Facebook announced the IPO this afternoon, offering 421,233,615 shares of its common stock at a price to the public of $38 per share, putting it at about $16 billion, and valuing the company at over $104 billion. Facebook says shares will begin trading on the NASDAQ under the symbol “FB.” The company is offering 180,000,000 shares of Class A common stock. Selling stockholders are offering 241,233,615 shares of Class A common stock. According to the New York Times, it’s the third largest public offering in the history of the U.S. (just behind GM and Visa). Wow. I hope it doesn’t become the next Myspace. As a quick refresher, here’s what the company listed as risk factors. Facebook says closing of the offering is expected to occur on May 22 (subject to customary closing conditions). The company and stockholders have granted the underwriters a 30-day option to purchase up to 63,185,042 additional shares of Class A common stock “to cover over-allotments, if any.” The IPO ‘s book runners are: Morgan Stanley, J.P. Morgan, Goldman, Sachs & Co., BofA Merrill Lynch, Barclays, Allen & Company LLC, Citigroup, Credit Suisse and Deutsche Bank Securities. RBC Capital Markets and Wells Fargo Securities are serving as active co-managers.

As previously reported, Demand Media released its Q1 earnings report today, beating estimates. During the company’s last earnings call, the company indicated that eHow had not been impacted by a Google algorithm change since July. It would appear that this has remained the case, through Q1. CEO Richard Rosenblatt discussed eHow’s progress during the company’s earnings call. It was the second quarter in a row in which eHow saw revenue growth. The company’s free cash flow was also greatly impacted (increased by $11.8 million YoY) by the company’s decreased content spend on eHow. He said they have removed over 600,000 pieces of low quality content, while adding additional higher quality content. The company had indicated in the past that it deleted 300,000 articles, so clearly this is a substantial decrease in content. Rosenblatt also made another interesting comment, seemingly implying that the “clean-up” process may evolve to finding other uses for some of the content. He said they may remove some content form the site and put it elsewhere where it can still generate revenue. This is apparently for things that are too similar to other existing articles on the property, rather than necessarily low quality content. With regards to the content that has already been deleted, he said, “We just wanted to take that one broad stroke and show that we could clean it up.” Other improvements included: redesigning article pages, increasing the number of image rich pages, creating high quality video content, incorporating high production value video content from the YouTube channel and launching eHow spark, a social product. eHow Spark users, he said, generate three times the page views of typical eHow users. eHow’s mobile audience, he said, grew by 29%. He also said they’re increasing their efforts in mobile monetization. The company has been tweeting out various stats as well: .ditto199968640634847233{background: #FFFFFF url(http://a0.twimg.com/profile_background_images/338634865/Twitter-BG-Final.jpg) no-repeat;padding: 20px;} .ditto199968640634847233 a { color: #0095B3;} p.dittoTweet{background: #fff;padding: 10px 12px 10px 50px;margin: 0;min-height: 48px;color: #000;font-size: 18px !important;line-height: 22px;-moz-border-radius: 5px;-webkit-border-radius: 5px;} p.dittoTweet span.metadata {display: block;width: 100%;clear: both;margin-top: 8px;padding-top: 12px;height: 65px;} p.dittoTweet span.metadata span.author {line-height: 22px;color: #666;font-family: Arial, Helvetica, sans-serif;} .mainlink {font-family: Arial, Helvetica, sans-serif;font-size: 26px;color: #1F98C7;text-decoration: none;} .mainlink: hover {color: #1F98C7;text-decoration: underline;} .tweet {font-size: 24px;} p.dittoTweet span.metadata span.author img {float: left; margin: 0px 7px 0px 0px;} p.dittoTweet a:hover {text-decoration: underline;} p.dittoTweet span.timestamp {font-size: 12px;display: block;color: #999;} p.dittoTweet span.timestamp a {color: #999;text-decoration: none;} p.dittoTweet span.timestamp a > span {display: inline-block;width: 16px;background-image:url(http://images.ientrymail.com/socialditto/everything-spritev2.png);background-repeat: no-repeat;} p.dittoTweet span.timestamp a.reply > span {background-position: 0px 3px;} p.dittoTweet span.timestamp a.reply:hover > span {background-position: -16px 3px;} p.dittoTweet span.timestamp a.retweet > span {background-position: -80px 3px;} p.dittoTweet span.timestamp a.retweet:hover > span {background-position: -96px 3px;} p.dittoTweet span.timestamp a.favorite > span {background-position: -32px 2px;} p.dittoTweet span.timestamp a.favorite:hover > span {background-position: -48px 2px;} @demandmediaDemand MediaQ1 results even better than expected. 8 minutes ago via web ·  Reply ·  Retweet ·  Favorite · powered by @socialditto .ditto199968753973342208{background: #FFFFFF url(http://a0.twimg.com/profile_background_images/338634865/Twitter-BG-Final.jpg) no-repeat;padding: 20px;} .ditto199968753973342208 a { color: #0095B3;} p.dittoTweet{background: #fff;padding: 10px 12px 10px 50px;margin: 0;min-height: 48px;color: #000;font-size: 18px !important;line-height: 22px;-moz-border-radius: 5px;-webkit-border-radius: 5px;} p.dittoTweet span.metadata {display: block;width: 100%;clear: both;margin-top: 8px;padding-top: 12px;height: 65px;} p.dittoTweet span.metadata span.author {line-height: 22px;color: #666;font-family: Arial, Helvetica, sans-serif;} .mainlink {font-family: Arial, Helvetica, sans-serif;font-size: 26px;color: #1F98C7;text-decoration: none;} .mainlink: hover {color: #1F98C7;text-decoration: underline;} .tweet {font-size: 24px;} p.dittoTweet span.metadata span.author img {float: left; margin: 0px 7px 0px 0px;} p.dittoTweet a:hover {text-decoration: underline;} p.dittoTweet span.timestamp {font-size: 12px;display: block;color: #999;} p.dittoTweet span.timestamp a {color: #999;text-decoration: none;} p.dittoTweet span.timestamp a > span {display: inline-block;width: 16px;background-image:url(http://images.ientrymail.com/socialditto/everything-spritev2.png);background-repeat: no-repeat;} p.dittoTweet span.timestamp a.reply > span {background-position: 0px 3px;} p.dittoTweet span.timestamp a.reply:hover > span {background-position: -16px 3px;} p.dittoTweet span.timestamp a.retweet > span {background-position: -80px 3px;} p.dittoTweet span.timestamp a.retweet:hover > span {background-position: -96px 3px;} p.dittoTweet span.timestamp a.favorite > span {background-position: -32px 2px;} p.dittoTweet span.timestamp a.favorite:hover > span {background-position: -48px 2px;} @demandmediaDemand MediaMarch comScore reports @eHow moved up to #17 in US! 8 minutes ago via web ·  Reply ·  Retweet ·  Favorite · powered by @socialditto .ditto199968879391420416{background: #FFFFFF url(http://a0.twimg.com/profile_background_images/338634865/Twitter-BG-Final.jpg) no-repeat;padding: 20px;} .ditto199968879391420416 a { color: #0095B3;} p.dittoTweet{background: #fff;padding: 10px 12px 10px 50px;margin: 0;min-height: 48px;color: #000;font-size: 18px !important;line-height: 22px;-moz-border-radius: 5px;-webkit-border-radius: 5px;} p.dittoTweet span.metadata {display: block;width: 100%;clear: both;margin-top: 8px;padding-top: 12px;height: 65px;} p.dittoTweet span.metadata span.author {line-height: 22px;color: #666;font-family: Arial, Helvetica, sans-serif;} .mainlink {font-family: Arial, Helvetica, sans-serif;font-size: 26px;color: #1F98C7;text-decoration: none;} .mainlink: hover {color: #1F98C7;text-decoration: underline;} .tweet {font-size: 24px;} p.dittoTweet span.metadata span.author img {float: left; margin: 0px 7px 0px 0px;} p.dittoTweet a:hover {text-decoration: underline;} p.dittoTweet span.timestamp {font-size: 12px;display: block;color: #999;} p.dittoTweet span.timestamp a {color: #999;text-decoration: none;} p.dittoTweet span.timestamp a > span {display: inline-block;width: 16px;background-image:url(http://images.ientrymail.com/socialditto/everything-spritev2.png);background-repeat: no-repeat;} p.dittoTweet span.timestamp a.reply > span {background-position: 0px 3px;} p.dittoTweet span.timestamp a.reply:hover > span {background-position: -16px 3px;} p.dittoTweet span.timestamp a.retweet > span {background-position: -80px 3px;} p.dittoTweet span.timestamp a.retweet:hover > span {background-position: -96px 3px;} p.dittoTweet span.timestamp a.favorite > span {background-position: -32px 2px;} p.dittoTweet span.timestamp a.favorite:hover > span {background-position: -48px 2px;} @demandmediaDemand Mediaand more than 100 million people visit @eHow each month 8 minutes ago via web ·  Reply ·  Retweet ·  Favorite · powered by @socialditto .ditto199969942672637952{background: #FFFFFF url(http://a0.twimg.com/profile_background_images/338634865/Twitter-BG-Final.jpg) no-repeat;padding: 20px;} .ditto199969942672637952 a { color: #0095B3;} p.dittoTweet{background: #fff;padding: 10px 12px 10px 50px;margin: 0;min-height: 48px;color: #000;font-size: 18px !important;line-height: 22px;-moz-border-radius: 5px;-webkit-border-radius: 5px;} p.dittoTweet span.metadata {display: block;width: 100%;clear: both;margin-top: 8px;padding-top: 12px;height: 65px;} p.dittoTweet span.metadata span.author {line-height: 22px;color: #666;font-family: Arial, Helvetica, sans-serif;} .mainlink {font-family: Arial, Helvetica, sans-serif;font-size: 26px;color: #1F98C7;text-decoration: none;} .mainlink: hover {color: #1F98C7;text-decoration: underline;} .tweet {font-size: 24px;} p.dittoTweet span.metadata span.author img {float: left; margin: 0px 7px 0px 0px;} p.dittoTweet a:hover {text-decoration: underline;} p.dittoTweet span.timestamp {font-size: 12px;display: block;color: #999;} p.dittoTweet span.timestamp a {color: #999;text-decoration: none;} p.dittoTweet span.timestamp a > span {display: inline-block;width: 16px;background-image:url(http://images.ientrymail.com/socialditto/everything-spritev2.png);background-repeat: no-repeat;} p.dittoTweet span.timestamp a.reply > span {background-position: 0px 3px;} p.dittoTweet span.timestamp a.reply:hover > span {background-position: -16px 3px;} p.dittoTweet span.timestamp a.retweet > span {background-position: -80px 3px;} p.dittoTweet span.timestamp a.retweet:hover > span {background-position: -96px 3px;} p.dittoTweet span.timestamp a.favorite > span {background-position: -32px 2px;} p.dittoTweet span.timestamp a.favorite:hover > span {background-position: -48px 2px;} @demandmediaDemand MediaWe created 400 new @YouTube Channel episodes – almost 1,500 minutes of video 4 minutes ago via web ·  Reply ·  Retweet ·  Favorite · powered by @socialditto That’s the company as a whole – not just eHow, by the way, but eHow is obviously a huge part of it. .ditto199970282469994497{background: #FFFFFF url(http://a0.twimg.com/profile_background_images/338634865/Twitter-BG-Final.jpg) no-repeat;padding: 20px;} .ditto199970282469994497 a { color: #0095B3;} p.dittoTweet{background: #fff;padding: 10px 12px 10px 50px;margin: 0;min-height: 48px;color: #000;font-size: 18px !important;line-height: 22px;-moz-border-radius: 5px;-webkit-border-radius: 5px;} p.dittoTweet span.metadata {display: block;width: 100%;clear: both;margin-top: 8px;padding-top: 12px;height: 65px;} p.dittoTweet span.metadata span.author {line-height: 22px;color: #666;font-family: Arial, Helvetica, sans-serif;} .mainlink {font-family: Arial, Helvetica, sans-serif;font-size: 26px;color: #1F98C7;text-decoration: none;} .mainlink: hover {color: #1F98C7;text-decoration: underline;} .tweet {font-size: 24px;} p.dittoTweet span.metadata span.author img {float: left; margin: 0px 7px 0px 0px;} p.dittoTweet a:hover {text-decoration: underline;} p.dittoTweet span.timestamp {font-size: 12px;display: block;color: #999;} p.dittoTweet span.timestamp a {color: #999;text-decoration: none;} p.dittoTweet span.timestamp a > span {display: inline-block;width: 16px;background-image:url(http://images.ientrymail.com/socialditto/everything-spritev2.png);background-repeat: no-repeat;} p.dittoTweet span.timestamp a.reply > span {background-position: 0px 3px;} p.dittoTweet span.timestamp a.reply:hover > span {background-position: -16px 3px;} p.dittoTweet span.timestamp a.retweet > span {background-position: -80px 3px;} p.dittoTweet span.timestamp a.retweet:hover > span {background-position: -96px 3px;} p.dittoTweet span.timestamp a.favorite > span {background-position: -32px 2px;} p.dittoTweet span.timestamp a.favorite:hover > span {background-position: -48px 2px;} @demandmediaDemand MediaTraffic on @eHowEnEspanol was up 500% since last quarter! 4 minutes ago via web ·  Reply ·  Retweet ·  Favorite · powered by @socialditto Another interesting point brought out by Rosenblatt during the Q&A portion of the call: monetization on the iPad is the same or better than the deskop for eHow. It’s also clear that mobile is a major focus. Rosenblatt says people would rather consume the content on mobile, for eHow’s cooking/fixing things-type videos.

