offerings. The expected increase in cost of revenue may be partially mitigated to the extent we are able to realize
improvements in server performance and the efficiency of our technical operations. We expect cost of revenue in
absolute dollars and as a percentage of revenue to increase in 2013 compared to 2012 due to our investment in
technical infrastructure.
million in 2012 resulting primarily from the recognition of expenses related to Pre-2011 RSUs triggered by the
completion of our IPO in May 2012 and, to a lesser extent, Post-2011 RSUs. Payroll and benefits expense also
increased due to a 73% growth in employee headcount in engineering, design, product management, and other
technical functions. This investment supported our efforts to improve existing products and build new products
for users, developers, and marketers.
2011 for share-based compensation expense related to Post-2011 RSUs. Payroll and benefits expense also
increased due to a 57% growth in employee headcount in engineering, design, product management, and other
technical functions. This investment supported our efforts to improve existing products and build new products
for users, developers, and marketers.
in 2012 due to the large share-based compensation expense in the second quarter of 2012 associated with Pre-
2011 RSUs triggered by the completion of our IPO.
2012 resulting primarily from the recognition of expenses related to Pre-2011 RSUs triggered by the completion
of our IPO in May 2012 and, to a lesser extent, Post-2011 RSUs. Payroll and benefits expenses also increased
due to a 19% increase in employee headcount to support global sales, business development and customer
service. An increase in our user-, developer-, and advertiser-facing marketing expense also contributed to the
increase in 2012.