Good day and welcome, everyone, to the Google Inc. conference call. Today's conference is being recorded. At this time, I would like to turn the call over to Maria Shim.

Good afternoon, everyone, and welcome Google's third quarter 2009 earnings follow up conference call. With us are Patrick Pichette, Chief Financial Officer, and Jonathan Rosenberg, Senior Vice President of Product Management. After we cover a few housekeeping items we will start taking questions from the moderator page, as we did on the last call. Also, this call is being Web cast from our Investor Relations Web site located at investor.google.com. Please refer to our Web site for important information, including our earnings press release and related slide deck. A replay of this call will also be available on our Web site in a few hours. Please note that we routinely post important information on our Investor Relations Web site located at investor.google.com and we encourage you to make use of that resource. As a reminder, the purpose of this follow-up call is to give participants the opportunity to ask more detailed financial and product questions in an efficient and Reg FD-compliant manner. Let me now quickly cover the safe harbor. Some of the statements we make today may be considered forward-looking and these statements involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this presentation and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Please refer to our SEC filings, including our annual report on Form 10-K for the year ended December 31, 2008, as well as our earnings press release for a more detailed description of the risk factors that may affect our results. Copies can be obtained from the SEC or by visiting the Investor Relations section of our Web site. Also, please note that certain financial measures we use on this call, such as operating profit and operating margin, are expressed on a non-GAAP basis and have been adjusted to exclude charges relating to stock-based compensation. We have also adjusted our net cash provided by operating activities to remove capital expenditures, which we refer to as free cash flow. Our GAAP results and GAAP to non-GAAP reconciliation can be found in our earnings press release. With that, we are going to take as many questions as we can accommodate.

We will start with a question from Mark Mahaney – Citigroup.

How can a company with $22.0 billion on the balance sheet in cash generate negative net interest income? How about cutting out the hedging program and buying back stock? That's a huge drag on your ROI.

It's obvious that the consequence of the last year is pulling through on OI&E. So just to give you how we're managing it is as soon as a couple of quarters ago, we were all in kind of very conservative portfolio in order to take the cash, given the economic situation. Since then, we have actually revised our investment strategy and have agreed to an investment portfolio for the long term. And we are in the process of actually moving out of that very conservative position we were, but there is an impact, obviously, because we're doing this on a gradual roll-out basis. We are not a money manager in the sense of moving money in and out of billions of dollars on a daily basis. That's not the business of Google, so our business is going to be to build a really good portfolio that ties back to the interests that our community and the board set, which is clearly much better than just staying on day-to-day sovereign-backed securities. So that is going to take a couple of quarters to roll out. In the meantime, we are on the operating income side, you are paying the price for it while we are migrating. We recognize that. But I would separate that. We will fix that, it's just going to take a couple of quarters and it's going to be fixed and then we will not be in the position we're in today. I think that overall I'm really pleased with the fact that we have protected our assets so well over the last year. On the flip side, on the hedging side, I think that our hedging is an insurance policy and if you look at, again, the last 12 months, it served us so incredibly well that there is a really good case to continue to invest the dollars we put there. And as volatility comes does, the costs are also going to come down. So hopefully that will also benefit us. So the net of these two things, I think that we have a very balanced strategy. I would love to be exactly where our target portfolio should be, but we have to do this in a disciplined manner so it's going to happen over a couple of quarters. And then from there we will be in a much more regular state. So from that perspective I think you are right, that the third quarter kind of illustrates a transition period. In terms of the last point of your question, I think Eric mentioned it very clearly on the call. So that's how we think of OI&E. And it's bound to change over the coming quarters.

The next question comes from Brian Pitz – UBS.

Could you broadly discuss Google's strategy regarding search distribution deals? Do you think you have reached a scale in terms of distribution to not overpay for these deals?