Demand Media just released its first quarter 2012 results, posting record first quarter revenue and raising 2012 guidance. For the quarter, ended March 31, total revenue was up 8% year-over-year, to $86.2 million CEO Richard Rosenblatt said, “Driven by continued growth across our businesses, our first quarter revenue exceeded our seasonally strong Q4 2011 results. We are pleased with our first quarter results and remain focused on investing in our long-term growth initiatives, including enhancing the quality of our Owned & Operated properties, expanding our content distribution channels and partnerships, and pursuing new generic Top Level Domain opportunities.” It was the second quarter in a row in which eHow saw revenue growth. The company’s free cash flow was also greatly impacted (increased by $11.8 million YoY) by the company’s decreased content spend on eHow. According to the report, eHow ranked as the #17 website in the US in March 2012, up from #19 in July 2011. LIVESTRONG.COM/eHow Health continued to rank as the #3 Health property in the US based on unique visits throughout the first quarter of 2012, it says. Another major point of interest: Owned & Operated page views increased 22% year-over-year, driven primarily by strong traffic growth to Cracked.com and LIVESTRONG.COM, partially offset by lower year-over-year eHow.com page views due to early 2011 search algorithm changes. That would be Google’s Panda update. During its last earnings call, however, the company said it had not been impacted by a Google algorithm change since July. We’ll be listening to today’s call, and will see what they have to say about it this time. Stay tuned. For now, here’s the release in its entirety: SANTA MONICA, Calif.–(BUSINESS WIRE)–May. 8, 2012– Demand Media, Inc. (NYSE: DMD), a leading content and social media company, today reported financial results for the quarter ended March 31, 2012 and raised its previously issued fiscal 2012 financial guidance. “Driven by continued growth across our businesses, our first quarter revenue exceeded our seasonally strong Q4 2011 results,” said Richard Rosenblatt, Chairman and CEO of Demand Media. “We are pleased with our first quarter results and remain focused on investing in our long-term growth initiatives, including enhancing the quality of our Owned & Operated properties, expanding our content distribution channels and partnerships, and pursuing new generic Top Level Domain opportunities.” Financial Summary In millions, except per share amounts Three months ended March 31, 2011 2012 Change Total Revenue $ 79.5 $ 86.2 8 % Content & Media Revenue ex-TAC(1) $ 48.7 $ 50.6 4 % Registrar Revenue 27.7 32.3 17 % Total Revenue ex-TAC(1) $ 76.3 $ 82.9 9 % Income (loss) from Operations(2) $ (4.2 ) $ (2.9 ) NA Adjusted EBITDA(1) $ 20.1 $ 21.9 9 % Net income (loss)(2) $ (5.6 ) $ (1.8 ) NA Adjusted net income(1) $ 5.1 $ 5.9 17 % EPS(2) $ (0.13 ) $ (0.02 ) NA Adjusted EPS(1) $ 0.06 $ 0.07 17 % Cash Flow from Operations $ 19.2 $ 18.5 (4 )% Free Cash Flow(1) $ (0.1 ) $ 11.8 NA (1) Non-GAAP measures are described below and reconciled to their comparable GAAP measures in the accompanying tables. Effective Q1 2012, the Company is reporting Adjusted EBITDA instead of Adjusted OIBDA. Reconciliations for both measures are presented on the Company’s investor relations site. (2) Q1 2012 loss from operations and net loss include $1.8 million of accelerated non-cash amortization expense associated with content intangible assets removed from service in conjunction with the Company’s previously announced plan to improve its content creation and distribution platform. Q1 2012 Financial Summary: Content & Media revenue ex-TAC grew 4% year-over-year and increased 1% compared to the fourth quarter of 2011. Year-over-year comparisons were impacted by early 2011 search algorithm changes. The 1% sequential improvement included the second consecutive quarter of revenue growth for eHow. Registrar revenue grew 17% year-over-year and 3% compared to the fourth quarter of 2011. During the first quarter of 2012, the number of registered domains grew by a net 593,000 compared to 442,000 in the first quarter of 2011, due to growth from new partners and organic growth from resellers. Loss from operations and net loss include $1.8 million of accelerated non-cash amortization expense associated with content intangible assets removed from service in conjunction with the Company’s previously announced plan to improve its content creation and distribution platform. Free cash flow increased by $11.8 million year-over-year. The increase was driven by an 81% reduction of investment in intangible assets to $2.7 million. The intangible assets investment decline was the result of planned decreased content spend on eHow as the Company continued to make improvements to its content creation and distribution platform. “Our first quarter growth and significant free cash flow marks a great start for 2012, particularly in light of a tough year-over-year comparison due to early 2011 search algorithm changes,” said Charles Hilliard, President and CFO. “Demand Media’s increased guidance reflects our first quarter performance, our improved outlook for the remainder of 2012 and, for the first time in more than a year, a return to accelerating year-over-year revenue growth beginning in Q2.” Business Highlights: In April 2012, Demand Media invested $18 million in pursuit of its generic Top Level Domain (“gTLD”) initiative, which it believes represents a complementary strategic growth opportunity for its Registrar services. On a consolidated basis, Demand Media ranked as a top 20 US web property throughout the first quarter of 2012, ranking as #18 in March 2012(1). Demand Media’s worldwide unique users exceeded 104 million in March 2012(1). On a standalone basis, eHow.com ranked as the #17 website in the US in March 2012, up from #19 inJuly 2011(1). LIVESTRONG.COM/eHow Health continued to rank as the #3 Health property in the US based on unique visits throughout the first quarter of 2012(1). In May 2012, LIVESTRONG.COM won the People’s Voice Webby award for Health Websites. Cracked.com continued its ranking as the most visited humor site in the US throughout the first quarter of 2012(1), and more time was spent on the site than any other humor website(1). In May 2012, Cracked.com won the People’s Voice Webby award for Humor Websites. In February 2012, Demand Media introduced its innovative Social Feed ads, which allow advertisers to deliver customized social media content directly into their live rich media ads. In March 2012, Demand Media launched the eHow.com Tech channel, with RadioShack as its lead sponsor, to help users master everyday tech-related tasks and projects. In April 2012, Demand Media launched eHow Pets, the third major channel in its partnership withYouTube. During the first quarter of 2012, Demand Media repurchased 421,000 shares of common stock for $3 million under its Board-authorized $50 million share repurchase program. Since the program’s inception, the Company has repurchased 2.8 million shares of common stock for $20 million. (1) Source: comScore. Operating Metrics: Three months ended March 31, 2011 2012 %  Change Content & Media Metrics: Owned and operated Page views(1) (in millions) 2,582 3,142 22 % RPM(2) $ 15.69 $ 12.52 (20 )% Network of customer websites Page views(1) (in millions) 3,766 4,722 25 % RPM(2) $ 3.01 $ 3.10 3 % RPM ex-TAC(3) $ 2.16 $ 2.38 10 % Registrar Metrics: End of Period # of Domains(4) (in millions) 11.4 13.3 16 % Average Revenue per Domain(5) $ 9.88 $ 9.94 1 % ____________________ (1) Page views represent the total number of web pages viewed across (a) our owned and operated websites and/or (b) our network of customer websites, to the extent that the viewed customer web pages host the Company’s content, social media and/or monetization services. (2) RPM is defined as Content & Media revenue per one thousand page views. (3) RPM ex-TAC is defined as Content & Media Revenue ex-TAC per one thousand page views. (4) Domain is defined as an individual domain name paid for by a third-party customer where the domain name is managed through our Registrar service offering. (5) Average revenue per domain is calculated by dividing Registrar revenue for a period by the average number of domains registered in that period. Average revenue per domain for partial year periods is annualized. Beginning July 1, 2011, the number of net new domains has been adjusted to include only new registered domains added to our platform for which the Company has recognized revenue. Excluding the impact of this change, end of period # of domains at March 31, 2012 and average revenue per domain during the three months ended March 31, 2012 would have increased 20% and decreased 4%, respectively, compared to the corresponding prior-year periods. Q1 2012 Operating Metrics: Owned & Operated page views increased 22% year-over-year, driven primarily by strong traffic growth to Cracked.com and LIVESTRONG.COM, partially offset by lower year-over-year eHow.com page views due to early 2011 search algorithm changes. The mix shift in page view growth to relatively lower RPM properties in Q1 2012 resulted in a 20% year-over-year decline in RPM. Network page views grew 25% year-over-year, primarily due to the acquisition of IndieClick in August 2011, which generated 1.6 billion page views during the quarter ended March 31, 2012, offset partly by a decline in page views associated with certain of our social media customers. Network RPM ex-TAC increased 10% year-over-year, reflecting higher RPMs from YouTube Channels that more than offset lower RPMs from IndieClick. End of period domains increased 16% to 13.3 million year-over-year, driven by the addition of higher volume customers and growth from existing resellers, with average revenue per domain increasing by 1%. Business Outlook The following forward-looking information includes certain projections made by management as of the date of this press release. The Company does not intend to revise or update this information, except as required by law, and may not provide this type of information in the future. Due to a variety of factors, actual results may differ significantly from those projected. The factors that may affect results include, without limitation, the factors referenced later in this announcement under the caption “Cautionary Information Regarding Forward-Looking Statements.” These and other factors are discussed in more detail in the Company’s filings with the Securities and Exchange Commission. Excluding up to $4 million of 2012 expenses that the Company expects to incur related to the formation of its generic Top Level Domain (“gTLD”) initiative, the Company’s guidance for the second quarter endingJune 30, 2012 and fiscal year ending December 31, 2012 is as follows: Second Quarter 2012 Revenue in the range of $89.0 – $91.0 million Revenue ex-TAC in the range of $85.0 – $87.0 million Adjusted EBITDA in the range of $22.0 – $23.0 million Adjusted EPS in the range of $0.07 – $0.08 per share Weighted average diluted shares of 86.0 – 87.0 million Full Year 2012 Revenue in the range of $361.0 – $367.0 million Revenue ex-TAC in the range of $347.0 – $353.0 million Adjusted EBITDA in the range of $96.0 – $99.0 million Adjusted EPS in the range of $0.33 – $0.35 per share Weighted average diluted shares of 86.5 – 87.5 million Conference Call and Webcast Information Demand Media will host a corresponding conference call and live webcast at 5:00 p.m. Eastern timetoday. To access the conference call, dial 877.565.1268 (for domestic participants) or 937.999.3108 (for international participants). The conference ID is 74265713. To participate on the live call, analysts should dial-in at least 10-minutes prior to the commencement of the call. A live webcast also will be available on the Investor Relations section of the Company’s corporate website at http://ir.demandmedia.com and via replay beginning approximately two hours after the completion of the call. About Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we use certain non-GAAP financial measures described below. The presentation of this additional financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliation of Non-GAAP Measures to Unaudited Consolidated Statements of Operations” included in this release. Effective Q1 2012, the Company is reporting Adjusted EBITDA instead of Adjusted OIBDA. While the dollar value of each measure is the same, a comparison of the historical reconciliation of both measures is provided in our supplemental financial schedules posted on the investor relations section of our corporate site. The non-GAAP financial measures presented in this release are the primary measures used by the Company’s management and board of directors to understand and evaluate its financial performance and operating trends, including period to period comparisons, to prepare and approve its annual budget and to develop short and long term operational plans. Additionally, Adjusted EBITDA is the primary measure used by the compensation committee of the Company’s board of directors to establish the funding targets for and fund its annual employee bonus pool. We believe our presented non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) management frequently uses them in its discussions with investors, commercial bankers, securities analysts and other users of its financial statements. Revenue ex-TAC is defined by the Company as GAAP revenue less traffic acquisition costs (“TAC”). TAC comprises the portion of Content & Media GAAP revenue shared with the Company’s network customers. Management believes that Revenue ex-TAC is a meaningful measure of operating performance because it is frequently used for internal managerial purposes and helps facilitate a more complete period-to-period understanding of factors and trends affecting the Company’s underlying revenue performance. Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) is defined by the Company as net income (loss) before income tax expense, other income (expense), interest expense (income), depreciation, amortization, stock-based compensation, as well as the financial impact of acquisition and realignment costs, the formation expenses directly related to its generic Top Level Domain (“gTLD”) initiative, and any gains or losses on certain asset sales or dispositions. Acquisition and realignment costs include such items, when applicable, as (1) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (2) legal, accounting and other professional fees directly attributable to acquisition activity, and (3) employee severance payments attributable to acquisition or corporate realignment activities. Management does not consider these expenses to be indicative of the Company’s ongoing operating results or future outlook. Management believes that these non-GAAP measures reflect the Company’s business in a manner that allows for meaningful period to period comparisons and analysis of trends. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period to period comparisons of the Company’s underlying recurring revenue and operating costs which is focused more closely on the current costs necessary to utilize previously acquired long-lived assets. In addition, management believes that it can be useful to exclude certain non-cash charges because the amount of such expenses is the result of long-term investment decisions in previous periods rather than day-to-day operating decisions. For example, due to the long-lived nature of a majority of its media content, the revenue generated by the Company’s content assets in a given period bears little relationship to the amount of its investment in content in that same period. Accordingly, management believes that content acquisition costs represent a discretionary long-term capital investment decision undertaken at a point in time. This investment decision is clearly distinguishable from other ongoing business activities, and its discretionary nature and long-term impact differentiate it from specific period transactions, decisions regarding day-to-day operations, and activities that would have an immediate impact on operating or financial performance if materially changed, deferred or terminated. Adjusted Earnings Per Share is defined by the Company as Adjusted Net Income divided by the weighted average number of shares outstanding. Adjusted Net Income is defined by the Company as net income (loss) before the effect of stock-based compensation, amortization of intangible assets acquired via business combinations, accelerated amortization of intangible assets removed from service, acquisition and realignment costs, the formation expenses directly related to its generic Top Level Domain(“gTLD”) initiative, and any gains or losses on certain asset sales or dispositions, and is calculated using the application of a normalized effective tax rate. Acquisition and realignment costs include such items, when applicable, as (1) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (2) legal, accounting and other professional fees directly attributable to acquisition activity, and (3) employee severance payments attributable to acquisition or corporate realignment activities. Management does not consider these expenses to be indicative of the Company’s ongoing operating results or future outlook. Management believes that Adjusted Net Income and Adjusted Earnings Per Share provide investors with additional useful information to measure the Company’s underlying financial performance, particularly from period to period, because these measures are exclusive of certain non-cash expenses not directly related to the operation of its ongoing business (such as amortization of intangible assets acquired via business combinations, as well as certain other non-cash expenses such as purchase accounting adjustments and stock-based compensation) and include a normalized effective tax rate based on the Company’s statutory tax rate. Discretionary Free Cash Flow is defined by the Company as net cash provided by operating activities excluding cash outflows from acquisition and realignment activities, and the formation expenses directly related to its generic Top Level Domain (“gTLD”) initiative, less capital expenditures to acquire property and equipment. Free Cash Flow is defined by the Company as Discretionary Free Cash Flow less investments in intangible assets. Management believes that Discretionary Free Cash Flow and Free Cash Flow provide investors with additional useful information to measure operating liquidity because they reflect the Company’s underlying cash flows from recurring operating activities after investing in capital assets and intangible assets. These measures are used by management, and may also be useful for investors, to assess the Company’s ability to generate cash flow for a variety of strategic opportunities, including reinvestment in the business, potential acquisitions, payment of dividends and share repurchases. The use of these non-GAAP financial measures has certain limitations because they do not reflect all items of income and expense, or cash flows that affect the Company’s operations. An additional limitation of these non-GAAP financial measures is that they do not have standardized meanings, and therefore other companies may use the same or similarly-named measures but exclude different items or use different computations. Management compensates for these limitations by reconciling these non-GAAP financial measures to the most comparable GAAP financial measures within its financial press releases. Non-GAAP financial measures should be considered in addition to, not as a substitute for, measures prepared in accordance with GAAP. Further, these non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. The accompanying tables have more details on the GAAP financial measures and the related reconciliations. About Demand Media Demand Media, Inc. (NYSE: DMD) is a leading content and social media company that informs and entertains one of the Internet’s largest audiences, helps advertisers find innovative ways to engage with their customers and enables publishers to expand their online presence. Headquartered in Santa Monica, CA, Demand Media has offices in North America, South America and Europe. For more information aboutDemand Media, please visit www.demandmedia.com Cautionary Information Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements involve risks and uncertainties regarding the Company’s future financial performance, and are based on current expectations, estimates and projections about our industry, financial condition, operating performance and results of operations, including certain assumptions related thereto. Statements containing words such as “guidance,” “may,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” “projections,” “business outlook,” and “estimate” or similar expressions constitute forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered an indication of future performance. Potential risks and uncertainties include, among others: changes in the methodologies of Internet search engines, including ongoing algorithmic changes made byGoogle to its search results as well as possible future changes, and the impact such changes may have on page view growth and driving search related traffic to our owned and operated websites and the websites of our network customers; changes in our content creation and distribution platform, including the possible repurposing of content to alternate distribution channels, or the sale or removal of content; our ability to successfully launch, produce and monetize new content formats; the inherent challenges of estimating the overall impact on page views and search driven traffic to our owned and operated websites based on the data available to us as Google continues to make adjustments to its search algorithms; our ability to compete with new or existing competitors; our ability to maintain or increase our advertising revenue; our ability to continue to drive and grow traffic to our owned and operated websites and the websites of our network customers; our ability to effectively monetize our portfolio of content; our dependence on material agreements with a specific business partner for a significant portion of our revenue; future internal rates of return on content investment and our decision to invest in different types of content in the future, including video and other formats of text content; our ability to attract and retain freelance creative professionals; changes in our level of investment in media content intangibles; the effects of changes in marketing expenditures or shifts in marketing expenditures; the effects of seasonality on traffic to our owned and operated websites and the websites of our network customers; our ability to continue to add partners to our registrar platform on competitive terms; our ability to successfully pursue and implement our gTLD initiative; changes in stock-based compensation; changes in amortization or depreciation expense due to a variety of factors; potential write downs, reserves against or impairment of assets including receivables, goodwill, intangibles, and media content or other assets; changes in tax laws, our business or other factors that would impact anticipated tax benefits or expenses; our ability to successfully identify, consummate and integrate acquisitions, including integrating our recent acquisitions; our ability to retain key customers and key personnel; risks associated with litigation; the impact of governmental regulation; and the effects of discontinuing or discontinued business operations. From time to time, we may consider acquisitions or divestitures that, if consummated, could be material. Any forward-looking statements regarding financial metrics are based upon the assumption that no such acquisition or divestiture is consummated during the relevant periods. If an acquisition or divestiture were consummated, actual results could differ materially from any forward-looking statements. More information about potential risk factors that could affect our operating and financial results are contained in our annual report on Form 10-K for the fiscal year ending December 31, 2011 filed with the Securities and Exchange Commission (http://www.sec.gov) on February 24, 2012, and as such risk factors may be updated in our quarterly reports on Form 10-Q filed with the Securities and Exchange Commission, including, without limitation, information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Furthermore, as discussed above, the Company does not intend to revise or update the information set forth in this press release, except as required by law, and may not provide this type of information in the future. Demand Media, Inc. and Subsidiaries Unaudited Condensed Consolidated Statements of Operations (In thousands, except per share amounts) Three months ended March 31, 2011 2012 Revenue $ 79,523 $ 86,234 Operating expenses Service costs (exclusive of amortization of intangible assets shown separately below) (1) (2) 37,654 41,262 Sales and marketing (1) (2) 9,583 10,393 Product development (1) (2) 9,251 10,124 General and administrative (1) (2) 17,024 15,395 Amortization of intangible assets 10,203 11,956 Total operating expenses 83,715 89,130 Income (loss) from operations (4,192 ) (2,896 ) Other income (expense) Interest income 42 15 Interest expense (162 ) (137 ) Other income (expense), net (257 ) (19 ) Total other expense (377 ) (141 ) Income (loss) before income taxes (4,569 ) (3,037 ) Income tax expense (1,013 ) 1,195 Net loss $ (5,582 ) $ (1,842 ) (1) Stock-based compensation expense included in the line items above: Service costs $ 237 $ 708 Sales and marketing 900 1,536 Product development 1,116 1,688 General and administrative 6,674 3,459 Total stock-based compensation expense $ 8,927 $ 7,391 (2) Depreciation included in the line items above: Service costs $ 4,044 $ 3,650 Sales and marketing 72 134 Product development 321 282 General and administrative 572 898 Total depreciation $ 5,009 $ 4,964 Loss per common share: Net loss $ (5,582 ) $ (1,842 ) Cumulative preferred stock dividends (3) (2,477 ) — Net loss attributable to common stockholders $ (8,059 ) $ (1,842 ) Basic and diluted net loss per share $ (0.13 ) $ (0.02 ) Weighted average number of shares 63,759 82,942 (3) As a result of the Company’s initial public offering which was completed on January 31, 2011, all shares of the Company’s preferred stock were converted to common stock. Demand Media, Inc. and Subsidiaries Unaudited Condensed Consolidated Balance Sheets (In thousands) December 31, 2011 March 31,  2012 Current assets Cash and cash equivalents $ 86,035 $ 95,568 Accounts receivable, net 32,665 32,323 Prepaid expenses and other current assets 8,656 7,995 Deferred registration costs 50,636 56,540 Total current assets 177,992 192,426 Property and equipment, net 32,626 34,481 Intangible assets, net 111,304 101,864 Goodwill 256,060 256,060 Deferred registration costs 9,555 11,249 Other long-term assets 2,566 4,239 Total assets $ 590,103 $ 600,319 Liabilities, Convertible Preferred Stock and Stockholders’ Equity Current liabilities Accounts payable $ 10,046 $ 7,871 Accrued expenses and other current liabilities 33,932 33,706 Deferred tax liabilities 18,288 18,663 Deferred revenue 71,109 76,844 Total current liabilities 133,375 137,084 Deferred revenue 14,802 16,540 Other liabilities 1,660 3,160 Total liabilities 149,837 156,784 Stockholders’ equity Common stock and additional paid-in capital 528,042 536,150 Treasury stock (17,064 ) (20,055 ) Accumulated other comprehensive income 59 53 Accumulated deficit (70,771 ) (72,613 ) Total stockholders’ equity 440,266 443,535 Total liabilities, convertible preferred stock and stockholders’ equity $ 590,103 $ 600,319 Demand Media, Inc. and Subsidiaries Unaudited Condensed Consolidated Statements of Cash Flows (In thousands) Three months ended March 31, 2011 2012 Cash flows from operating activities: Net loss $ (5,582 ) $ (1,842 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 15,212 16,920 Stock-based compensation 8,836 7,391 Other 855 (1,420 ) Net change in operating assets and liabilities, net of effect of acquisitions (101 ) (2,571 ) Net cash provided by operating activities 19,220 18,478 Cash flows from investing activities: Purchases of property and equipment (5,084 ) (4,321 ) Purchases of intangibles (14,204 ) (2,703 ) Cash paid for acquisitions (3,839 ) (243 ) Net cash used in investing activities (23,127 ) (7,267 ) Cash flows from financing activities: Proceeds from issuance of common stock, net 78,874 — Repurchases of common stock — (2,990 ) Proceeds from exercises of stock options and contributions to ESPP 851 2,115 Other (108 ) (796 ) Net cash provided by (used in) financing activities 79,617 (1,671 ) Effect of foreign currency on cash and cash equivalents 8 (7 ) Change in cash and cash equivalents 75,718 9,533 Cash and cash equivalents, beginning of period 32,338 86,035 Cash and cash equivalents, end of period $ 108,056 $ 95,568 Demand Media, Inc. and Subsidiaries Reconciliations of Non-GAAP Measures to Unaudited Consolidated Statements of Operations (In thousands, except per share amounts) Three months ended March 31, 2011 2012 Revenue ex-TAC: Content & Media revenue $ 51,852 $ 53,963 Less: traffic acquisition costs (TAC) (3,190 ) (3,379 ) Content & Media Revenue ex-TAC 48,662 50,584 Registrar revenue 27,671 32,271 Total Revenue ex-TAC $ 76,333 $ 82,855 Adjusted EBITDA(1): Net loss $ (5,582 ) $ (1,842 ) Income tax expense/(benefit) 1,013 (1,195 ) Interest and other expense, net 377 141 Depreciation and amortization(2) 15,212 16,920 Stock-based compensation 8,927 7,391 Acquisition and realignment costs(3) 133 61 gTLD expense(4) — 429 Adjusted EBITDA $ 20,080 $ 21,905 Discretionary and Total Free Cash Flow: Net cash provided by operating activities $ 19,220 $ 18,478 Purchases of property and equipment (5,084 ) (4,321 ) gTLD expense cash flows(4) — 314 Discretionary Free Cash Flow 14,136 14,471 Purchases of intangible assets (14,204 ) (2,703 ) Free Cash Flow $ (68 ) $ 11,768 Adjusted Net Income: GAAP net income (loss) $ (5,582 ) $ (1,842 ) (a) Stock-based compensation 8,927 7,391 (b) Amortization of intangible assets – M&A 3,733 2,929 (c) Content intangible assets removed from service(2) — 1,818 (d) Acquisition and realignment costs(3) 133 61 (e) gTLD expense(4) — 429 (f) Income tax effect of items (a) – (e) & application of 38% statutory tax rate to pre-tax income (2,112 ) (4,840 ) Adjusted Net Income $ 5,099 $ 5,946 Non-GAAP Adjusted Net Income per share – diluted $ 0.06 $ 0.07 Shares used to calculate non-GAAP Adjusted Net Income per share – diluted (5) 89,861 85,540 (1) Effective Q1 2012, the Company is reporting Adjusted EBITDA instead of Adjusted OIBDA. While the dollar value of each measure does not differ, a comparison of the historical reconciliation of both measures is provided in our supplemental financial schedules posted on our investor relations site. (2) In conjunction with its previously announced plans to improve its content creation and distribution platform, the Company elected to remove certain content assets from service, resulting in $1.8 million of accelerated amortization expense in the first quarter of 2012. (3) Acquisition and realignment costs include non-cash purchase accounting adjustments, acquisition-related legal and accounting professional fees and employee severance payments attributable to corporate realignment activities. Management does not consider these costs to be indicative of the Company’s core operating results. (4) Comprises formation expenses directly related to the Company’s gTLDs initiative that is not expected to generate associated revenue in 2012. (5) Shares used to calculate non-GAAP Adjusted Net Income per share – diluted include the weighted average common stock and restricted stock for the periods presented and all dilutive common stock equivalent at each period. Amounts have been adjusted in 2011 to reflect the revised capital structure following the Company’s initial public offering which was completed on January 31, 2011, whereby the Company issued 5,175 shares of common stock and converted certain warrants and all of the convertible preferred stock into 62,155 shares of common stock as if those transactions were consummated on January 1, 2011. Demand Media, Inc. and Subsidiaries Unaudited GAAP Revenue, by Revenue Source (In thousands) Three months ended March 31, 2011 2012 Content & Media: Owned and operated websites $ 40,524 $ 39,348 Network of customer websites   11,328   14,615 Total revenue – Content & Media   51,852   53,963 Registrar   27,671   32,271 Total revenue $ 79,523 $ 86,234 Three months ended March 31, 2011 2012 Content & Media: Owned and operated websites   51 %   46 % Network of customer websites   14 %   17 % Total revenue – Content & Media   65 %   63 % Registrar   35 %   37 % Total revenue   100 %   100 %   Source: Demand Media, Inc.

