Free Writing Prospectus
Google Confidential and Proprietary
1
Transferable Stock Options
Showing You The Money
Filed by Google Inc.
Pursuant to Rule 433 under the Securities Act of 1933
Registration Statement on Form S-3: No 333-142243


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Google Confidential and Proprietary
About This Material
Google has filed a registration statement (including a prospectus)
with the SEC for the offering to which this communication relates.
Before you invest, you should read the prospectus in that registration
statement and other documents Google has filed with the SEC for
more complete information about Google and this offering.
You may get these documents for free by visiting EDGAR on the SEC
Web site at www.sec.gov.
Alternatively,
Google
will
arrange
to
send
you
the
prospectus
if
you
request it by calling toll-free 1-866-468-4664 or sending an e-mail
to investors@google.com.


3
Google Confidential and Proprietary
Introduction and Key Takeaways
Google’s Equity Philosophy and Practices
Transferable Stock Options
Pulling it All Together
Agenda


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Google Confidential and Proprietary
Introduction to Today’s Conversation
8,000 Googlers have joined us since the Transferable Stock
Option (TSO) program launched
We want Googlers to better understand the value of their
equity and how the TSO program works
We want to provide Googlers an opportunity to ask questions
about our equity practices and the TSO program
WHAT TO WALK AWAY WITH…
1.
Equity is a key component of Google’s compensation philosophy and a
valuable part of our overall compensation package
2.
Google
targets
the
market
90
th
percentile for new hire and ongoing
equity grants
3.
Always consider the TSO program when liquidating options.  With
TSOs
Googlers have received over $40M in additional value over non-
transferable stock options


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Google Confidential and Proprietary
Introduction and Key Takeaways
Google’s Equity Philosophy and Practices
Compensation Philosophy
Target Market Positioning
Types of Grants
Vehicles We Use
Transferable Stock Options
Pulling it All Together
Agenda


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Google Confidential and Proprietary
Google’s Compensation Philosophy
Google strives to pay Googlers in ways that support three
main objectives:
1.
Attract and retain the world’s best talent
2.
Support Google’s culture of innovation and
performance with compensation programs that reward
our best performers
3.
Align employee interests with shareholder interests in
the overall success of the company
These three objectives provide the
philosophical underpinning for every Google
compensation program worldwide.


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Google Confidential and Proprietary
Google’s use of equity supports all three
philosophical objectives
1.
Attract and retain the
world’s best talent
2.
Support Google’s culture
of innovation and
performance
3.
Align employee interests
with shareholder
interests in the overall
success of the company
Significant new hire
and annual refresh
grants at all levels
Provide multi-year
incentive payout
COMPENSATION PHILOSOPHY
ROLE OF EQUITY
Performance based
grants
Supports ownership
culture
Award value increases
as stock price increases


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Google Confidential and Proprietary
Google targets very competitive positioning
in every element of compensation
We aim to provide a highly market competitive compensation
package for each job at Google
90
th
Equity
75
th
Total Target
Cash
75
th
Base
High Tech
Market Percentile
GOOGLE TARGET MARKET POSITIONING
An annual benchmarking process
ensures that our target pay levels
reflect our desired market positioning.


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Google Confidential and Proprietary
Google makes three types of equity grants
Varies by grant
•GSUs
Recognize audacious
accomplishments (e.g.,
Founder’s Awards)
Special
Target grant
guidelines determined
by level and location
High performers
modeled to receive
larger grants
Primarily
Options
Refresh Googler’s
equity
stake in the company
Reward on-going high
performance
Refresher
Standard grants by
level and locations
GSUs are performance
vested
Value
Options
GSUs
Provide a meaningful
“staking”
grant to new
employees
Offer competitive packages
to new hires
New Hire
Vehicles*
Purpose
Grant Type
1
2
3
Our grant practices result in overlapping vesting
cycles and significant cascading value for Googlers.
* Options / GSUs
are
not
available
in
all
countries
due
to
local
tax
and
securities
regulations.


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Google Confidential and Proprietary
Google grants two types of equity –
Google Stock Units (GSU) and Stock Options
Our intent is to utilize both vehicles in every country we operate
in (subject to local tax and securities laws).
1.
Google Stock Units (GSUs)
GSUs are an agreement to give you a share of Google stock when
the unit vests
2.
Stock Options
Stock options are an agreement to let you buy a share of Google
stock at a fixed price within a 10-year period, so long as the
options have vested and you are a full-time employee
To further enhance the value of our equity
programs, Google developed the world’s
first Transferable Stock Option program.