Let me talk about the first part because I think the first part of the question is the heart of the matter, which is we look at every distribution deal we can because it's good for the ecosystem. It's good for everybody; everybody makes money when you have a good distribution deal and in that context all we want to make sure is we have also discipline at making sure that when there is a deal it's a win-win. And I wouldn't comment that in the past anybody overpaid for anything. There may be deals that in hindsight didn't make sense and needed restructuring, but that doesn't mean that somebody overpaid. So in my mind right now we have a really good strategy of making sure that every partner we can bring onboard is a good partner and we have just got to make sure that everybody wins at it. So I'm actually quite pleased at the way that this is going and we hope to have even more partners in the future.

The next question is from Imran Khan - JP Morgan.

The tax rate was 21%. How should we think about the tax rate going forward?

Tax continues to be quite elusive for many of the analysts that have models because of all of the factors that are at play in taxes. So FX is a big issue for our taxes and also the hedging program and how it flows through the tax effect. So we are pleased to have 21% but we really can't comment about the future because it's so dependent on these big variables and will affect us.

The next question comes from Heath Terry – FBR.

You mentioned that mobile search volumes grew 30% quarter-over-quarter. Can you give us a sense of monetization levels of mobile search queries versus a traditional search query and what kind of trends you're seeing in mobile search monetization?

We don't really comment specifically on the monetization statistics of mobile versus desk top. I can certainly say that from a search traffic perspective, search traffic volume is being very nicely driven on mobile by smart phone adoption. In some markets, like in Japan, mobile searches are growing twice as fast as desk top searches over the last year or so. Eric mentioned that advertisers are seeing value and taking advantage of new Google ads products and I think in the long run mobile is really going to emerge as one of those. I think right now what we see is that advertisers are typically just extending their campaigns into mobile and they're not doing as much customization with the campaigns on the mobile side because there's not as much volume there, but as they start seeing more volume they'll customize the campaigns better, which will make the whole ad network work better. I think the other thing we're seeing is that display seems to work very well on some of these devices and I think that's because of the level of engagement that a user has when they're staring at a cell phone and actually seeing a display ad. They tend to notice it more, and unlike when they're on a desk top machine, they're less like to click away from it. So there's much more of a dynamic of forced engagement with display. So I think we're quite optimistic there about AdSense on the high-end mobile devices.

The next question comes from Scott Devitt – Morgan Stanley.

How is Google managing to growth a vertical search platform, particularly in the retail category and should we expect more direct investment in vertical areas such as base product cards check out or a more horizontal approach?

The strategy certainly depends a lot on verticals, so product search and shopping is certainly one where we are particularly focused at the moment. We are continuing to improve the shopping vertical. We launched the find-nearby store, which is the first local shopping feature recently. We are also trying to have a much more visual shopping-one-box. If you type in "chrome toaster" you will see the shopping-one-box and how that works. We are doing well with checkout, there's a payment platform there and I think we're starting to get more focused on some of the other verticals. We have always done well in images. You're certainly aware of the works that we're doing in books. We have made more progress with help. We just launched the poison-control-one-box. Real estate, finance, and travel are also other areas that we're going to get quite focused on and obviously we will also continue to improve Google horizontally.

The next question comes from Colin Gillis – Brigantine.

Can you talk to the value of mobile clicks compared to desk top clicks and specific verticals where the value is much higher.

I think that the dynamics are very different, if you think about it, and it all relates to the probability that the user is actually going to consummate a transaction. So if you're searching locally for a restaurant or a coffee shop, then the value of a click is different from a desk top and in some cases you don't get credit for the click because the user just walks in the store. And so I think we're still sorting some of that out.

The next question comes from Jeetil Patel - Deutsche Bank Securities.

It is quite commendable that Google is not micro managing its business based on margin percentages. That said, should we think about the business from the standpoint of a cash flow dollar target three, five, seven years out, or a sustainable cash flow growth rate?