Google just released its Q1 earnings report. One of the big concerns about this report (since the last one) is that Google’s mobile business is growing too fast for its mobile ad revenue to keep up with it. Last quarter, the company announced an 8% decline in cost-per-click. Sure enough, cost-per-click is down even more this time. Here’s the relevant part of the release: Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 12% over the first quarter of 2011 and decreased approximately 6% over the fourth quarter of 2011. “Google had another great quarter with revenues up 24% year on year,” said CEO Larry Page. “We also saw tremendous momentum from the big bets we’ve made in products like Android, Chrome and YouTube. We are still at the very early stages of what technology can do to improve people’s lives and we have enormous opportunities ahead. It is a very exciting time to be at Google.” Oh yeah, and about that dividend… Google also announced that its Board of Directors unanimously approved a stock dividend proposal, “designed to preserve the corporate structure that has allowed Google to remain focused on the long term.” Last week, Page put out a big letter to investors, talking about Google’s focus and direction. You can read that whole thing here. I’m sure we’ll be hearing more about all of that this afternoon, and most likely some about that new “simpler, more beautiful Google“. Either way, here’s more on that, including why users like and don’t like it. Hopefully Project Glass will come up. From the earnings call: Google Dividend Provides Two-For-One Stock Split Here’s the release in its entirety: MOUNTAIN VIEW, Calif. – April 12, 2012 – Google Inc. (NASDAQ: GOOG) today announced financial results for the quarter ended March 31, 2012. “Google had another great quarter with revenues up 24% year on year,” said Larry Page, CEO of Google.  “We also saw tremendous momentum from the big bets we’ve made in products like Android, Chrome and YouTube. We are still at the very early stages of what technology can do to improve people’s lives and we have enormous opportunities ahead.  It is a very exciting time to be at Google.” Google announced today that its Board of Directors unanimously approved a stock dividend proposal designed to preserve the corporate structure that has allowed Google to remain focused on the long term. More information is available on our Investor Relations site, including a letter from our founders Larry Page and Sergey Brin explaining the proposal, and in our forthcoming proxy statement. Q1 Financial Summary Google reported revenues of $10.65 billion for the quarter ended March 31, 2012, an increase of 24% compared to the first quarter of 2011. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the first quarter of 2012, TAC totaled $2.51 billion, or 25% of advertising revenues. Google reports operating income, operating margin, net income, and earnings per share (EPS) on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures at the end of this release. GAAP operating income in the first quarter of 2012 was $3.39 billion, or 32% of revenues. This compares to GAAP operating income of $2.30 billion, or 27% of revenues, in the first quarter of 2011. Non-GAAP operating income in the first quarter of 2012 was $3.94 billion, or 37% of revenues. This compares to non-GAAP operating income of $3.23 billion, or 38% of revenues, in the first quarter of 2011. GAAP net income in the first quarter of 2012 was $2.89 billion, compared to $1.80 billion in the first quarter of 2011. Non-GAAP net income in the first quarter of 2012 was $3.33 billion, compared to $2.64 billion in the first quarter of 2011. GAAP EPS in the first quarter of 2012 was $8.75 on 330 million diluted shares outstanding, compared to $5.51 in the first quarter of 2011 on 326 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2012 was $10.08, compared to $8.08 in the first quarter of 2011. Non-GAAP operating income and non-GAAP operating margin exclude the expenses related to stock-based compensation (SBC) and a charge related to the resolution of a Department of Justice investigation in the first quarter of 2011. Non-GAAP net income and non-GAAP EPS exclude the expenses noted above, net of the related tax benefits. In the first quarter of 2012, the charge related to SBC and related tax benefits were $556 million and $118 million compared to $432 million and $92 million in the first quarter of 2011. In the first quarter of 2011, the charge related to the resolution of the Department of Justice investigation was $500 million. We recognized no tax benefit for the charge related to the resolution of the Department of Justice investigation. Reconciliations of non-GAAP measures to GAAP operating income, operating margin, net income, and EPS are included at the end of this release. Q1 Financial Highlights Revenues – Google reported revenues of $10.65 billion in the first quarter of 2012, representing a 24% increase over first quarter 2011 revenues of $8.58 billion. Google reports its revenues, consistent with GAAP, on a gross basis without deducting TAC. Google Sites Revenues - Google-owned sites generated revenues of $7.31 billion, or 69% of total revenues, in the first quarter of 2012. This represents a 24% increase over first quarter 2011 revenues of $5.88 billion. Google Network Revenues - Google’s partner sites generated revenues of $2.91 billion, or 27% of total revenues, in the first quarter of 2012. This represents a 20% increase from first quarter 2011 network revenues of $2.43 billion. International Revenues - Revenues from outside of the United States totaled $5.77 billion, representing 54% of total revenues in the first quarter of 2012, compared to 53% in the fourth quarter of 2011 and 53% in the first quarter of 2011. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the fourth quarter of 2011 through the first quarter of 2012, our revenues in the first quarter of 2012 would have been $79 million higher. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the first quarter of 2011 through the first quarter of 2012, our revenues in the first quarter of 2012 would have been $67 million higher. Revenues from the United Kingdom totaled $1.15 billion, representing 11% of revenues in the first quarter of 2012, compared to 11% in the first quarter of 2011. In the first quarter of 2012, we recognized a benefit of $37 million to revenues through our foreign exchange risk management program, compared to $14 million in the first quarter of 2011. A reconciliation of our non-GAAP international revenues excluding the impact of foreign exchange and hedging to GAAP international revenues is included at the end of this release. Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 39% over the first quarter of 2011 and increased approximately 7% over the fourth quarter of 2011. Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 12% over the first quarter of 2011 and decreased approximately 6% over the fourth quarter of 2011. TAC - Traffic acquisition costs, the portion of revenues shared with Google’s partners, increased to $2.51 billion in the first quarter of 2012, compared to TAC of $2.04 billion in the first quarter of 2011. TAC as a percentage of advertising revenues was 25% in the first quarter of 2012, compared to 25% in the first quarter of 2011. The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.04 billion in the first quarter of 2012. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $468 million in the first quarter of 2012. Other Cost of Revenues - Other cost of revenues, which is comprised primarily of data center operational expenses, amortization of intangible assets, content acquisition costs, and credit card processing charges increased to $1.28 billion, or 12% of revenues, in the first quarter of 2012, compared to $897 million, or 10% of revenues, in the first quarter of 2011. Operating Expenses - Operating expenses, other than cost of revenues, were $3.47 billion in the first quarter of 2012, or 33% of revenues, compared to $3.34 billion in the first quarter of 2011, or 39% of revenues. Stock-Based Compensation (SBC) – In the first quarter of 2012, the total charge related to SBC was $556 million, compared to $432 million in the first quarter of 2011. We currently estimate SBC charges for grants to employees prior to March 31, 2012 to be approximately $2 billion for 2012. This estimate does not include expenses to be recognized related to employee stock awards that are granted after March 31, 2012 or non-employee stock awards that have been or may be granted. Operating Income – GAAP operating income in the first quarter of 2012 was $3.39 billion, or 32% of revenues. This compares to GAAP operating income of $2.30 billion, or 27% of revenues, in the first quarter of 2011. Non-GAAP operating income in the first quarter of 2012 was $3.94 billion, or 37% of revenues. This compares to non-GAAP operating income of $3.23 billion, or 38% of revenues, in the first quarter of 2011. Interest and Other Income, Net – Interest and other income, net increased to $156 million in the first quarter of 2012, compared to $96 million in the first quarter of 2011. Income Taxes – Our effective tax rate was 18% for the first quarter of 2012. Net Income – GAAP net income in the first quarter of 2012 was $2.89 billion, compared to $1.80 billion in the first quarter of 2011. Non-GAAP net income was $3.33 billion in the first quarter of 2012, compared to $2.64 billion in the first quarter of 2011. GAAP EPS in the first quarter of 2012 was $8.75 on 330 million diluted shares outstanding, compared to $5.51 in the first quarter of 2011 on 326 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2012 was $10.08, compared to $8.08 in the first quarter of 2011. Cash Flow and Capital Expenditures – Net cash provided by operating activities in the first quarter of 2012 totaled $3.69 billion, compared to $3.17 billion in the first quarter of 2011. In the first quarter of 2012, capital expenditures were $607 million, the majority of which was related to IT infrastructure investments, including data centers, servers, and networking equipment. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the first quarter of 2012, free cash flow was $3.09 billion. We expect to continue to make significant capital expenditures. A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release. Cash – As of March 31, 2012, cash, cash equivalents, and short-term marketable securities were $49.3 billion. Headcount – On a worldwide basis, Google employed 33,077 full-time employees as of March 31, 2012, up from 32,467 full-time employees as of December 31, 2011. WEBCAST AND CONFERENCE CALL INFORMATION A live audio webcast of Google’s first quarter 2012 earnings release call will be available at http://investor.google.com/webcast.html. The call begins today at 1:30 PM (PT) / 4:30 PM (ET). This press release, the financial tables, as well as other supplemental information including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, are also available on that site. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements that involve risks and uncertainties. These statements include statements regarding our continued investments in our core areas of strategic focus, our expected SBC charges, and our plans to make significant capital expenditures. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, unforeseen changes in our hiring patterns and our need to expend capital to accommodate the growth of the business, as well as those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2011, which is on file with the SEC and is available on our investor relations website at investor.google.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012. All information provided in this release and in the attachments is as of April 12, 2012, and we undertake no duty to update this information unless required by law. ABOUT NON-GAAP FINANCIAL MEASURES To supplement our consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP EPS, free cash flow, and non-GAAP international revenues. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures,” “Reconciliation from net cash provided by operating activities to free cash flow,” and “Reconciliation from GAAP international revenues to non-GAAP international revenues” included at the end of this release. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our “recurring core business operating results,” meaning our operating performance excluding not only non-cash charges, such as SBC, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity as well as comparisons to our competitors’ operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus expenses related to SBC, and, as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenues. Google considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of SBC and as applicable, other special items so that Google’s management and investors can compare Google’s recurring core business operating results over multiple periods. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, Google’s management believes that providing a non-GAAP financial measure that excludes SBC allows investors to make meaningful comparisons between Google’s recurring core business operating results and those of other companies, as well as providing Google’s management with an important tool for financial and operational decision making and for evaluating Google’s own recurring core business operating results over different periods of time. There are a number of limitations related to the use of non-GAAP operating income versus operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes some costs, namely, SBC, that are recurring. SBC has been and will continue to be for the foreseeable future a significant recurring expense in Google’s business. Second, SBC is an important part of our employees’ compensation and impacts their performance. Third, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP. Non-GAAP net income and EPS. We define non-GAAP net income as net income plus expenses related to SBC, and, as applicable, other special items less the related tax effects. The tax effect of SBC is calculated using the tax-deductible portion of SBC and applying the entity-specific, U.S. federal and blended state tax rates. We define non-GAAP EPS as non-GAAP net income divided by the weighted average outstanding shares, on a fully-diluted basis. We consider these non-GAAP financial measures to be a useful metric for management and investors for the same reasons that Google uses non-GAAP operating income and non-GAAP operating margin. However, in order to provide a complete picture of our recurring core business operating results, we exclude from non-GAAP net income and non-GAAP EPS the tax effects associated with SBC and, as applicable, other special items. Without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on our operating results. The same limitations described above regarding Google’s use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP EPS. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP EPS and evaluating non-GAAP net income and non-GAAP EPS together with net income and EPS calculated in accordance with GAAP. Free cash flow. We define free cash flow as net cash provided by operating activities less capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, including information technology infrastructure and land and buildings, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of free cash flow also facilitates management’s comparisons of our operating results to competitors’ operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Google is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Our management compensates for this limitation by providing information about our capital expenditures on the face of the statement of cash flows and under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Google has computed free cash flow using the same consistent method from quarter to quarter and year to year. Non-GAAP international revenues. We define non-GAAP international revenues as international revenues excluding the impact of foreign exchange and hedging. Non-GAAP international revenues are calculated by translating current quarter revenues using prior quarter and prior year exchange rates, as well as excluding any hedging gains realized in the current quarter. We consider non-GAAP international revenues as a useful metric as it facilitates management’s internal comparison to our historical performance. The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures. ADDITIONAL INFORMATION AND WHERE TO FIND IT This press release may be deemed to be solicitation material in respect of the solicitation of proxies from stockholders for Google’s 2012 annual meeting of stockholders (“2012 Annual Meeting”).  Google intends to file with the Securities and Exchange Commission (the “SEC”) and make available to the stockholders of Google of record on April 23, 2012 a proxy statement containing important information about the proposed creation of a new class of stock (the “Proposal”) and certain other matters to be considered by the stockholders of Google at its 2012 Annual Meeting. BEFORE MAKING ANY VOTING DECISION, GOOGLE’S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) WHEN IT BECOMES AVAILABLE CAREFULLY AND IN ITS ENTIRETY BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSAL AND CERTAIN OTHER MATTERS TO BE CONSIDERED AT THE 2012 ANNUAL MEETING. Investors will be able to obtain the proxy statement and other relevant materials, when available, free of charge at the SEC’s website (http://www.sec.gov). In addition, documents filed with the SEC by Google, including the proxy statement when available, and the Annual Report on Form 10-K for the year ended December 31, 2011, will be available free of charge from Google, at Google’s website (http://www.google.com) or by writing to Google Inc., 1600 Amphitheatre Parkway, Mountain View, CA 94043, Attn: Corporate Secretary. PARTICIPANTS IN THE SOLICITATION Google and its directors, nominees, and executive officers may be deemed to be participants in the solicitation of proxies from Google’s stockholders with respect to the matters to be considered at the 2012 Annual Meeting, including the Proposal.  