. The presentation of this financial information is not intended
to be considered in isolation or as a substitute for, or superior to,
the financial information prepared and presented in accordance with
GAAP. For more information on these non-GAAP financial measures,
please see the tables captioned “Reconciliations of non-GAAP results
of operations measures to the nearest comparable GAAP measures” and
“Reconciliation from net cash provided by operating activities to free
cash flow” included at the end of this release.

We use these non-GAAP financial measures for financial and operational
decision making and as a means to evaluate period-to-period
comparisons. Our management believes that these non-GAAP financial
measures provide meaningful supplemental information regarding our
performance and liquidity by excluding certain expenses and
expenditures that may not be indicative of our “recurring core
business operating results,” meaning our operating performance
excluding not only non-cash charges, such as stock-based compensation,
but also discrete cash charges that are infrequent in nature. We
believe that both management and investors benefit from referring to
these non-GAAP financial measures in assessing our performance and
when planning, forecasting and analyzing future periods. These non-
GAAP financial measures also facilitate management’s internal
comparisons to our historical performance and liquidity as well as
comparisons to our competitors’ operating results. We believe these
non-GAAP financial measures are useful to investors both because (1)
they allow for greater transparency with respect to key metrics used
by management in its financial and operational decision making and (2)
they are used by our institutional investors and the analyst community
to help them analyze the health of our business.

Non-GAAP operating income and operating margin. We define non-GAAP
operating income as operating income plus stock-based compensation.
Non-GAAP operating margin is defined as non-GAAP operating income
divided by revenues. Google considers these non-GAAP financial
measures to be useful metrics for management and investors because
they exclude the effect of stock-based compensation so that Google’s
management and investors can compare Google’s recurring core business
operating results over multiple periods. Because of varying available
valuation methodologies, subjective assumptions and the variety of
award types that companies can use under FAS 123R, Google’s management
believes that providing a non-GAAP financial measure that excludes
stock-based compensation allows investors to make meaningful
comparisons between Google’s recurring core business operating results
and those of other companies, as well as providing Google's management
with an important tool for financial and operational decision making
and for evaluating Google’s own recurring core business operating
results over different periods of time. There are a number of
limitations related to the use of non-GAAP operating income versus
operating income calculated in accordance with GAAP. First, non-GAAP
operating income excludes some costs, namely, stock-based
compensation, that are recurring. Stock-based compensation has been
and will continue to be for the foreseeable future a significant
recurring expense in Google’s business. Second, stock-based
compensation is an important part of our employees’ compensation and
impacts their performance. Third, the components of the costs that we
exclude in our calculation of non-GAAP operating income may differ
from the components that our peer companies exclude when they report
their results of operations. Management compensates for these
limitations by providing specific information regarding the GAAP
amounts excluded from non-GAAP operating income and evaluating non-
GAAP operating income together with operating income calculated in
accordance with GAAP.

Non-GAAP net income and EPS. We define non-GAAP net income as net
income plus stock-based compensation, less the related tax effects.
We define non-GAAP EPS as non-GAAP net income divided by the weighted
average shares, on a fully-diluted basis, outstanding as of March 31,
2008. We consider these non-GAAP financial measures to be a useful
metric for management and investors for the same reasons that Google
uses non-GAAP operating income and non-GAAP operating margin.
However, in order to provide a complete picture of our recurring core
business operating results, we exclude from non-GAAP net income and
non-GAAP EPS the tax effects associated with stock-based
compensation. Without excluding these tax effects, investors would
only see the gross effect that excluding these expenses had on our
operating results. The same limitations described above regarding
Google’s use of non-GAAP operating income and non-GAAP operating
margin apply to our use of non-GAAP net income and non-GAAP EPS.
Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from non-GAAP net
income and non-GAAP EPS and evaluating non-GAAP net income and non-
GAAP EPS together with net income and EPS calculated in accordance
with GAAP.

Free cash flow. We define free cash flow as net cash provided by
operating activities minus capital expenditures. We consider free
cash flow to be a liquidity measure that provides useful information
to management and investors about the amount of cash generated by the
business that, after the acquisition of property and equipment,
including information technology infrastructure and land and
buildings, can be used for strategic opportunities, including
investing in our business, making strategic acquisitions and
strengthening the balance sheet. Analysis of free cash flow also
facilitates management’s comparisons of our operating results to
competitors’ operating results. A limitation of using free cash flow
versus the GAAP measure of net cash provided by operating activities
as a means for evaluating Google is that free cash flow does not
represent the total increase or decrease in the cash balance from
operations for the period since it excludes cash used for capital
expenditures during the period. Our management compensates for this
limitation by providing information about our capital expenditures on
the face of the cash flow statement and under Management’s Discussion
and Analysis of Financial Condition and Results of Operations in our
Form 10-Q and Annual Report on Form 10-K. Google has computed free
cash flow using the same consistent method from quarter to quarter and
year to year.

The accompanying tables have more details on the GAAP financial
measures that are most directly comparable to non-GAAP financial
measures and the related reconciliations between these financial
measures.

Investor Contact:
Maria Shim
650-253-7663
marias@google.com

Media Contact:
Jon Murchinson
650-253-4437
jonm@google.com