Let me just give a bit more comment to what I said on the previous call, which is obviously the focus of the company is on innovation, innovating products that actually serve users and benefit also our advertisers. And so from that perspective the only point we wanted to make on the previous call that is worth restating is that if there were an area where we needed to invest heavily in the short term in order to really fuel growth in a specific area we have the means to do it. And Google wouldn't kind of worry for a quarter, a couple of quarters, if it really was the right strategic decision, to kind of say what's going to be our percentage margin impact. We're here to build businesses and in that sense you have a positive mindset of instead of being stuck in margin land, which most companies live in, we can actually be in the land of capturing opportunities. And for us, that's so much more powerful. So just for an illustration, rather than to make the case for one, if Android continues to have all the runway that it's having right now, you know you go from one handset with one provider in one country to the stats that we shared with you a bit earlier, with like 25 countries and 30 handsets or whichever it was. Maybe the reversal. But it's so much more, if we had that kind of invest in those areas and the question became what's going to the percentage margin, we would never ask that question. And that's why I think we answer that question the way we do, I think that clearly Google is generating a healthy amount of cash and we are really pleased by that and that gives us the strategic to have the freedom to actually do the kinds of things that Eric talked about a bit earlier. So that's really how we think about the business. It's about growth, it's about users, and it's about partners or advertisers. And that's how we think about the business.

The next question comes from James Mitchell - Goldman Sachs.

Given the sharp sequential improvement in revenue, did Google also sharply increase bonus accruals?

We had to do some additional accruals—James, I think that's a good catch. Many of you always ask us about these kind of bonus accruals. In Q3 the performance was such that we had to do a bit of catch-up on accruals and that's what we meant when we talked in our comments that part of the quarter-over-quarter increase in expenses went to that as well. But it also went to a couple of other items that I mentioned, like real estate and equipment. So, yes, absolutely we had to have some accrual impact.

The next question comes from Benjamin Schachter - Broadpoint Am Tech.

When can we expect to see the CPA model more broadly deployed on Google.com?

The conversion optimizer product is actually a CPA pricing model and we're using it pretty broadly. I think we announced this quarter that it's managing over a billion in annual spend and it's driving pretty good results for the advertisers. They use it to get more conversions and manage it to a lower CPA. We are running some experiments but I think some blogs may have picked up on CPA-based pricing models for some product-focused advertisement and these are generally running on the Google affiliate network on Google.com. I can't comment too much on how that's going until it launches a little bit more broadly.

The next question comes from Wayne Chang - Canaccord Adams.

For the greater willingness to add more heads to staff and invest in the company, could you comment on how aggressive that ramp may look like in 2010 and are there distinct areas you are looking to pull talent?

The bottleneck becomes finding great talent that fits with the culture. And so we have ramped up our hiring practices and our pipelines we hope, so we won't give you specific numbers. But what I can tell you is we are ramping up our pipelines to make sure that we have access. And we also think that in this kind of economic environment there is a great opportunity to actually get great talent as well, so we should capitalize on that as much as possible. Where we're going to invest them, I think Eric made the point that he hopes to have a 50% engineering and then 50% everything else. So it's just a rule of thumb that we use that because this is an engineering-driven company with innovation at its core, it's really important that the bulk of the hiring that we're looking for is in the engineering talent and they will be applied to all of our priority areas and they, yes, include mobile, video, but also search because search continues to be the next billion dollar business as well. And we have a such a healthy agenda on that one as well. So that's how to think about it.

Your next question comes from Heath Terry – FBR.

What kind of advantages does the Double Click ad exchange offer over other ad exchanges? How does it stand from a standpoint of advertisers and publishers?

We are really focused more on our customer needs I think than a specific competitive set per se. We think there is a huge opportunity, as I think we have told you about, to create this open ecosystem where buyers and sellers can meet and transact. One of the exciting features is that we're actually able to do this and seamlessly integrate AdWords, advertisers, and AdSense publishers and all of the Double Click advertisers and publishers, which has been part of the vision from the acquisition at the beginning. We are also trying to get very, very fast in real time so you actually have real time bidding for buyers, real time yield management across all of the publisher channels and helping things clear properly, so we are very optimistic about how things are going there.

