Android revenue filing.

Here it is!

On Tue, Oct 12, 2010 at 4:45 PM, Alan Eagle <[email protected]> wrote:

Can you forward me the slide? It didn't come through in the attachment.

I have not gotten any response from Andy on the Android talking points I sent to him (you said you had talked to him in Dublin and gotten a good set of remarks), so this slide may be useful for that.

Alan

On Tue, Oct 12, 2010 at 11 :13 AM, Jonathan Rosenberg <[email protected]> wrote:

cathay, print for my binder. alan use for talking points in future

---------- Forwarded message ---------From: Andy Rubin <[email protected]> Date: Man, Oct 11, 2010 at 10:57 PM Subject: Re: BOD question To: Kristen Gil <[email protected]> Cc: [email protected]

Thank you. Happy to answer questions as necessary. Can make myself available for a demo as well.

-a

On Man, Oct 11, 2010 at 10:46 PM, Kristen Gil <[email protected]> wrote:

Hi Andy (cc: theOC),

Thanks again for putting this response together. Forwarding only to the OC (copied here) in preparation for the Board meeting.

Thanks, Kristen

---------- Forwarded message ---------From: Andy Rubin <[email protected]> Date: Sat, Oct 9, 2010 at 10:27 PM Subject: BOD question To: Kristen Gil <[email protected]>

Hi,

HIGHLY CONFIDENTIAL- ATTORNEY'S EYES ONLY Oracle America v. Google, 3:10-cv-03561-WHA GOOGLE-58-00035115

Trial Exhibit 431, of 6

UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF CALIFORNIA

TRIAL EXHIBITCASE NO. 10-03561 WHA

DATE ENTERED

BYDEPUTY CLERK

431

Enclosed are the slides for the BOD question #2. Please do not distribute -- these detail our partner strategy and control points for the product we created.

Kristen Gil M (650) 210-6615

Cathay Bi 1 Assistant to Jonathan Rosenberg 1 Google, Inc. 1 Google Voice: 650-450-9083

HIGHLY CONFIDENTIAL- ATTORNEY'S EYES ONLY Oracle America v. Google, 3:10-cv-03561-WHA GOOGLE-58-00035116


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The 5 Business Units each a $1 OB opportunity; Android and Chrome platforms critical assets for their success

Revenue 2010E 2013E

Search Coogle ~~ .......... ~

Personal Mobile

$23.2 8

$348 Specialized I

~Local

Display $3.98

ad mo'l:) $88 d• uble chck ad exchange

The $108 opportunity

Next $10B driven by search "resets"/innovation: o Personalization: est. $6B+ opportunity in search o Mobile/Local*: Mobile at $1 B run-rate; Yellow

pages listing market >$15B o Specialized searches: e.g. a 15% RPM gain in the

finance & travel verticals yields -$1 B add'l revenue (*Note: local coupons/offers included in Commerce)

o Online display a $23B market, to double in 5 years o Bet on spend shifting to audience buying o Today $300B offline spend ($170B TV/ $130B

print) in reach with new ad formats on tablets & GoogleTV

Assets Progress against opportunity

o Infrastructure, speed & share + Mobile on a tear o Best-in-world maps, GMM top + Local tags at 20K advertisers

1-3 app + • Emerald Sea executing, but viral o 5.5M claimed Places launch tactics unclear o ITA and other deep data feeds • Huge cross-org coordination required o Chrome browser growth • FaceBook-Bing users may bypass o >37M Android activations Google

o DFA/Invite/Teracent stack + DSP integration on track o -2M AdWords + Video and mobile on AdX soon

advertisers a display + 99% of top 1000 Google advertisers cross-sell oppty spend on Display

o AdX at the core • However, flat traffic to AFC/AdX o Audience/ search data • iAd & many others- crowded space

----------------------------------------------------------------------- ~ -A9~0B~Re~W9F~ --------------------------------------------

_....... $0.58 o Online video ad market $3B today, >$7B by 2012 o Massive reach, X M users + Ad innovations (TrueView) You~

--··· • .a . Google tv

Commerce ... ,.., lill ~~ ...

BOUTIQUES.com

Enterprise G.gggle

$58 o Larger opportunity in discovery/ personalization to o Multi-device platform: + • Leanback with Google TV, but deliver TV-like experience across devices Android phones, tablet discovery/ curating/ sharing weak - Can access $170B TV ad spend and GoogleTV • Need to step up content licensing

o $183B eCommerce ($10B+ digital goods) $0.18 o $937B in online-influenced offline purchases

$58 o Circulars & Coupons $25B mkt (Dir. mail total $50B) - Groupon est. $3B 2012

$0.78 $28

o Mobile payments market estimate $600B in 2015

o Targeting -$60B global opportunity -Enterprise SaaS market: 45% CAGR 10-13

o SMBs beginning to adopt the cloud

o PS 18% of shopping starts o 2.1 M Shopper app DLs o 4M local merchants via LBC o Android platform (17M

GED) I NFC soon

o Best cloud infrastructure o 30M 30DA users, 5M

activated domains o Google Apps Marketplace o Chrome & Android platforms

Platforms emerging as critical assets for each business unit 111 Android

deals, risk lock out

+ Shopping in execution mode + Books in 04, Video/Music in 01/02 • Amazon/Apple huge dig content lead + Mobile wallet 01- MC, FDC, Citi

committing $225M POS upgrades • Need Android GED growth

+ Newly hired leaders, dedicated FA + SMB product strategy being refined • Revenue growth rate disappointing • Microsoft fiercely defending turf