Information regarding the names, affiliations, and direct or indirect interests (by security holdings or otherwise) of these persons will be described in the proxy statement to be filed with the SEC. Contact: Willa Lo Investor Relations +1-650-214-3381 wlo@google.com Google Inc. CONSOLIDATED BALANCE SHEETS (In millions) As of December 31, 2011 * As of March 31, 2012 (unaudited) Assets Current assets: Cash and cash equivalents $9,983 $23,108 Marketable securities 34,643 26,208 Accounts receivable, net of allowance 5,427 5,163 Receivable under reverse repurchase agreements 745 550 Deferred income taxes, net 215 51 Prepaid revenue share, expenses and other assets 1,745 1,779 Total current assets 52,758 56,859 Prepaid revenue share, expenses and other assets, non-current 499 664 Non-marketable equity securities 790 880 Property and equipment, net 9,603 9,875 Intangible assets, net 1,578 1,541 Goodwill 7,346 7,325 Total assets $72,574 $77,144 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $588 $760 Short-term debt 1,218 2,468 Accrued compensation and benefits 1,818 1,017 Accrued expenses and other current liabilities 1,370 1,248 Accrued revenue share 1,168 1,164 Securities lending payable 2,007 2,252 Deferred revenue 547 594 Income taxes payable, net 197 239 Total current liabilities 8,913 9,742 Long-term debt 2,986 2,987 Deferred revenue, non-current 44 42 Income taxes payable, non-current 1,693 1,787 Deferred income taxes, net, non-current 287 384 Other long-term liabilities 506 490 Stockholders’ equity: Common stock and additional paid-in capital 20,264 20,795 Accumulated other comprehensive income 276 422 Retained earnings 37,605 40,495 Total stockholders’ equity 58,145 61,712 Total liabilities and stockholders’ equity $72,574 $77,144 * Derived from audited financial statements. Back to Top Google Inc. CONSOLIDATED STATEMENTS OF INCOME (In millions, except share amounts which are reflected in thousands and per share amounts) Three Months Ended March 31, 2011 2012 (unaudited) Revenues: $8,575 $10,645 Costs and expenses: Costs of revenues ¹ 2,936 3,789 Research and development ¹ 1,226 1,441 Sales and marketing ¹ 1,026 1,269 General and administrative ¹ 591 757 Charge related to the resolution of Department of Justice investigation 500 - Total costs and expenses 6,279 7,256 Income from operations 2,296 3,389 Interest and other income, net 96 156 Income before income taxes 2,392 3,545 Provision for income taxes 594 655 Net income $1,798 $2,890 Net income per share – basic $5.59 $8.88 Net income per share – diluted $5.51 $8.75 Shares used in per share calculation – basic 321,527 325,299 Shares used in per share calculation – diluted 326,383 330,136 ¹ Includes stock-based compensation expense as follows: Costs of revenues $49 $74 Research and development 237 299 Sales and marketing 78 97 General and administrative 68 86   Back to Top Google Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Three Months Ended March 31, 2011 2012 (unaudited) Operating activities Net income $1,798 $2,890 Adjustments: Depreciation and amortization of property and equipment 301 378 Amortization of intangible and other assets 100 133 Stock-based compensation expense 432 556 Excess tax benefits from stock-based award activities (24) (28) Deferred income taxes 289 354 Gain on marketable equity securities - (44) Other 36 (24) Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable 181 301 Income taxes, net 73 143 Prepaid revenue share, expenses and other assets (78) (308) Accounts payable 27 169 Accrued expenses and other liabilities 37 (855) Accrued revenue share (33) (11) Deferred revenue 33 40 Net cash provided by operating activities 3,172 3,694 Investing activities Purchases of property and equipment (890) (607) Purchases of marketable securities (7,591) (8,688) Maturities and sales of marketable securities 4,645 17,201 Investments in non-marketable equity securities (131) (103) Cash collateral received (returned) related to securities lending (481) 245 Maturities of reverse repurchase agreements 175 195 Acquisitions, net of cash acquired, and purchases of intangible and other assets (148) (92) Net cash provided by (used in) investing activities (4,421) 8,151 Financing activities Net proceeds (payments) related to stock-based award activities 116 (47) Excess tax benefits from stock-based award activities 24 28 Proceeds from issuance of debt, net of costs 2,184 3,149 Repayments of debt (2,435) (1,900) Net cash provided by (used in) financing activities (111) 1,230 Effect of exchange rate changes on cash and cash equivalents 145 50 Net increase (decrease) in cash and cash equivalents (1,215) 13,125 Cash and cash equivalents at beginning of period 13,630 9,983 Cash and cash equivalents at end of period $12,415 $23,108   Back to Top Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures The following table presents certain non-GAAP results before certain material items (in millions, except share amounts which are reflected in thousands and per share amounts, unaudited): Three Months Ended March 31, 2011 Three Months Ended March 31, 2012 GAAP Actual Operating Margin (a) Adjustments Non-GAAP Results Non-GAAP Operating Margin (b) GAAP Actual Operating Margin (a) Adjustments Non-GAAP Results Non-GAAP Operating Margin (b) $432 (c) $556 (d) 500 (e) Income from operations $2,296 26.8% $932 $3,228 37.6% $3,389 31.8% $556 $3,945 37.1% $432 (c) $556 (d) (92) (f) (118) (f) 500 (e) Net income $1,798 $840 $2,638 $2,890 $438 $3,328 Net income per share – diluted $5.51 $8.08 $8.75 $10.08 Shares used in per share calculation – diluted 326,383 326,383 330,136 330,136 (a) Operating margin is defined as income from operations divided by revenues. (b) Non-GAAP operating margin is defined as non-GAAP income from operations divided by revenues. (c) To eliminate $432 million of stock-based compensation expense recorded in the first quarter of 2011. (d) To eliminate $556 million of stock-based compensation expense recorded in the first quarter of 2012. (e) To eliminate $500 million of the charge related to the resolution of Department of Justice investigation. (f) To eliminate income tax effects related to expenses noted in (c) and (d). Back to Top Reconciliation from net cash provided by operating activities to free cash flow (in millions, unaudited): Three Months Ended March 31, 2012 Net cash provided by operating activities $3,694 Less purchases of property and equipment (607) Free cash flow $3,087 Net cash provided by investing activities* 8,151 Net cash provided by financing activities $1,230 * Includes purchases of property and equipment. Back to Top Reconciliation from GAAP international revenues to non-GAAP international revenues (in millions, unaudited): Three Months Ended March 31, 2012 Three Months Ended March 31, 2012 (using Q1’11′s FX rates) (using Q4’11′s FX rates) United Kingdom revenues (GAAP) $1,150 $1,150 Exclude foreign exchange impact on Q1’12 revenues using Q1’11 rates 7 - Exclude foreign exchange impact on Q1’12 revenues using Q4’11 rates - 4 Exclude hedging gains recognized in Q1’12 (4) (4) United Kingdom revenues excluding foreign exchange and hedging impact (Non-GAAP) $1,153 $1,150 Rest of the world revenues (GAAP) $4,621 $4,621 Exclude foreign exchange impact on Q1’12 revenues using Q1’11 rates 60 - Exclude foreign exchange impact on Q1’12 revenues using Q4’11 rates - 75 Exclude hedging gains recognized in Q1’12 (33) (33) Rest of the world revenues excluding foreign exchange and hedging impact (Non-GAAP) $4,648 $4,663 Back to Top The following table presents our revenues by revenue source (in millions, unaudited): Three Months Ended March 31, 2011 2012 Advertising revenues: Google websites $5,879 $7,312 Google Network Members’ websites 2,427 2,913 Total advertising revenues 8,306 10,225 Other revenues 269 420 Revenues $8,575 $10,645 Back to Top The following table presents our revenues, by revenue source, as a percentage of total revenues (unaudited): Three Months Ended March 31, 2011 2012 Advertising revenues: Google websites 69% 69% Google Network Members’ websites 28% 27% Total advertising revenues 97% 96% Other revenues 3% 4% Revenues 100% 100%

Google released its Q1 earnings report today, and along with it, the company announced that its Board of Directors unanimously approved a stock dividend proposal, which Google says is “designed to preserve the corporate structure that has allowed Google to remain focused on the long term.” It’s a two-for-one stock split. There’s a new class of stock – class c. It will have no voting rights. Stockholders who hold one class a share will have a non-voting class c share. That long term, by the way, was addressed in a letter to investors from Larry Page last week. Of course, it was also discussed in the company’s earnings call. Page said, “throughout our evolution” Google has managed the company for the long term and enjoyed tremendous success as a result. He made a point that since he took over as CEO last year, he’s trying run the company more like a startup. He also made the point to say, “We don’t have an unusually large acquisition plan, in case you were wondering.” Google will be filing a proxy statement soon. Page and fellow co-founder Sergey Brin have put up the following letter on the company’s investor relations site. Here’s the letter in its entirety: 2012 Founders’ Letter Introduction Throughout our evolution, from privately held start-up to large, publicly listed company, we have managed Google for the long term—enjoying tremendous success as a result, especially since our IPO in 2004. Sergey and I hoped, though we did not expect, that Google would have such significant impact, and this progress has made us even more impatient to do important things that matter in the world. Our enduring love for Google comes from a strong desire to create technology products that enrich millions of people’s lives in deep and meaningful ways. To fulfill these dreams, we need to ensure that Google remains a successful, growing business that can generate significant returns for everyone involved. Corporate Structure When we went public, we created a dual-class voting structure. Our goal was to maintain the freedom to focus on the long term by ensuring that the management team, in particular Eric, Sergey and I, retained control over Google’s destiny. As we explained in our first founders’ letter: “We are creating a corporate structure that is designed for stability over long time horizons. By investing in Google, you are placing an unusual long term bet on the team, especially Sergey and me, and on our innovative approach… We want Google to become an important and significant institution. That takes time, stability and independence… In the transition to public ownership, we have set up a corporate structure that will make it harder for outside parties to take over or influence Google. This structure will also make it easier for our management team to follow the long term, innovative approach emphasized earlier… The main effect of this structure is likely to leave our team, especially Sergey and me, with increasingly significant control over the company’s decisions and fate, as Google shares change hands… New investors will fully share in Google’s long term economic future but will have little ability to influence its strategic decisions through their voting rights… Our colleagues will be able to trust that they themselves and their labors of hard work, love and creativity will be well cared for by a company focused on stability and the long term… As an investor, you are placing a potentially risky long term bet on the team, especially Sergey and me. …. Sergey and I are committed to Google for the long term.” I wanted to quote all that because these were the clear, well-publicized expectations we established for investors in 2004. While this decision was controversial at the time, we believe with hindsight it was absolutely the right thing to do. Eight years later, these statements are still remarkably accurate, and everyone involved has realized tremendous benefits as a result. Given Google’s success, it’s unsurprising that this type of dual-class governance structure is now somewhat standard among newer technology companies. In our experience, success is more likely if you concentrate on the long term. Technology products often require significant investment over many years to fulfill their potential. For example, it took over three years just to ship our first Android handset, and then another three years on top of that before the operating system truly reached critical mass. These kinds of investments are not for the faint-hearted. We have protected Google from outside pressures and the temptation to sacrifice future opportunities to meet short-term demands. Long-term product investments, like Chrome and YouTube, which now enjoy phenomenal usage, were made with a significant degree of independence. We have a structure that prevents outside parties from taking over or unduly influencing our management decisions. However, day-to-day dilution from routine equity-based employee compensation and other possible dilution, such as stock-based acquisitions, will likely undermine this dual-class structure and our aspirations for Google over the very long term. We have put our hearts into Google and hope to do so for many more years to come. So we want to ensure that our corporate structure can sustain these efforts and our desire to improve the world. Effectively a Stock Split: And a New Class of Stock Today we announced plans to create a new class of non-voting capital stock, which will be listed on NASDAQ. These shares will be distributed via a stock dividend to all existing stockholders: the owner of each existing share will receive one new share of the non-voting stock, giving investors twice the number of shares they had before. It’s effectively a two-for-one stock split—something many of our investors have long asked us for. These non-voting shares will be available for corporate uses, like equity-based employee compensation, that might otherwise dilute our governance structure. We recognize that some people, particularly those who opposed this structure at the start, won’t support this change—and we understand that other companies have been very successful with more traditional governance models. But after careful consideration with our board of directors, we have decided that maintaining this founder-led approach is in the best interests of Google, our shareholders and our users. Having the flexibility to use stock without diluting our structure will help ensure we are set up for success for decades to come. In November 2009, Sergey and I published plans to sell a modest percentage of our overall stock, ending in 2015. We are currently halfway through those plans and we don’t expect any changes to that, certainly not as the result of this new potential class. We both remain very much committed to Google for the long term. It’s important to bear in mind that this proposal will only have an effect on governance over the very long term. In fact, there’s no particular urgency to make these changes now—we don’t have an unusually big acquisition planned, in case you were wondering. It’s just that since we know what we want to do, there’s no reason to delay the decision. Also note that there will be no immediate change in votes, because everyone will still have the same number. In addition, Eric, Sergey and I have all agreed to “stapling” arrangements so that, above set thresholds, if our economic interest in Google were to decline, our votes would as well. We also have provisions to ensure all shareholders are treated fairly from an economic perspective. For more details on all of this, please see the postscript below from our Chief Legal Officer, David Drummond, and the preliminary proxy statement we will file with the SEC next week. Conclusion We have always managed Google for the long term, investing heavily in the big bets we hope will make a significant difference in the world. Some of these bets have been tremendous, funding our activities and generating significant gains for our shareholders. Others have been less successful. But the ability to take these kinds of risks has been crucial to Google’s overall success and we aim to maintain this pioneering culture going forward. The proposal we announced today is consistent with the governance philosophy we articulated when we took the company public, as well as the trend for newer technology companies to adopt strong dual-class structures. We believe that it will provide great competitive strength—insulating Google from short-term pressures, whatever the source, for a long time to come, while also giving us more flexibility around equity grants. Investors and others have always taken a big bet on us, the founders, and that bet will likely last longer as a result of these changes. We are honored that so many of you have put your trust in us and we recognize the tremendous responsibility that rests on our shoulders. We think this is a good thing because users rely on Google to produce and operate amazing technology products and to safely and responsibly store their data. This is our passion. Sergey and I share a profound belief in the