The next question comes from Sandeep Aggarwal - Collins Stewart.

What were the trends for search spend by small- and medium-sized advertisers during the quarter?

I think in general we saw fewer macroeconomic effects with the small- and medium-sized advertisers, from the beginning of the recession than we saw with large advertisers. Larger advertisers, I think, were faster to cut as the recession began and they were stronger and faster to rebound as things came back. So the main trend that I think we saw that characterized the last quarter was the larger advertisers coming back. Patrick is that correct?

That is correct. That's why we emphasized it because you will remember we discussed in Q1 and Q2 how the big advertiser had pulled back out and the small-medium businesses were kind of holding their own. And what really we saw in Q3 was the big advertisers depending on the verticals again and depending on the geographies. So not everything is the same everywhere, but these are the ones that made quite a significant difference in the quarter.

The next question comes from Richard Fetyko of Merriman Curhan Ford.

What are your intentions with the acquisition of [Antou]?

[Antou] is a publicly traded company and the deal hasn't closed. So I don't think we can answer that.

That's right. So in Q4. Wait for the after the closing and ask us the question again.

Yes, we'll keep improving video quality and delivery.

The next question comes from Mark May - Needham & Company.

Please provide more color on your hiring plans. What functional areas of geographies will be most impacted?

Again, rather than to give you a specific answer, I think that if I were an analyst kind of thinking through our own models, the next billion dollars of revenue doesn't require linear hiring in finance. So it really is about innovation. So I think that you can think through our organization and think through, if we really want to focus in the areas of engineering and the areas of sales and support, then it tells you really where we're going to focus our hiring. And then obviously there are a number of other areas that we will continue to grow just because with more businesses you have the complexity of more businesses, so you do need the more lawyers, you need the more of this and the more of that, but the real bulk of it is really in the engineering community and in the sales and support community that really drive these ecosystems. That's how we're thinking about it.

The next question comes from Jeffrey Lindsay - Sanford C. Bernstein.

Did you enter into a financial agreement with Verizon such as a rough sharing order to persuade to accept Android phones or did they elect to select Android without a financial incentive?

What we announced was a strategic agreement to deliver mobile devices to consumers based on the wonderful open-source Android operating system we have which is going to be serviced and towered by Verizon's great nationwide network. We don't comment on specifics of the deal. But I think we certainly collect that we have the same goals of getting some of these great peer net connected smart phones into the hands of consumers.

Your next question comes from Jim Friedland – Cowen & Company.

How will you be accounting for advertising revenues on the ad exchange?

Why don't we get back to you? I'm pretty sure we're doing it on a gross basis, but why don't we get back to you.

The next question comes from Imran Khan - JP Morgan.

How much of your sequential growth was driven by Ad Auality improvement?

Again, we don't tend to break that out. We had a very good quarter from Ad Quality's perspective. I can tell you the significant things that we did. The biggest things, probably in order, or close to order, were the UI tweaks that we did for results pages. We changed the maximum width, decreasing the spacing between the search results and the right hand side ads on wide screen. With that it increased the click-through rate on the right hand side ads and I think we did that some time around the second week in August. We also had some significant ad improvements like site links that basically allow additional links to categorize and deeper advertisers of a site, which you can see if you run a query on something like Chevy, you'll see the Silverado, the Malibu, you will see more information there, which increased click-through rates. We also did some more work on showing more goods at good ads and expanded match. But we don't give a specific sense of exactly the percentage that that resulted in. The more significant of the changes occurred in mid-August.

The next question comes from Doug Anmuth - Barclays Capital.

As the dollar has weakened, how are you thinking about your hedging program? Will you scale it down going forward? Was the declining quarter cost of hedging in Q3 due to less volatility or less exposure?

