Google's past projections revealed at trial

Reuters News
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Posted: Apr 25, 2012 6:03 PM
Google's past projections revealed at trial

By Dan Levine and Alexei Oreskovic

(Reuters) - Google Inc projected back in 2010 it would get more than 35 percent of its 2013 revenue from outside its flagship search operation, anticipating three non-search businesses, including e-commerce, would generate over $5 billion each, according to internal company documents filed in court.

Display advertising would generate $8 billion in revenue in 2013, e-commerce would bring in $5 billion, while YouTube and Google TV would combine for $5 billion, according to documents revealed during the high-stakes trial of Oracle Corp against Google over smartphone technology.

Search, meanwhile, had been pegged to generate $34 billion in 2013, the 2010 projections say. Company staffers compiled the wedocuments in October 2010 for a Google board presentation, according to testimony in U.S. District Court in San Francisco on Wednesday.

The documents provide a rare glimpse into Google's mindset in 2010, as the company does not break down the percentage of its revenue that comes from search advertising versus its other businesses.

Estimating the ratio is complicated because of the limited information Google discloses about its various businesses. Analysts' estimates for Google's non-search business currently range from 10 percent of the company's revenue to as much as 25 percent.

Google spokesman Jim Prosser said the documents do not represent current thinking about its business operations.

"Our industry continues to evolve incredibly fast and so do our aspirations for our various products and services," Prosser said.

Oracle has accused Google of violating its intellectual property rights to the Java programming language. An Oracle spokeswoman declined to comment on the figures.

Oracle attorney David Boies briefly referred to the documents on Wednesday while questioning Android mobile software chief Andy Rubin, but Boies did not delve into the projections. However, a full copy of the internal documents has been formally admitted into evidence in the case.

The 2010 documents show that Google's search business generated $19.2 billion in 2009, while the display business brought in $3.2 billion that year. YouTube made $300 million, while e-commerce brought in no revenue.

Enterprise software was projected to generate $2 billion in revenue in 2013. Overlaying all of the business units are Google's Android and Chrome platforms, the documents said.

"Android and Chrome platforms critical assets for their success," the documents say.

The case in U.S. District Court, Northern District of California, is Oracle America, Inc v. Google Inc, 10-3561.

(Additional reporting by Alistair Barr,; Editing by Edwin Chan and Phil Berlowitz)