potential for technology to improve people’s lives and we are enormously excited about what lies ahead. I couldn’t write a better conclusion to this founder’s letter than what we wrote in 2004… so here goes: “We have a strong commitment to our users worldwide, their communities, the web sites in our network, our advertisers, our investors, and of course our employees. Sergey and I, and the team will do our best to make Google a long term success and the world a better place.” Larry Page CEO and Co-founder Sergey Brin Co-founder April 2012 Postscript from David Drummond, Chief Legal Officer, Google Inc. This is not the usual yada yada… so please read on. Although we’ll be filing a comprehensive proxy statement soon, I wanted to share some details about today’s proposal to create a new class of stock and the process our board of directors followed to approve it. As Larry and Sergey note above, the stock dividend we are announcing today will have the basic effect of a two-for-one stock split. Each holder of a share of Class A or Class B common stock will receive one share of the new non-voting Class C capital stock. So after the dividend, a stockholder who currently owns one Class A share with a single vote will continue to own that share plus one Class C share without a vote. The Class A shares will continue to trade under the “GOOG” ticker symbol, while the Class C shares will trade under a different ticker symbol, so stockholders will be able to trade these shares, just as they can with Class A shares today. Except for voting rights, the Class C shares will have the same rights as the existing Class A and Class B shares. As is typically the case with stock splits, the Class C stock dividend will be tax-free. One thing to keep in mind is that immediately after the Class C dividend, all stockholders, including Larry, Sergey and Eric, will retain the same voting interest they hold prior to the dividend. In addition, Larry, Sergey and Eric have agreed to subject their shares to a Transfer Restriction Agreement. This agreement will maintain the same link between their voting and economic interests that exists today, even if they sell some of their non-voting Class C shares. If the founders or Eric wish to sell or transfer their non-voting Class C shares, a “stapling” provision in the agreement requires them to either sell an equal number of Class B shares, or convert an equal number of Class B shares into Class A shares. No other stockholders will be subject to these restrictions upon the transfer or sale of their shares. The stapling requirement will terminate as to the founders when their collective ownership falls below a certain threshold, and as to Eric when his ownership falls below a certain threshold. Further details of the Transfer Restriction Agreement will be included in our proxy, but it’s important to note that the stapling provision is designed so that, subject to the thresholds, the votes held by the founders and Eric will be reduced proportionally as their economic interest in the company declines. Our board of directors carefully considered this proposal to create a new class of stock before reaching a decision. In January 2011, the board established a special committee, comprised of independent, non-management board members to consider a new class of stock, or other alternatives. This committee retained its own financial and legal advisers to assist with its deliberations, and met on numerous occasions over the 15 months that the special committee considered the proposal separately from the board. The committee recommended, and the board unanimously approved, today’s proposal. The proposal is subject to the approval of a majority of the voting power of Google’s common stock, voting together as a single class, at our annual meeting on June 21, 2012. Given that Larry, Sergey, and Eric control the majority of voting power and support this proposal, we expect it to pass. The Board of Directors has not set a record date for the issuance of the Class C dividend and currently expects to set the date following the annual meeting. Next week, we’ll file a preliminary proxy statement with the SEC, which will contain further details regarding today’s proposal. David Drummond Chief Legal Officer, Google Inc. April 2012

Google announced the addition of realtime quotes from Canada and Taiwan to Google Finance today. “Here at Google, we get excited by bringing our users relevant information at blazing speeds. So, why would we want to make users wait 15 minutes to see what trades are being made?” writes engineer Mark Schmit on the Google Finance blog. “Instead, we’re continuing to expand our real-time coverage and are very pleased to announce the launch of two more real-time exchanges.” Those would be the Taiwan Stock Exchange (TPE) and the Canadian National Stock Exchange (CNSX). Here’s the full list of exchanges Google Finance now proivdes info for. Many of them are realtime while others have different increments: Google Finance also provides info for North America, Europe and Asia. Likewise for the following indexes: Google says it will be looking to add more info at a later date, which from the “check back soon” wording used in the announcement, could be in the near term. I guess this all falls under the blanket of increased direct answers in Google search results the company has been talking about.

Word is that Facebook is shooting for a $5 billion IPO in May, and now we know which exchange host it. The New York Times is reporting, citing “people with knowledge of the matter,” that Facebook has chosen NASDAQ for its IPO, and will ist under the ticker symbol FB. According to the report, Facebook has already notified the exchanges. CNBC appears to confirm the news separately: .ditto187961264859918338{background: #010C13 url(http://a0.twimg.com/profile_background_images/425046811/cnbc-twitter-2560x1440.png) no-repeat;padding: 20px;} .ditto187961264859918338 a { color: #2D648A;} p.dittoTweet{background: #fff;padding: 10px 12px 10px 50px;margin: 0;min-height: 48px;color: #000;font-size: 18px !important;line-height: 22px;-moz-border-radius: 5px;-webkit-border-radius: 5px;} p.dittoTweet span.metadata {display: block;width: 100%;clear: both;margin-top: 8px;padding-top: 12px;height: 65px;} p.dittoTweet span.metadata span.author {line-height: 22px;color: #666;font-family: Arial, Helvetica, sans-serif;} .mainlink {font-family: Arial, Helvetica, sans-serif;font-size: 26px;color: #1F98C7;text-decoration: none;} .mainlink: hover {color: #1F98C7;text-decoration: underline;} .tweet {font-size: 24px;} p.dittoTweet span.metadata span.author img {float: left; margin: 0px 7px 0px 0px;} p.dittoTweet a:hover {text-decoration: underline;} p.dittoTweet span.timestamp {font-size: 12px;display: block;color: #999;} p.dittoTweet span.timestamp a {color: #999;text-decoration: none;} p.dittoTweet span.timestamp a > span {display: inline-block;width: 16px;background-image:url(http://images.ientrymail.com/socialditto/everything-spritev2.png);background-repeat: no-repeat;} p.dittoTweet span.timestamp a.reply > span {background-position: 0px 3px;} p.dittoTweet span.timestamp a.reply:hover > span {background-position: -16px 3px;} p.dittoTweet span.timestamp a.retweet > span {background-position: -80px 3px;} p.dittoTweet span.timestamp a.retweet:hover > span {background-position: -96px 3px;} p.dittoTweet span.timestamp a.favorite > span {background-position: -32px 2px;} p.dittoTweet span.timestamp a.favorite:hover > span {background-position: -48px 2px;} @CNBCCNBCBreaking: Facebook to list on the @Nasdaq. 29 minutes ago via TweetDeck ·  Reply ·  Retweet ·  Favorite · powered by @socialditto Groupon, whose stock just hit an all-time low, also trades on the NASDAQ as does long-time Facebook partner Zynga, and other major tech companies like Google, Apple, Microsoft, Amazon, Intel and Yahoo. Other recent high profile IPOs like Yelp, Pandora and LinkedIn have gone to the NYSE. Watch our recent interviews with analysts about the implications of the IPO:

Late on Friday, Groupon issued a press release revising its earnings report, which was initially released in February. As previously reported, lawyers immediately started seeking complaints against the company. In fact, one press release from law firm Federman & Sherwood came out yesterday afternoon, saying: The law firm of Federman & Sherwood, a nationwide law firm specializing in securities, derivative and merger litigation, has initiated an investigation into Groupon, Inc. (NASDAQ: GRPN) with respect to possible breaches of fiduciary duty by the company’s officers and directors, as well as violations of state law. More specifically, the company and its auditor found material weaknesses with the company’s reported revenue and earnings for the fourth quarter 2011, and therefore may have misstated earnings and revenue in its Annual Report. There is also speculation that the officers and directors of the company “rushed” the initial public offering. If you purchased Groupon, Inc. shares between the IPO date of November 4, 2011 and March 31, 2012, have information to assist in our investigation, or have any questions or concerns regarding this notice or preservation of your rights, please contact our firm. That’s just a sampling of a greater number of such releases, according to reports. The Wall Street Journal is now reporting that the Securities and Exchange Commission is now involved. According to the publication, there has not been a formal investigation launched yet, but a probe is in a preliminary stage, which may or may not lead to a bigger investigation. The revisions included a $14.3 million reduction in Q4 revenue, which was originally reported as $506.5 million, up 194% year-over-year.Operating expenses were also increased, reducing operating income by $30 million, net income by $22.6 million and earnings per share by $0.04. CFO Jason Child said in the announcement, “We remain confident in the fundamentals of our business, as our performance continues to highlight the value that we provide to customers and merchants.” Meanwhile, Groupon has agreed to an $8.5 million settlement in a string of suits related to expiration dates on deals. This, according to Reuters, settles 17 suits in all.

BlackBerry maker Research In Motion (RIM) just released its fourth quarter and year-end of fiscal 2012 earnings. For Q4, the company reported a 19% drop in revenue from $5.2 billion in the third quarter to $4.2 billion. That’s also down 25% from $5.6 billion in the year-ago quarter. The company shipped 11.1 million BlackBerry smartphones and over 500,000 BlackBerry PlayBook tablets in the quarter. For the year, revenue was $18.4 billion, down 7% from $19.9 billion the previous year. “I have assessed many aspects of RIM’s business during my first 10 weeks as CEO,” says CEO Thorsten Heins, who assumed the CEO position in January. “I have confirmed that the Company has substantial strengths that can be further leveraged to improve our financial performance, including RIM’s global network infrastructure, a strong enterprise offering and a large and growing base of more than 77 million subscribers.” “I’m very excited about the prospects for the BlackBerry 10 platform, which is on track for the latter part of calendar 2012,” he added. “Notwithstanding these strengths and opportunities, the business challenges we face over the next several quarters are significant and I am taking the necessary steps to address them. In addition to delivering the BlackBerry 10 platform and refocusing resources on RIM’s key opportunities, such as BlackBerry Mobile Fusion and new integrated service offerings, we will also drive greater operational performance through a variety of initiatives including increased management accountability and process discipline. In parallel, we are undertaking a comprehensive review of strategic opportunities including partnerships and joint ventures, licensing, and other ways to leverage RIM’s assets and maximize value for our stakeholders.” Here’s the release in its entirety: WATERLOO, ONTARIO–(Marketwire -03/29/12)- Research In Motion Limited (RIM) (NASDAQ: RIMM - News)(TSX: RIM.TO -News), a world leader in the mobile communications market, today reported fourth quarter results for the three months and fiscal year ended March 3, 2012 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated). Highlights:   --  $2.1 billion in cash, cash equivalents, short-term and long-term     investments at the end of the quarter, which increased by approximately     $610 million in the quarter --  Cash flow from operations of approximately $1.1 billion, up from     approximately $900 million in Q3 --  Revenue of $4.2 billion, down 19% from the third quarter --  GAAP net loss in Q4 of $125 million or $0.24 per share diluted; adjusted     net income of $418 million or $0.80 per share diluted --  BlackBerry smartphone shipments of 11.1 million in Q4, down 21% from Q3 --  RIM to discontinue providing specific quantitative guidance --  RIM provides update on organizational changes Q4 Results: Revenue for the fourth quarter of fiscal 2012 was $4.2 billion, down 19% from $5.2 billion in the previous quarter and down 25% from $5.6 billion in the same quarter of fiscal 2011. The revenue breakdown for the quarter was approximately 68% for hardware, 27% for service and 5% for software and other revenue. During the quarter, RIM shipped approximately 11.1 million BlackBerry smartphones and over 500,000 BlackBerry PlayBook tablets. “I have assessed many aspects of RIM’s business during my first 10 weeks as CEO. I have confirmed that the Company has substantial strengths that can be further leveraged to improve our financial performance, including RIM’s global network infrastructure, a strong enterprise offering and a large and growing base of more than 77 million subscribers. I’m very excited about the prospects for the BlackBerry 10 platform, which is on track for the latter part of calendar 2012. Notwithstanding these strengths and opportunities, the business challenges we face over the next several quarters are significant and I am taking the necessary steps to address them,” said Thorsten Heins, President & CEO of Research In Motion. “In addition to delivering the BlackBerry 10 platform and refocusing resources on RIM’s key opportunities, such as BlackBerry Mobile Fusion and new integrated service offerings, we will also drive greater operational performance through a variety of initiatives including increased management accountability and process discipline. In parallel, we are undertaking a comprehensive review of strategic opportunities including partnerships and joint ventures, licensing, and other ways to leverage RIM’s assets and maximize value for our stakeholders.” The Company’s GAAP net loss for the fourth quarter of fiscal 2012 was $125 million, or $0.24 per share diluted, compared with GAAP net income of $265 million, or $0.51 per share diluted, in the prior quarter and GAAP net income of $934 million, or $1.78 per share diluted, in the same quarter of fiscal 2011. Adjusted net income for the fourth quarter was $418 million, or $0.80 per share diluted. Adjusted net income and adjusted diluted earnings per share for the fourth quarter exclude the impact of pre-tax charges of $355 million which are predominantly non-cash ($346 million after tax) for the impairment of goodwill and $267 million ($197 million after-tax) for an inventory provision taken primarily on certain BlackBerry7 products. These charges and their related impacts on GAAP net income and diluted earnings per share are summarized in the tables below. Reconciliation of GAAP gross margin, gross margin percentage, net income and diluted EPS to adjusted gross margin, gross margin percentage, net income and diluted EPS: (United States dollars, in millions except per share data)                                 For the quarter ended March 3, 2012                    ---------------------------------------------------------                                     Gross Margin                    Gross Margin(1)   %(1)(before   Net Income or    Diluted                     (before taxes)        taxes)          (Loss)        EPS                    --------------------------------------------------------- As reported         $        1,401          33.4%  $        (125)     (0.24) Adjustments: Impairment of  Goodwill(2)                     -             -             346       0.66 Inventory  Provision(3)                  267           6.4%            197       0.38                    --------------------------------------------------------- Adjusted            $        1,668          39.8%  $         418 $     0.80                    ---------------------------------------------------------                    --------------------------------------------------------- Note: Adjusted gross margin, adjusted net income and adjusted diluted earnings per share do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of adjusted gross margin, adjusted gross margin percentage, adjusted net income and adjusted diluted earnings per share enables the Company and its shareholders to better assess RIM's operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of RIM's GAAP results. (1) During the fourth quarter of fiscal 2012, the Company reported GAAP gross margin of $1.4 billion or 33.4% of revenue. Excluding the impact of charges primarily related to inventory valuation of certain BlackBerry 7 products, the adjusted gross margin was $1.7 billion, or 39.8% of revenue. (2) Subsequent to the fourth quarter of fiscal 2012, the Company performed a goodwill impairment test and based on the results of that test, the Company recorded a non-cash pre-tax goodwill impairment charge of $355 million, $346 