Google hedges against foreign currency swings
Search giant has started a program to protect its financial results from changes in exchange rates of foreign currencies compared with the U.S. dollar.
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In recent months, financial analysts have expressed concern that Google's financial results could be hurt by foreign-exchange rate changes. But Google said Thursday that it has taken measures to insulate itself from the potential problem.
Specifically, Google has invested about $80 million in hedging programs that counteract currency swings, Chief Financial Officer Patrick Pichette said on a conference call to discuss Google's third-quarter financial results. The foreign-exchange issue that currently afflicts Google is that the dollar is growing stronger relative to other currencies right now, which effectively devalues revenue from other countries.
The hedging programs "should be viewed as an insurance policy," Pichette said.
Google has hedging programs for the euro, the Canadian dollar, and the U.K. pound, and plans to extend the program to other foreign currencies, he said.
"Our hedging programs are working well," Pichette said.
In the third quarter, 51 percent of Google revenue came from outside the United States, Google said.