Chrome

Google Confidential and Proprietary


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BACK UP: 2013 estimates ($8)

Business ($B)

Search (incl. Mobile Search, Local, AFS)

Display (incl. AdMob, Platforms)

YouTube (incl. GoogleTV)

Commerce (including Product Search)

Enterprise

II

11

II

II

$100B (estimated in August 2009)

$30.7

$6.6

$4.2

$2.9 (did not include wallet)

$1.6

II

II

II

J

July 2010 OCQ -2013 estimate

Not estimated

Not estimated

$5.0 (YT-$2+,GTV-

$3)

$5.1-5.7

ll $2-6 TOTAL (excludes any other potential revenue from Android/Chrome)

~

Business Drivers (estimated in

May 2010)

$36.6

$8.5

YT- $1.8 GTV not est.

$5.2

$1.8

II

L

2013 Estimate chosen

$34

$8

$5

$5

$2

$558

Google Confidential and Proprietary 2


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BACK UP: [August 2009] $1008 Executive summary from OC meeting

Updated 5 year stretch projection brings revenue to $468 by 2013 with 19% CAGR; adding $24B revenue from 2009E.

Web Search a third of the growth with 10% CAGR, growing as fast as the online ad space despite declining RPMs. Forecast from finance.

Most of growth from building additional 7 businesses, each adding >$1 B over next 5 years. Forecasts from PMs may be aggressive based on current revenue/plans. Commerce has too many owners; social needs more investment (plans & people)

Local

Mobile

Enterprise

Social I Gmail

TOTAL:

"Search plus 8" businesses that matter to growth

(including Voice)

Behind in key regions with large ad markets. These include in order of size: Japan, China, South Korea, Brazil, Russia, Czech and Taiwan .

If forecasts are close to reality, then 97% of our revenue will still come from ads and consumer products. Most breakout ideas are non-ad related and could diversify revenue.

Not on trajectory to $100 billion in 5 years (-9 years vs 5 years at 19% cagr); Need breakout ideas/ M&A to close the gap

Many good breakout ideas in commerce and enterprise and other but require further definition and lack clear leadership at this time.

Google Confidential and Proprietary 3 3


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BACK UP: [May 201 0] Business Drivers Analysis- Current forecasts would result in -24°/o total revenue growth (09-13 CAGR) to -$56B by 2013

$80B ESTIMATE I

1 Forecast $70B ......

I _,

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$60B ::::l c $56.0B Q)

> $SOB Q)

0:::: Q) $40B 0) 0 0 $30B (9

$20B

$lOB

$0B

2009 2010F 2011E 2012E 2013E • ~earch $ 19.2 $ 22.3 $ 24.6 $ 27.5 $ 30.7

rn pis play $ 3.2 $ 4.0 $ 5.2 $ 6.72 $ 8.5

!'v1obile/ Android3 $ 0.3 $ 0.6 $ 1.0 $ 2.0 $ 3.4

ffouTube $ 0.3 $ 0.5 $ 0.8 $ 1.3 $ 1.8

~earch +Execute $ 23.0 $ 27.4 $ 31.7 $ 37.4 $ 44.4

ommerce (Digital Content) 4• 7 $ - $ - $ 0.5 $ 1.6 $ 3.5 note- early estimate, still WIP)

ommerce (Prod Ads) $ 0.0 $ 0.1 $ 0.5 $ 1.3 $ 1.7

ocal 6 $ 0.1 $ 0.3 $ 0.9 $ 1.7 $ 2.5

nterprise $ 0.3 $ 0.5 $ 0.7 $ 1.1 $ 1.8

hrome Hardware4 $ - $ - $ 0.3 $ 0.8 $ 1.6

onsumer Apps $ 0.1 $ 0.2 $ 0.2 $ 0.3 $ 0.5

pther5 $ 0.06 $ 0.04 $ 0.04 $ 0.04 $ 0.04

otal $ 23.6 $ 28.5 $ 34.8 $ 44.3 $ 56.0

~Search 81% 78% 71% 62% 55%

WOYGrowth 21% 22% 27%

Note: 1CAGR is ('10-'13) for Commerce, ('11 -'13) for Chrome Hardware; 22012 OCQ forecast for Display was $6.4B but didn 't account for investment in AFC-text or Adx traction; 'Excludes DTC and Apps (apps included in digital content); 4Margins are assumed to be much lower than other businesses (-0% EBITDA margin); 'Includes -20 line items from Hyperion, but excludes -$108M Android DTC Revenue in 2010; Local includes

26%

"Innovate/ Transform" Businesses

"Execute" Businesses

Search

YoY

16%

27%

89%

79%

19%

-

363%

118%

42%

-

57%

-32%

21%

('10-'11) ('09-'13) YoY CAGR

10% 12%

30% 28%

79% 84%

75% 61%

16% 18%

2320% 460%1

329% 189%

209% 105%

44% 55%

- 145%1

31% 41%

-5% -11%

22% 24%

revenue from Geo properties only, Local Search included in Search and Local Mobile Ads included in Mobile; 7Digital Content is GROSS revenue Google Confidential and Proprietary 4


Android revenue filing.

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Transcript of Android revenue filing.