million after tax. (3) During the fourth quarter of fiscal 2012, the Company recorded a pre-tax provision of approximately $267 million, $197 million after tax, which was mostly non-cash, primarily related to its inventory valuation of certain BlackBerry 7 products. The total of cash, cash equivalents, short-term and long-term investments was $2.1 billion as of March 3, 2012, compared to $1.5 billion at the end of the previous quarter, an increase of approximately $610 million from the prior quarter. Cash flow from operations in Q4 was approximately $1.1 billion, up from $900 million in Q3. Uses of cash included intangible asset additions of approximately $260 million and capital expenditures of approximately $190 million. Fiscal 2012 Results Revenue for the fiscal year ended March 3, 2012 was $18.4 billion, down 7% from $19.9 billion in fiscal 2011. The Company’s GAAP net income for fiscal 2012 was $1.2 billion, or $2.22 per share diluted, compared with GAAP net income of $3.4 billion, or $6.34 per share diluted in fiscal 2011. Adjusted net income for fiscal 2012 was $2.2 billion, or $4.20 per share diluted. Adjusted net income and adjusted diluted earnings per share for fiscal 2012 exclude the adjustments described above as well as the impact of pre-tax charges of $54 million ($40 million after tax) to revenue related to the service interruption experienced in the third quarter, $485 million ($356 million after tax) for the PlayBook inventory provision taken in the third quarter and $125 million ($96 million after tax) for the Company’s cost optimization program that was implemented in the second quarter of fiscal 2012. These charges and their related impacts on GAAP net income and diluted earnings per share are summarized in the tables below. Reconciliation of GAAP revenue, gross margin, gross margin percentage, net income and diluted EPS to adjusted revenue, gross margin, gross margin percentage, net income, and diluted EPS: (United States dollars, in millions except per share data)                                 For the year ended March 3, 2012                 ------------------------------------------------------------                                  Gross       Gross                     Revenue  Margin(1)  Margin%(1)                     (before    (before     (before                      taxes)     taxes)      taxes)   Net Income  Diluted EPS                 ------------------------------------------------------------ As reported     $    18,435 $    6,579        35.7% $     1,164 $       2.22 Adjustments: PlayBook  Inventory  Provision(2)             -        485         2.6%         356         0.68 Cost  Optimization  Program(3)               -         14           -           96         0.18 Q3 Service  Interruption(4)         54         54         0.3%          40         0.08 Impairment of  Goodwill(5)              -          -           -          346         0.66 Inventory  Provision(6)            19        267         1.4%         197         0.38                 ------------------------------------------------------------ Adjusted        $    18,508 $    7,399        40.0% $     2,199 $       4.20                 ------------------------------------------------------------                 ------------------------------------------------------------ Note: Adjusted revenue, adjusted gross margin, adjusted gross margin percentage, adjusted net income and adjusted diluted earnings per share do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of adjusted revenue, adjusted gross margin, adjusted gross margin percentage, adjusted net income and adjusted diluted earnings per share enables the Company and its shareholders to better assess RIM's operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of RIM's GAAP results. (1) During fiscal 2012, the Company reported GAAP gross margin of $6.6 billion, or 35.7% of revenue. Excluding the impact of charges related to the PlayBook Inventory Provision, the Cost Optimization Program, the Q3 Service Interruption and the Inventory Provision, the adjusted gross margin was $7.4 billion, or 40.0% of revenue. (2) During fiscal 2012, the Company recorded a pre-tax provision of approximately $485 million, $356 million after tax, related to its inventory valuation of BlackBerry PlayBook tablets. The charge was predominantly non- cash. (3) Cost of sales, research and development, and selling, marketing and administration expenses in fiscal 2012 included approximately $11 million, $18 million, and $67 million, respectively, in after-tax charges related to the cost optimization program to streamline operations across the Company. (4) During fiscal 2012, the Company experienced a service interruption which resulted in the loss of service revenue and the payment of service credits totally approximately $54 million, approximately $40 million after tax, related to the interruption in the availability of the Company's network. (5) Subsequent to fiscal 2012, the Company performed a goodwill impairment test and based on the results of that test, the Company recorded a non-cash pre-tax goodwill impairment charge of approximately $355 million, approximately $346 after tax. (6) In the fourth quarter of fiscal 2012, the Company recorded a pre-tax provision of approximately $267 million, $197 million after tax, which was mostly non-cash, primarily related to its inventory valuation of certain BlackBerry 7 products. Change to Guidance Practices and Outlook: The company expects continued pressure on revenue and earnings throughout fiscal 2013. Due to a desire to focus on long term value creation and the current business environment, RIM will no longer provide specific quantitative guidance. Some of the factors contributing to this include, ongoing weakness in the Company’s U.S. smartphone business, an increased focus on selling BlackBerry 7 smartphones to grow the subscriber base in advance of the BlackBerry 10 launch, increasing competitive pressure in the Company’s international markets and the introduction of certain new lower tier service pricing initiatives and a higher mix of sales coming from entry level products. Organizational and Board of Directors Update: Jim Balsillie, former Co-CEO of the Company, has resigned as a Director on the Company’s Board. “As I complete my retirement from RIM, I’m grateful for this remarkable experience and for the opportunity to have worked with outstanding professionals who helped turn a Canadian idea into a global success,” said Jim Balsillie. “On behalf of the Board and everyone at RIM, I would like to thank Jim for his 20 years of service to RIM,” said Barb Stymiest, Chair of RIM’s Board of Directors. “His energy, drive and enthusiasm helped build one of the most successful technology companies of our time.” In addition, David Yach will be retiring from his role as CTO, Software after 13 years with the Company and after 4 years with the company and following an open dialogue on the future of global operations, Jim Rowan, COO, Global Operations, has decided to pursue other interests. The Company is currently undertaking a search to hire a single COO with responsibilities to run the Company’s operations. “RIM would like to thank David Yach and Jim Rowan for their years of service and many contributions to RIM,” said Thorsten Heins, President and CEO. “We wish them well in their future pursuits.” Conference Call and Webcast A conference call and live webcast will be held beginning at 5 pm ET, March 29, 2012, which can be accessed by dialing 1-800-814-4859 (North America), (+1)416-644-3414 (outside North America) or through your personal computer or BlackBerry® PlayBook™ tablet atwww.rim.com/investors/events/index.shtml. A replay of the conference call will also be available at approximately 7 pm ET by dialing (+1)416-640-1917 and entering passcode 4466496#. A replay of the webcast will be available on your personal computer or BlackBerry PlayBook tablet by clicking the link above. This replay will be available until midnight ET, April 12, 2012. About Research In Motion Research In Motion (RIM), a global leader in wireless innovation, revolutionized the mobile industry with the introduction of the BlackBerry® solution in 1999. Today, BlackBerry products and services are used by millions of customers around the world to stay connected to the people and content that matter most throughout their day. Founded in 1984 and based in Waterloo, Ontario, RIM operates offices in North America, Europe, Asia Pacific and Latin America. RIM is listed on the NASDAQ Stock Market (NASDAQ: RIMM - News) and the Toronto Stock Exchange (TSX: RIM.TO - News). For more information, visit www.rim.com or www.blackberry.com. This news release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities laws, including: statements relating to RIM’s plans, strategies and objectives, statements relating to RIM’s ability to leverage its business strengths, the anticipated timing of the launch of RIM’s BlackBerry 10 platform, statements regarding the challenges RIM faces, opportunities and initiatives that RIM intends to consider or pursue, statements regarding RIM’s guidance practices in the future, and the Company’s expectations regarding revenue and earnings in fiscal 2012. The terms and phrases “discontinue”, “can”, “leverage”, “offering”, “challenges”, “plan”, “next several quarters”, “take”, “on track”, “refocus”, “opportunities”, “drive”, “initiatives”, “undertaking”, “maximize”, “outlook”, “will”, “ongoing”, “expects” and similar terms and phrases are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by RIM in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that RIM believes are appropriate in the circumstances, including but not limited to general economic conditions, product pricing levels and competitive intensity, supply constraints, the timing and success of new product introductions, RIM’s expectations regarding its business, strategy and prospects, and RIM’s confidence in the cash flow generation of its business. Many factors could cause RIM’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation: RIM’s ability to enhance current products and develop new products and services in a timely manner or at competitive prices, including risks related to further delays in new product introductions, such as the Company’s BlackBerry 10 smartphones; risks related to intense competition, including RIM’s ability to compete in the tablet market, and strategic alliances or transactions within the wireless communications industry; risks relating to RIM’s ability to maintain or grow its services revenue; RIM’s reliance on carrier partners and distributors; security risks and risks related to the collection, storage, transmission, use and disclosure of user and personal information; risks relating to network disruptions and other business interruptions, including costs, potential liabilities, lost revenue and reputational damage associated with service disruptions; RIM’s ability to manage inventory and asset risk; RIM’s ability to implement and realize the anticipated benefits of its Be Bold Excellence program (formerly referred to as the CORE program); RIM’s ability to maintain or increase its cash balance; potential additional charges relating to the impairment of goodwill or other intangible assets recorded on RIM’s balance sheet; RIM’s ability to attract and retain key personnel; RIM’s reliance on suppliers of functional components for its products and risks relating to its supply chain; RIM’s ability to maintain and enhance the BlackBerry brand; risks related to RIM’s international operations; risks related to government regulations, including regulations relating to encryption technology; RIM’s reliance on third-party network infrastructure developers, software platform vendors and service platform vendors; RIM’s ability to expand and manage its BlackBerry App World applications catalogue; RIM’s reliance on third-party manufacturers; risks relating to litigation, including litigation claims arising from the Company’s past practice of providing forward-looking guidance; potential defects in RIM’s products; RIM’s ability to manage its past growth and its ongoing development of service and support operations; disruptions to RIM’s business as a result of shareholder activism; risks related to intellectual property; and difficulties in forecasting RIM’s financial results, particularly over longer periods given the rapid technological changes, evolving industry standards, intense competition and short product life cycles that characterize the wireless communications industry. These risk factors and others relating to RIM are discussed in greater detail in the “Risk Factors” section of RIM’s Annual Information Form, which is included in its Annual Report on Form 40-F and the “Cautionary Note Regarding Forward-Looking Statements” section of RIM’s MD&A (copies of which filings may be obtained at www.sedar.com or www.sec.gov). These factors should be considered carefully, and readers should not place undue reliance on RIM’s forward-looking statements. RIM has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.                            Research In Motion Limited                    Incorporated under the Laws of Ontario   (United States dollars, in millions except share and per share amounts)                                  (unaudited)                    Consolidated Statements of Operations                          Three months ended            For the year ended                 ------------------------------------ -----------------------                  March 3, November 26, February 26,   March 3, February 26,                      2012         2011         2011       2012         2011 ---------------------------------------------------- ----------------------- Revenue         $   4,190  $     5,169  $     5,556  $  18,435  $    19,907 Cost of sales       2,789        3,759        3,103     11,856       11,082                 ------------------------------------ ----------------------- Gross margin        1,401        1,410        2,453      6,579        8,825                 ------------------------------------ -----------------------   Gross margin %     33.4%        27.3%        44.2%      35.7%        44.3% Operating  expenses  Research and   development         386          369          383      1,559        1,351  Selling,   marketing and   administration      650          567          705      2,604        2,400  Amortization         152          146          125        571          438  Impairment of   goodwill            355            -            -        355            -                 ------------------------------------ -----------------------                     1,543        1,082        1,213      5,089        4,189                 ------------------------------------ ----------------------- Income (Loss)  from operations     (142)         328        1,240      1,490        4,636  Investment   income, net           5            2            3         21            8                 ------------------------------------ ----------------------- Income (Loss)  before income  taxes               (137)         330        1,243      1,511        4,644 Provision for  (recovery of)  income taxes         (12)          65          309        347        1,233                 ------------------------------------ ----------------------- Net income  (loss)         $    (125) $       265  $       934  $   1,164  $     3,411                 ------------------------------------ -----------------------                 ------------------------------------ ----------------------- Earnings (loss)  per share   Basic         $   (0.24) $      0.51  $      1.79  $    2.22  $      6.36                 ------------------------------------ -----------------------                 ------------------------------------ -----------------------   Diluted       $   (0.24) $      0.51  $      1.78  $    2.22  $      6.34                 ------------------------------------ -----------------------                 ------------------------------------ ----------------------- Weighted-average  number of  common shares  outstanding  (000's)   Basic           524,160      524,139      522,764    524,101      535,986   Diluted         524,160      524,139      524,334    524,190      538,330 Total common  shares  outstanding  (000's)          524,160      524,160      523,869    524,160      523,869                          Research In Motion Limited                    Incorporated under the Laws of Ontario    (United States dollars, in millions except per share data) (unaudited)                         Consolidated Balance Sheets                                                      March 3,  February 26, As at                                                    2012          2011 ---------------------------------------------------------------------------- Assets Current   Cash and cash equivalents                       $     1,527   $     1,791   Short-term investments                                  247           330   Accounts receivable, net                              3,062         3,955   Other receivables                                       496           324   Inventories                                           1,027           618   Income taxes receivable                                 135             -   Other current assets                                    365           241   Deferred income tax asset                               197           229                                                  ---------------------------                                                         7,056         7,488 Long-term investments                                     337           577 Property, plant and equipment, net                      2,748         2,504 Goodwill                                                  304           508 Intangible assets, net                                  3,286         1,798                                                  ---------------------------                                                   $    13,731   $    12,875                                                  ---------------------------                                                  --------------------------- Liabilities  Current   Accounts payable                                $       744   $       832   Accrued liabilities                                   2,382         2,511   Income taxes payable                                      -           179   Deferred revenue                                        263           108                                                  ---------------------------                                                         3,389         3,630 Deferred income tax liability                             232           276 Income taxes payable                                       10            31                                                  ---------------------------                                                         3,631         3,937                                                  --------------------------- Shareholders' Equity Capital stock and additional paid-in capital            2,446         2,359 Treasury stock                                           (299)         (160) Retained earnings                                       7,913         6,749 Accumulated other comprehensive income (loss)              40           (10)                                                  ---------------------------                                                        10,100         8,938                                                  ---------------------------                                                   $    13,731   $    12,875                                                  ---------------------------                                                  ---------------------------                         Research In Motion Limited                   Incorporated under the Laws of Ontario   (United States dollars, in millions except per share data) (unaudited)                   Consolidated Statements of Cash Flows                                               For the year ended                                     --------------------------------------                                         March 3. 