Let me answer your question in kind of two or three different ways. First is clearly there was less volatility in Q3 and we had taken, you'll remember in Q2 because there was so much more volatility in Q1 and Q2, we had taken a lot more because of FAS 133. Of these hedging costs through the P&L at that time, and therefore less volatility in Q3. With the combination of less volatility and already taken big write-downs, created less expenses for the quarter itself. That's on piece. Going forward, if international revenue continues to grow, it will create more exposure for us and in that sense we will require more attention on the hedging side. That's how to think about the second part of your question. And the question of are we scaling it back, will be scale it back, clearly not in the sense that when you look at all the benefits we gained last year from this program, it is seen as insurance. It's matters as insurance and therefore there is no plan on scaling it. Having said that, there is a plan for review of it on a constant basis and formally, annually, as we build our plan forward and we go back, if there are areas where we can actually be smarter in terms of more deductibles, if you have less volatility, like there's a science to this, it's not a blind exercise, and we are running an optimum curve where there's actually a specific point where we're trying to manage to. And you try to minimize the cost, obviously, for the maximum benefits. And that's how we're thinking about it and that's how we'll manage going forward. And then in general, about the dollar weakening, I think there may be, for anybody who has a perception that the dollar is going to continue to weaken over the coming two or three or four years, if you made that case, then you would say you don't need your hedging program. And that's the danger that every hedging program falls into, which is people will say why are you investing this much this quarter into a hedging program that has no benefit because I know the dollar is only going to weaken, and then the next thing you know you have a crisis like we had last year and then they say where's your hedging program. So it is insurance, it's part of doing business and in a business like ours, and I will refer you back to the very first two points I've made, which is it's about finding that optimal point, making sure that we're finding the best economic value for these hedging programs, and then it will be driven a lot by the market itself and the exposures we have. But we're putting a lot of science into this.

The next question comes from Wayne Chang - Canaccord Adams.

Could you comment on the level of monetization changes to YouTube and future thoughts on aligning the strategicals for video to over the top distribution.

I guess I don't know exactly what over the top distribution means but I certainly know a lot about what's going on from a monetization perspective on YouTube. So let me try to focus on that. I think we've said before we're monetizing more than a billion views every week and these monetizable views have increased more than three times in the last year. So the model there is making partners money and the success of content to idea over the course of the last several months has been a big part of that. Usage and traffic continues to be very, very strong and we are now doing a good job of monetizing across the four activities that Chad tends to refer to on the site. The home page ads are going great. We have sold out the U.S. YouTube home page over significant periods of time. We are making great progress on the search videos. If you look at the promoted videos on the right hand side, if you put in a query for something like soccer, the watch videos with the in-stream ads are going well, and we're getting some interesting videos uploaded and better engagement with the user community. If you take a look at the Quaker Oats contest that's running now on awakening your senses challenges, we're seeing a lot of interest there. So I think across the board things are going very well from a monetization perspective with YouTube.

Your next question comes from Jeetil Patel - Deutsche Bank Securities.

With the strong gains you are seeing in the display ad business, can you discuss whether these gains are a function of share gains and online display ads or do these dollars represent new dollars being allocated to the Internet from offline.

We certainly talked about how happy we are with the growth of the display business. We don't typically comment on our market share. I do think display has a huge potential. I think our goal is to obviously help the overall pie grow and I think we have succeeded because we're offering great performance to advertisers and we are going to continue to grow revenue for our publishers. I think significant portions of dollars are coming offline to online.

Your next question comes from Jeffrey Lindsay - Sanford C. Bernstein.

Is search on mobile devices cannibalistic to PC search or is it additive?

I think that the most exciting thing about mobile is that even though there may be on the margin some stuff that is kind of overlap, it's essentially a new space. And because it's a new space and there has been a lot of research done on this, and there was one, for example, there was one research that I read not long ago where by the end of 2011 or the end of 2012 that the research talks about smart phones surpassing the global PC in sales. So you end up in a world where like it's an "and" world rather than an "or" world where you live very differently with your mobile device than the PC.

