Google to increase spending to compete with rivals

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Mountain View, Calif.—Search giant Google plans to increase capital spending this year to more than $500 million, compared with $319 million in 2004, according to its first annual report filed with the Securities and Exchange Commission since going public.

Google said it intends to expand its advertiser, Google Network member and user bases. and continue to expand internationally. It also plans to continue hiring aggressively, particularly in the research and development area, as well as to continue to increase its investment in sales and marketing.

The company, which generated 99% of its $ 3.2 billion in revenue in 2004 from advertising, said in the filing that competition from Microsoft Corp., Yahoo!, traditional media companies and other Internet-based companies could adversely affect its business.

—Carol Krol

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