2012   February 26, 2011 -------------------------------------------------------------------------- Cash flows from operating activities Net income                           $          1,164  $            3,411 Adjustments to reconcile net income  to net cash provided by operating activities:  Amortization                                   1,523                 927  Deferred income taxes                             (5)                 92  Income taxes payable                             (21)                  2  Stock-based compensation                          97                  72  Impairment of goodwill                           355                   -  Other                                              9                   1 Net changes in working capital items             (210)               (496)                                     -------------------------------------- Net cash provided by operating  activities                                     2,912               4,009                                     -------------------------------------- Cash flows from investing activities Acquisition of long-term investments             (355)               (784) Proceeds on sale or maturity of  long-term investments                            376                 893 Acquisition of property, plant and  equipment                                       (902)             (1,039) Acquisition of intangible assets               (2,217)               (557) Business acquisitions, net of cash  acquired                                        (226)               (494) Acquisition of short-term  investments                                     (250)               (503) Proceeds on sale or maturity of  short-term investments                           550                 786                                     -------------------------------------- Net cash used in investing  activities                                    (3,024)             (1,698)                                     -------------------------------------- Cash flows from financing activities Issuance of common shares                           9                  67 Tax deficiencies related to stock-  based compensation                                (2)                 (1) Purchase of treasury stock                       (156)                (76) Common shares repurchased                           -              (2,077)                                     -------------------------------------- Net cash used in financing  activities                                      (149)             (2,087)                                     -------------------------------------- Effect of foreign exchange gain  (loss) on cash and cash equivalents               (3)                 16                                     -------------------------------------- Net increase (decrease) in cash and  cash equivalents for the period                 (264)                240 Cash and cash equivalents, beginning  of period                                      1,791               1,551                                     -------------------------------------- Cash and cash equivalents, end of  period                              $          1,527  $            1,791                                     --------------------------------------                                     -------------------------------------- As at                                   March 3, 2012   November 26, 2011 -------------------------------------------------------------------------- Cash and cash equivalents            $          1,527  $            1,123 Short-term investments                            247                 184 Long-term investments                             337                 195                                     --------------------------------------                                      $          2,111  $            1,502                                     --------------------------------------                                     --------------------------------------

Pandora just released its earnings report for Q4 and Fiscal Year 2012 (ending in January), missing analysts’ estimates. Revenue for the year was $274.3 million, up 99% year-over-year. Q4 revenue was $81.3 million, up 71% year-over-year. Listener hours totaled 8.2 billion for the year, up 109% year-over-year. Listener hours were 2.7 billion for the quarter, up 99% year-over-year. Active users reached a record 47 million, up 62% year-over-year. “The fourth quarter was a strong finish to fiscal 2012, which was highlighted by record revenue, radio market share, listening hours and active users,” stated Joe Kennedy, Chairman & CEO of Pandora.  ”Reflecting on our first fiscal year as a public company, we have many accomplishments to be proud of and much to look forward to in the year ahead.  Pandora continues to rapidly disrupt the radio industry and has only just begun to realize the potential of our $37 billion U.S. market opportunity.” Stock was down -2.37‎ (-16.61%‎) in after hours trading. Here’s the release: OAKLAND, Calif., March 6, 2012 /PRNewswire/ — Pandora (NYSE: P), the leading Internet radio service, today announced financial results for the fourth quarter and full fiscal year 2012 ended onJanuary 31, 2012. (Logo:  http://photos.prnewswire.com/prnh/20110615/SF20192LOGO) “The fourth quarter was a strong finish to fiscal 2012, which was highlighted by record revenue, radio market share, listening hours and active users,” stated Joe Kennedy, Chairman & CEO of Pandora.  ”Reflecting on our first fiscal year as a public company, we have many accomplishments to be proud of and much to look forward to in the year ahead.  Pandora continues to rapidly disrupt the radio industry and has only just begun to realize the potential of our $37 billion U.S. market opportunity.” Fiscal 4Q12 and Fiscal Year 2012 Financial Results Total Revenue: For the fourth quarter of fiscal 2012, total revenue was $81.3 million, a 71% year-over-year increase.  Advertising revenue was $72.1 million, a 74% year-over-year increase.  Subscription and other revenue was $9.2 million, a 51% year-over-year increase.   For the fiscal year 2012, total revenue was $274.3 million, a 99% year-over-year increase.  Total advertising revenue was$240.0 million, a 101% year-over-year increase.  Total subscription and other revenue was $34.3 million, an 87% year-over-year increase. Net Loss per Share:  For the fourth quarter of fiscal 2012, on a GAAP basis, net loss per share was ($0.05). Non-GAAP net loss per share was ($0.03), excluding approximately $3.4 million in stock-based compensation. Both GAAP and non-GAAP calculations are based on 162.3 million weighted average basic shares outstanding and assume minimal tax expense due to our net operating loss position.   For the fiscal year 2012, on a GAAP basis, net loss attributable to common shareholders per share was ($0.19).  Non-GAAP net loss per common share was ($0.02), excluding approximately $13.7 million in stock-based compensation and warrant remeasurement expenses.  GAAP and non-GAAP calculations are based on 106.0 million and 158.3 million weighted average basic common shares outstanding, respectively, and assume minimal tax expense due to our net operating loss position.   Cash: The company ended the fourth quarter of fiscal 2012 with $90.6 million in cash, cash equivalents and short-term investments, compared with $90.8 million at the end of the prior quarter.  For the fourth quarter of fiscal 2012, Pandora generated approximately $2.4 million in cash from operating activities, compared to $1.0 million generated in the year-ago quarter.  For the 2012 fiscal year, Pandora generated approximately $5.9 million in cash from operating activities compared to generating $3.2 million in cash from operating activities in fiscal 2011. Other Business Metrics Total listener hours: Total listener hours grew 99% to approximately 2.7 billion for the fourth quarter of fiscal 2012, compared to approximately 1.3 billion for the fourth quarter of fiscal 2011.   For the fiscal year 2012, total listener hours grew 109% to approximately 8.2 billion, compared to approximately 3.8 billion for the fiscal year 2011. Guidance Based on information available as of March 6, 2012, the company is providing financial guidance for the first quarter and fiscal year 2013 as follows:   1Q13  Guidance:  Revenue is expected to be in the range of $72 million to $75 million.  Non-GAAP net loss per share is expected to be between ($0.18) and ($0.21).  Non-GAAP net loss per share excludes stock-based compensation expense, assumes minimal tax expense given our net operating loss position, and 164 million weighted average shares outstanding for the first quarter fiscal 2013. Fiscal 2013 Guidance:  Revenue is expected to be in the range of $410 million to $420 million.  Non-GAAP net loss per share is expected to be between ($0.11) and ($0.16).  Non-GAAP net loss per share excludes stock-based compensation expense, assumes minimal tax expense given our net operating loss position, and 166 million weighted average shares outstanding for fiscal 2013. 4Q12 and Fiscal Year 2012 Financial Results Conference Call: Pandora will host a conference call today at 2 p.m. PT/ 5 p.m. ET to discuss the fourth quarter and full fiscal year 2012 financial results with the investment community. A live webcast of the event will be available on the Pandora Investor Relations website at http://investor.pandora.com. A live domestic dial-in is available at (877) 355-0067 or internationally at (443) 853-1239. A domestic replay will be available at (855) 859-2056 or internationally at (404) 537-3406, using passcode 35587381, and available via webcast until March 20, 2012. About Pandora Pandora gives people music they love anytime, anywhere, through connected devices. (OK, we’ve added comedy as well so we’re also up for playing some jokes you’ll love.) Personalized stations launch instantly with the input of a single “seed” – a favorite artist, song or genre. The Music Genome Project®, a deeply detailed hand-built musical taxonomy, powers the personalization of Pandora® internet radio by using musicological “DNA” and constant listener feedback to craft personalized stations from a growing collection of hundreds of thousands of recordings. Tens of millions of people in the U.S. turn on Pandora to hear music they love.   www.pandora.com “Safe harbor” Statement: This press release contains forward-looking statements within the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding expected GAAP revenue and non-GAAP EPS. These forward-looking statements are based on Pandora’s current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: our operation in an emerging market and our relatively new and evolving business model; our ability to increase our listener base and listener hours; our ability to attract and retain advertisers; our ability to generate additional revenue on a cost-effective basis; competitive factors; our ability to continue operating under existing laws and licensing regimes; our ability to establish and maintain relationships with makers of mobile devices, consumer electronic products and automobiles; our ability to manage our growth; our ability to continue to innovate and keep pace with changes in technology and our competitors; risks related to service interruptions or security breaches; and general economic conditions worldwide. Further information on these factors and other risks that may affect our business is included in filings we make with the Securities and Exchange Commission (SEC) from time to time, including our Registration Statement on Form S-1 and our Form 10-Q for the quarter ended October 31, 2011, particularly under the heading “Risk Factors.” The financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto included in the company’s most recent reports on Form 10-K and Form 10-Q, each as they may be amended from time to time.  The company’s results of operations for the fourth quarter and full year ended January 31, 2012 are not necessarily indicative of the company’s operating results for any future periods. These documents are available online from the SEC or on the SEC Filings section of the Investor Relations section of our website at investor.pandora.com. Information on our website is not part of this release. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events. Non-GAAP Financial Measures To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), we use the following non-GAAP measures of financial performance: non-GAAP net income (loss) and non-GAAP earnings (loss) per share. The presentation of this additional financial information is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. These non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. In addition, these non-GAAP financial measures may be different from the non-GAAP financial measures used by other companies. These non-GAAP measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. Management compensates for these limitations by reconciling these non-GAAP financial measures to the most comparable GAAP financial measures within our earnings press releases. These non-GAAP financial measures differ from GAAP in that they exclude stock-based compensation, which consists of expenses for stock options and other awards under our equity incentive plans. The non-GAAP net income (loss) and non-GAAP historical earnings (loss) per share measures also exclude the applicable change in fair value of certain warrants issued by us. The change in fair value of certain warrants issued by us is included within other expense, and stock-based compensation is included in the following cost and expense line items of our GAAP presentation: Cost of revenue   Product development   Marketing and sales   General and administrative   Although stock-based compensation is an expense for us and is viewed as a form of compensation, management excludes stock-based compensation from our non-GAAP measures for purposes of evaluating our continuing operating performance primarily because it is a non-cash expense not believed by management to be reflective of our core business, ongoing operating results or future outlook. Furthermore, determining the fair value of both stock-based compensation and stock-derived warrants involves a high degree of estimation and judgment such that the expense recorded may bear little resemblance to the actual value realized upon the future exercise or termination of the related stock-based instruments. In addition, the value of stock-based instruments is determined using formulas that incorporate variables, such as market volatility, that are beyond our control. We believe these non-GAAP financial measures serve as useful metrics for our management and investors because they enable a better understanding of the long-term performance of our core business and facilitate comparisons of our operating results over multiple periods and to those of peer companies, and, when taken together with the corresponding GAAP financial measures and our reconciliations, enhance investors’ overall understanding of our current financial performance.