I think that the intuitive way to think about it is really that it's largely non-cannibalistic because think about it, having search with you at all times basically opens up new opportunities no matter where you are at the time of day. So certainly a search that somebody was able to do because they had their mobile phone with them when they were away from their desktop is unlikely to be cannibalistic. The other thing that we can actually see in the data is the complimentary aspect of the usage patterns across time of day and day of week. You see mobile usage increase in the middle of the day at lunch, you see it increase after work, you see it increase over the weekend. So I think some of those dynamics suggest that it's largely not cannibalistic but we need to continue to gather data there to better understand it.

Your next question comes from Benjamin Schachter - Broadpoint Am Tech.

Will we see more video ads within the Google search pages and how will the YouTube sales force work with the existing bidding system for Google.com?

We are definitely show more videos on Google.com. Like we have that plus box now and you can see it on some queries. Typically the queries that you see it on today are limited to entertainment and movies. I think there are some good product demonstrations. Type in "astro boy." I think that's an example that will generate one of the plus boxes. So I think we're pretty encourage by the user and the advertiser responses there and we're going to keep investing in expanding that some more. I think that we want those formats ultimately to merge with the YouTube efforts from a sales and product perspective, which we're working to do.

Your next question comes from Sandeep Aggarwal - Collins Stewart.

What are the top three hurdles Google needs to cross to be a significant player in display advertising?

I think we covered some of those already. I think that we talked on the first call, you've got to make it easier for the advertisers to run their campaign. We've got to get the demand for the publisher ad inventory. I think publishers are mostly interested in forecasting, they want to extract the maximum value from the inventory that they have, they want to be able to use products like Network Builder much more easily to manage their inventory across all of their sites. On the other side, the advertisers basically want to use products like the ad planner product so they can get much better at targeting relative to specific audiences. We launched demographic data in Ad Planner for nine or ten markets this last quarter, adding the U.K., France, Japan, Brazil, Australia and others. So I think it's just basically an effort around fixing what historically has been a very fractured and complex ad ecosystem and making it easier for the advertisers and the publishers to engage and thereby grow the pie for everyone.

The way the question is written, I think that it is important to understand that in many ways Google is a very significant player in this play today. The question is, it is a model that is very fragmented. It's a model that really has a ton of inefficiencies and many people would like to participate in the model, if there were an exchange, if there were a place where a publisher could actually interact on an efficient basis. From that perspective. I think it really is a story about fixing an industry that is really cumbersome in a lot of upside rather than a story of are we catching up in some way, shape or form.

Your next question comes from Christa Quarles - Thomas Weisel Partners.

On the display side we hear from marketers and agencies that they are interested in products that are not IAB standard, i.e. screen takeovers. How important is this business for you and how does it compliment what you're doing on the exchange?

Well, we're trying to build display products for all advertisers out there, both on the branded side and on the performance display side, so obviously we want to support creativity as part of our strategy in everything that we do. We have been working on a bunch of tools focused on this, within Double Click as well as within AdWords. The Double Click rich media studio basically being the main focus. So we are going to keep building and differentiating the products and trying to find ways to bring more accountability, showcase the ROI, and let the advertisers and publishers benefit from our innovations there. Exactly how that will manifest itself in terms of what may today may be non-IAB standard formats, I can't say.

Your next question comes from Youssef Squali - Jefferies & Co.

How does the Google exchange differ from others like Right Media, and how does Google overcome the lack of Tier 1 inventory?

I believe that the exchange will have all types of inventory including Tier 1 inventory. It's plain and simple.

Your next question comes from Jim Friedland – Cowen & Company.

Again, a follow-up to Jonathan's comment that display is compelling in the mobile environment. If mobile display is a material opportunity would the company consider monetizing Google products such as Gmail on mobile via display ads.

