Question
Refer to Googles income statement and the detailed revenue table contained in Note 1 to answer the following questions: How has Googles revenue mix changed
Refer to Googles income statement and the detailed revenue table contained in Note 1 to answer the following questions: How has Googles revenue mix changed since 2011 on a relative (i.e. percentage) basis? What is the largest contributor to total advertising revenue? On a percentage basis, what was Googles revenue growth in fiscal 2012 and in 2013? What effect would excluding Motorola Mobile revenue have on your analysis? Which type of advertising revenue is exhibiting the stronger growth trend?
Year Ended December 31, | ||||||||
2011 | 2012 | 2013 | ||||||
Revenues: | ||||||||
Google (advertising and other) | $ | 37,905 | $ | 46,039 | $ | 55,519 | ||
Motorola Mobile (hardware and other) | 0 | 4,136 | 4,306 | |||||
Total revenues | $ | 37,905 | $ | 50,175 | $ | 59,825 | ||
Costs and expenses: | ||||||||
Cost of revenues - Google (advertising and other) (1) | 13,188 | 17,176 | 21,993 | |||||
Cost of revenues - Motorola Mobile (hardware and other) (1) | 0 | 3,458 | 3,865 | |||||
Research and development (1) | 5,162 | 6,793 | 7,952 | |||||
Sales and marketing (1) | 4,589 | 6,143 | 7,253 | |||||
General and administrative (1) | 2,724 | 3,845 | 4,796 | |||||
Charge related to the resolution of Department of Justice investigation | 500 | 0 | 0 | |||||
Total costs and expenses | 26,163 | 37,415 | 45,859 | |||||
Income from operations | 11,742 | 12,760 | 13,966 | |||||
Interest and other income, net | 584 | 626 | 530 | |||||
Income from continuing operations before income taxes | 12,326 | 13,386 | 14,496 | |||||
Provision for income taxes | 2,589 | 2,598 | 2,282 | |||||
Net income from continuing operations | $ | 9,737 | $ | 10,788 | $ | 12,214 | ||
Net income (loss) from discontinued operations | 0 | (51 | 706 | |||||
Net income | $ | 9,737 | $ | 10,737 | $ | 12,920 | ||
Net income (loss) per share of Class A and Class B common stock - basic: | ||||||||
Continuing operations | $ | 30.17 | $ | 32.97 | $ | 36.7 | ||
Discontinued operations | 0 | (0.16 | 2.12 | |||||
Net income (loss) per share of Class A and Class B common stock - basic | $ | 30.17 | $ | 32.81 | $ | 38.82 | ||
Net income (loss) per share of Class A and Class B common stock - diluted: | ||||||||
Continuing operations | $ | 29.76 | $ | 32.46 | $ | 36.05 | ||
Discontinued operations | 0 | (0.15 | 2.08 | |||||
Net income (loss) per share of Class A and Class B common stock - diluted | $ | 29.76 | $ | 32.31 | $ | 38.13 | ||
(1) Includes stock-based compensation expense as follows: | ||||||||
Cost of revenues - Google (advertising and other) | $ | 249 | $ | 359 | $ | 469 | ||
Cost of revenues - Motorola Mobile (hardware and other) | 0 | 14 | 18 | |||||
Research and development | 1,061 | 1,325 | 1,717 | |||||
Sales and marketing | 361 | 498 | 578 | |||||
General and administrative | 303 | 453 | 486 | |||||
$ | 1,974 | $ | 2,649 | $ | 3,268 |
Note 1. Google Inc. and Summary of Significant Accounting Policies
| Year Ended December 31, | ||||||||||
| 2011 |
| 2012 |
| 2013 | ||||||
Google: |
|
|
|
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| ||||||
Advertising revenues: |
|
|
|
|
| ||||||
Google websites | $ | 26,145 |
| $ | 31,221 |
| $ | 37,422 | |||
Google Network Members' websites | 10,386 |
| 12,465 |
| 13,125 | ||||||
Total advertising revenues | 36,531 |
| 43,686 |
| 50,547 | ||||||
Other revenues | 1,374 |
| 2,353 |
| 4,972 | ||||||
Total Google revenues (advertising and other) | $ | 37,905 |
| $ | 46,039 |
| $ | 55,519 | |||
Motorola Mobile: |
|
|
|
|
| ||||||
Total Motorola Mobile revenues (hardware and other) | 0 |
| 4,136 |
| 4,306 | ||||||
Total revenues | $ | 37,905 |
| $ | 50,175 |
| $ | 59,825 |
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