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To: GVTucker who wrote (67265)	3/9/2005 9:29:48 AM
From: rkral	Read Replies (1) \| Respond to of 77400

OT ... GVTucker, re "The fact is that Google DID expense options out of the gate." It just looks that way, because GOOG granted a lot of options with "below-market" exercises prior to the IPO; judging by the numbers ... way below. "As permitted by Statement of Financial Accounting Standards (“SFAS”) No. 123, Accounting for Stock-based Compensation (“SFAS 123”), the Company accounts for employee stock-based compensation in accordance with Accounting Principles Board Opinion (“APB”) No. 25, Accounting for Stock Issued to Employees (“APB 25”), and related interpretations. Under APB 25, deferred compensation for options granted to employees is equal to its intrinsic value, determined as the difference between the exercise price and the reassessed value for accounting purposes of the underlying stock on the date of grant. " Ron

To: GVTucker who wrote (67265)	3/9/2005 4:15:29 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 77400

wrong- Google did not expense EMPLOYEE options. They were forced to expense options that were used in payment to services already rendered like headhunter fees. If you are under the impression that google is expensing employee options now, you are incorrect. Although more than 500 companies have voluntarily begun deducting employees' options expenses from earnings -- something that will likely be mandatory in a few months -- Google isn't among them. As a result, its earnings will be legally, but artificially, inflated, and shareholders who want to know the truth will have to comb through the footnotes. Of course, Google will continue to expense some stock-based expenses, such as payments to vendors -- about $230 million worth. But by not expensing employee options, it will avoid a huge hit to earnings. yahoo.businessweek.com