Would we consider something? Sure, we would consider something. I think that mail on mobile may be a little bit more difficult to aggressively monetize, again, because you're dealing with the small screen size there and it's a little bit more difficult to find adjacent room that doesn't get in the way of a mail message. Certainly we're open to better ways of doing display on the mobile devices. It's not immediately obvious to me, intuitively, that Gmail would me a more monetizable opportunity on mobile devices than it is on desktop devices. But we're certainly going to watch and see how mobile plays out. There are some good examples there with popular apps, Urban Spoon, Shazam, and other, where I think we can get a sense of how some ad formats work and see whether or not there are opportunities there. I would be hesitant to really launch functionality that significantly adverses people's ability to read their mail.

Your next question comes from Christa Quarles - Thomas Weisel Partners.

Other cost of revenue, excluding depreciation, which was 5.7% of gross revenues which is quite a bit lower from a year ago. Can you provide an explanation? Is YouTube more efficient or are you reserving costs lower?

The answer is yes. So, we are more efficient, and even depreciation, if you look at depreciation quarter-over-quarter and year-over-year, essentially when Eric talked a bit earlier about the fact that we really, over the last year from an architectural point of view, did a number of changes to be much more efficient, we got the benefits of that. And we get the benefits on the machine utilization but we also get it on the network side. So overall, you see it both in the opex side as well as the depreciation side. So it is part of the puzzle for that category, so I'm really happy that we're continuing to push hard in that area.

Your next question comes from Mark Mahaney – Citigroup.

Have Sergey and Larry's roles within the company changed materially over the past two years? Are they still as actively involved as in the past?

They're still my boss. I guess really the most significant change, probably for you all, is that they're not on the earnings call, which they were in the past. But generally I think they're just as engaged and involved in the state of the business as they always have been. I think as a management team we're trying to do a better job of dividing and conquering across different products and different applications so I think many of the folks on Eric's management team are more specifically focused on particular areas. Sergey, for example, is diving deep on the social side. Larry is very involved in Chrome OS and Android. So I think they continue to be very, very much engaged. I think that all of us on the management team are trying to get focused on specific efforts within the business because the businesses now are so large that we can't all focus on everything.

But I think it's fair to say that they are incredibly involved. I mean, in my mind, these two founders, we see them daily, we see them through the week. On the areas where they are focused, they are incredibly focused. They are very present. I get—Larry to this day continues to review every hire every week. There is a presence and an active presence from both of them that continues to be incredibly energizing because it's so great to work day-to-day with these people. So it's not a question of, don't assume because they're not on the earnings call that they're somewhere off and they're half checked out. They're here. We're on email with Larry. I couldn't believe, I sent something to Larry the other day and like an hour later, this was on Sunday morning, and then we're chatting away. That's the level of involvement these two founders are. And they're setting the direction of the company, leading the company. And in the areas where they really have their forte, they dig deep on an everyday basis.

And they still review every job offer.

So that gives you a sense of perspective of their involvement. Thanks for asking that question because I think it is really—people kind of always question that but I think it's really at the heart of why Google is so special.

Your next question comes from Jeffrey Lindsay - Sanford C. Bernstein.

How far off is the possibility of you [inaudible] targeting a Double Click.

We can take another question because I'm not going to comment on future direction there. It's not something we're currently working on.

Your final question comes from Imran Khan - JP Morgan.

Can you please give us some color on what kind of trends you are seeing in the U.K. Can you help us with play click and CPC trends in the U.K.?

We can talk geographically about the U.K. We saw a decline year-over-year but you saw an increase, also, quarter-over-quarter for the U.K. Primarily due to FX because of the big changes, decline since last year. And then the same thing for quarter-over-quarter. I think that in general the U.K. continues to perform pretty well. In the grand scheme of things, given the tough economic environment that they have seen in the last little while, you would have thought that they would have been a major pullback. But the search continues to be there and the key verticals that are driving the U.K. continue to be doing relatively well. So I think that there are signs of increasing consumer confidence and you think of Q3, Q4, the travel vertical or the retail vertical, they did kind of okay. So it's not like the U.K. is in a nose dive. The U.K. is holding its own is the best way to portray it.

Thanks everyone for joining us today. If you have any follow-ups please let us know. Thank you.

This concludes today’s conference call.