Google 2015 Annual Report Download - page 18

Table of Contents Alphabet Inc. and Google Inc.
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Finally, since we conduct business in currencies other than U.S. dollars but report our financial results in U.S.
dollars, we face exposure to fluctuations in currency exchange rates. Although we hedge a portion of our international
currency exposure, significant fluctuations in exchange rates between the U.S. dollar and foreign currencies may
adversely affect our revenues and earnings. Additionally, hedging programs are inherently risky and could expose us
to additional risks that could adversely affect our financial condition and results of operations.
Our operating results may fluctuate, which makes our results difficult to predict and could cause our
results to fall short of expectations.
Our operating results may fluctuate as a result of a number of factors, many outside of our control. As a result,
comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our
past results as an indication of our future performance. Our quarterly, year-to-date, and annual expenses as a
percentage of our revenues may differ significantly from our historical or projected rates. Our operating results in future
quarters may fall below expectations. Any of these events could cause our stock price to fall. Each of the risk factors
listed in this section in addition to the following factors may affect our operating results:
• Our ability to continue to attract users to our websites and retain existing users on our websites.
• Our ability to monetize (or generate revenues from) traffic on Google websites and our Google Network
Members' websites both on desktop and mobile devices.
• Revenue fluctuations caused by changes in property mix, platform mix, and geographical mix.
• The amount of revenues and expenses generated and incurred in currencies other than U.S. dollars, and our
ability to manage the resulting risk through our foreign exchange risk management program.
• The amount and timing of operating costs and expenses and capital expenditures related to the maintenance
and expansion of our businesses, operations, and infrastructure.
• Our focus on long-term goals over short-term results.
• The results of our acquisitions and our investments in risky projects, including new businesses, products,
services, and technologies.
• Our ability to keep our websites operational at a reasonable cost and without service interruptions.
• Our ability to generate significant revenues from new products and services in which we have invested
considerable time and resources.
Because our business is changing and evolving, our historical operating results may not be useful to you in
predicting our future operating results. In addition, advertising spending has historically been cyclical in nature, reflecting
overall economic conditions, as well as budgeting and buying patterns. Also, user traffic tends to be seasonal. Our
rapid growth has tended to mask the cyclicality and seasonality of our business. As our growth rate has slowed, the
cyclicality and seasonality in our business has become more pronounced and caused our operating results to fluctuate.
If we were to lose the services of Larry, Sergey, Eric, Sundar, or other key personnel, we may not be able
to execute our business strategy.
Our future success depends in a large part upon the continued service of key members of our senior management
team. In particular, Larry Page and Sergey Brin are critical to the overall management of Alphabet and its subsidiaries,
and they, along with Sundar Pichai, the Chief Executive Officer of Google, play an important role in the development
of our technology. Along with our Executive Chairman Eric E. Schmidt, they also play a key role in maintaining our
culture and setting our strategic direction. All of our executive officers and key employees are at-will employees, and
we do not maintain any key-person life insurance policies. The loss of key personnel could seriously harm our business.
We rely on highly skilled personnel and, if we are unable to retain or motivate key personnel, hire qualified
personnel, or maintain our corporate culture, we may not be able to grow effectively.
Our performance largely depends on the talents and efforts of highly skilled individuals. Our future success
depends on our continuing ability to identify, hire, develop, motivate, and retain highly skilled personnel for all areas
of our organization. Competition in our industry for qualified employees is intense, and certain of our competitors have
directly targeted our employees. In addition, our compensation arrangements, such as our equity award programs,
may not always be successful in attracting new employees and retaining and motivating our existing employees. Our
continued ability to compete effectively depends on our ability to attract new employees and to retain and motivate
our existing employees.