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Google Confidential and Proprietary
Introduction and Key Takeaways
Google’s Equity Philosophy and Practices
Transferable Stock Options
Pulling it All Together
Agenda


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Google Confidential and Proprietary
Employees & investors value options differently…
Employees, accountants/shareholders and the financial
markets perceive option values differently.
Employees value
what they can
monetize. 
We needed a
solution to allow
Googlers to value
options even if
the “in the
money”
value
was $0.


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Google Confidential and Proprietary
…so we developed a system to allow
Googlers to sell options like investors
Google developed an online auction with Morgan Stanley
allowing employees to transfer their vested stock options in
real time to other investors
Institutional
investors
will
pay
the
full
“fair
value”
today
for
the
rights to purchase both the:
Intrinsic value of options (“in the money”
value), and
Time-value of options (potential future upside)
Bidders submit streaming real-time bids through Morgan
Stanley’s auction tool to all eligible stock options at all strike
prices during
Normal market trading hours
Google’s open trading windows (closes 1-hour before market
on last day of window)


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Google Confidential and Proprietary
TSOs
allow Googlers to benefit from both the
intrinsic and time value of an option
INTRINSIC VS TIME VALUE OF OPTION
$550
$500
$450
$400
$0
0
6
12
18
24
30
36
Months
TSOs
help the time value of an option
become more tangible to Googlers.
Option granted
at $450 per
share grant price
However investors are willing to pay a premium for
the 2 years of additional time-value of the option
At vest, intrinsic value
of option is $0 because
grant price > current
stock price


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Google Confidential and Proprietary
TSO provide value even when options are underwater
IN-THE-MONEY VS. TSO VALUE OF OPTION


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Google Confidential and Proprietary
In 1H2008 Googlers received additional value from
TSOs
at a wide range of stock prices
ACTUAL Q1/Q2 2008 TSO TRANSACTIONS*
Options with $508.01 strike price
* Reflects 847 TSO transactions from 1/1/2008 to 6/30/2008 for options with a $508.01 strike price.
In less than two years, ~12,000 TSO transactions
have produced $42.7M in value for Googlers over
the “in-the-money”
value of their options.
Exercise Price:
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
($100)
($80)
($60)
($40)
($20)
$0
$20
$40
$60
$80
$100
Non-TSO Value:
Example –
Exercise Price = Strike Price
Exercise Price = $508.00
Non-TSO Value = ($0.01)
TSO Value = $115.80
TSO Premium = $115.81
Example –
Underwater Option
Exercise Price = $455.00
Non-TSO Value = ($53.01)
TSO Value = $84.20
TSO Premium = $137.21
Example –
In the Money Option
Exercise Price = $600.65
Non-TSO Value = $92.64
TSO Value = $179.70
TSO Premium = $87.06
$408.01
$428.01
$448.01
$468.01
$488.01
$508.01
$528.01
$548.01
$568.01
$588.01
$608.01


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Google Confidential and Proprietary
The On-Line Equity Tool allows Googlers to
view the value of their equity
Available at go/getcomp


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Google Confidential and Proprietary
Additional TSO Program Information
TSOs
only
transfer
up
to
two
years
of
the
remaining
option
life
At less than 24 months, the option truncates to 18 months
At less than 18 months, the option truncates to 12 months
At less than 12 months, the option truncates to 6 months
At less than 6 months, the option is now only eligible for
traditional exercise
Which options are TSO eligible?  Only those that are:
Vested
Granted after Google went public
Nonqualified Stock Options (“NSOs”)
Granted to non-EMG members


19
Google Confidential and Proprietary
Introduction and Key Takeaways
Google’s Equity Philosophy and Practices
Transferable Stock Options
Pulling it All Together
Agenda


20
Google Confidential and Proprietary
Pulling It All Together
WHAT TO WALK AWAY WITH…
1.
Equity is a key component of Google’s compensation
philosophy and a valuable part of our overall compensation
package
2.
Google targets the market 90th percentile for new hire and
on-going equity grants
3.
Always consider
the TSO program when liquidating options. 
With TSOs
Googlers have received over $40M in additional
value over non-transferable stock options


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Google Confidential and Proprietary
Any questions?