10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________________________

FORM 10-Q

________________________________________________________________________________________

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number: 001-37580

________________________________________________________________________________________

Alphabet Inc.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________

Delaware	61-1767919
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

1600 Amphitheatre Parkway

Mountain View, CA 94043

(Address of principal executive offices, including zip code)

(650) 253-0000

(Registrant’s telephone number, including area code) 

________________________________________________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer (Do not check if a smaller reporting company)	¨	Smaller reporting company	¨
Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨    No ý

As of July 17, 2017, there were 298,044,925 shares of Alphabet’s Class A common stock outstanding, 47,100,911 shares of Alphabet's Class B common stock outstanding, and 347,733,652 shares of Alphabet's Class C capital stock outstanding.

Table of Contents Alphabet Inc.

Alphabet Inc.

Form 10-Q

For the Quarterly Period Ended June 30, 2017

TABLE OF CONTENTS

		Page No.
Note About Forward-Looking Statements		1
PART I. FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)	3
	Consolidated Balance Sheets - December 31, 2016 and June 30, 2017	3
	Consolidated Statements of Income - Three and Six Months Ended June 30, 2016 and 2017	4
	Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2016 and 2017	5
	Consolidated Statements of Cash Flows - Six Months Ended June 30, 2016 and 2017	6
	Notes to Consolidated Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4	Controls and Procedures	44
PART II. OTHER INFORMATION
Item 1	Legal Proceedings	45
Item 1A	Risk Factors	45
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 6	Exhibits	45
	Signature	46
	Exhibit Index	47

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NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding:

• the growth of our business and revenues and our expectations about the factors that influence our success and trends in our business;

• our plans to continue to invest in new businesses, products, services and technologies, systems, facilities, and infrastructure, to continue to hire aggressively and provide competitive compensation programs, as well as to continue to invest in acquisitions;

• seasonal fluctuations in internet usage and advertiser expenditures, underlying business trends such as traditional retail seasonality, and macroeconomic conditions, which are likely to cause fluctuations in our quarterly results;

• the potential for declines in our revenue growth rate;

• our expectation that we will continue to take steps to improve the relevance of the ads we deliver and to reduce the number of accidental clicks;

• fluctuations in the rate of change in revenue and revenue growth, as well as the rate of change in paid clicks and average cost-per-click and various factors contributing to such fluctuations;

• our expectation that our foreign exchange risk management program will not fully offset our net exposure to fluctuations in foreign currency exchange rates;

• the expected variability of costs related to hedging activities under our foreign exchange risk management program;

• our expectation that our cost of revenues, research and development expenses, sales and marketing expenses, and general and administrative expenses will increase in dollars and may increase as a percentage of revenues;

• our potential exposure in connection with pending investigations, proceedings, and other contingencies;

• our expectation that our monetization trends will fluctuate, which could affect our revenues and margins in the future;

• our expectation that our traffic acquisition costs will increase in the future;

• our expectation that our results will be impacted by our performance in international markets as users in developing economies increasingly come online;

• our expectation that the portion of our revenues that we derive from non-advertising revenues will continue to increase;

• our expectation that our other income (loss), net, will fluctuate in the future as it is largely driven by market dynamics;

• estimates of our future compensation expenses;

• fluctuations in our effective tax rate;

• the sufficiency of our sources of funding;

• our payment terms to certain advertisers, which may increase our working capital requirements;

• fluctuations in our capital expenditures;

• our expectations related to the operating structure implemented pursuant to the Alphabet holding company reorganization;

• the expected timing and amount of Alphabet Inc.'s stock repurchases;

as well as other statements regarding our future operations, financial condition and prospects, and business strategies. Forward-looking statements may appear throughout this report and other documents we file with the Securities and Exchange Commission (SEC), including without limitation, the following sections: Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q and Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as may be updated in our subsequent Quarterly Reports on Form 10-Q. Forward-looking statements generally can be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will be," "will continue," "may," "could," "will likely result," and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and those discussed in other documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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As used herein, "Alphabet," "the company," "we," "us," "our," and similar terms include Alphabet Inc. and its subsidiaries, unless the context indicates otherwise.

"Alphabet," "Google," and other trademarks of ours appearing in this report are our property. This report contains additional trade names and trademarks of other companies. We do not intend our use or display of other companies' trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Alphabet Inc.

CONSOLIDATED BALANCE SHEETS

(in millions, except share amounts which are reflected in thousands,

and par value per share amounts)

	As of December 31, 2016			As of June 30, 2017
				(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	12,918		$	15,711
Marketable securities	73,415			79,002
Total cash, cash equivalents, and marketable securities	86,333			94,713
Accounts receivable, net of allowance of $467 and $546	14,137			14,003
Income taxes receivable, net	95			874
Inventory	268			398
Prepaid revenue share, expenses and other assets	4,575			2,398
Total current assets	105,408			112,386
Prepaid revenue share, expenses and other assets, non-current	1,819			2,004
Non-marketable investments	5,878			6,642
Deferred income taxes	383			376
Property and equipment, net	34,234			37,676
Intangible assets, net	3,307			2,933
Goodwill	16,468			16,604
Total assets	$	167,497		$	178,621
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,041		$	2,488
Accrued compensation and benefits	3,976			3,271
Accrued expenses and other current liabilities	6,144			8,560
Accrued revenue share	2,942			3,007
Deferred revenue	1,099			1,226
Income taxes payable, net	554			133
Total current liabilities	16,756			18,685
Long-term debt	3,935			3,955
Deferred revenue, non-current	202			345
Income taxes payable, non-current	4,677			4,128
Deferred income taxes	226			369
Other long-term liabilities	2,665			2,853
Total liabilities	28,461			30,335
Commitments and Contingencies (Note 11)
Stockholders’ equity:
Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding	0			0
Class A and Class B common stock, and Class C capital stock and additional paid-in capital, $0.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000, Class C 3,000,000); 691,293 (Class A 296,992, Class B 47,437, Class C 346,864) and 692,876 (Class A 298,043, Class B 47,101, Class C 347,732) shares issued and outstanding	36,307			38,509
Accumulated other comprehensive loss	(2,402		)	(1,728		)
Retained earnings	105,131			111,505
Total stockholders’ equity	139,036			148,286
Total liabilities and stockholders’ equity	$	167,497		$	178,621

See accompanying notes.

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Alphabet Inc.

CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share amounts; unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016			2017
Revenues	$	21,500	$	26,010	$	41,757		$	50,760
Costs and expenses:
Cost of revenues	8,130		10,373		15,778			20,168
Research and development	3,363		4,172		6,730			8,114
Sales and marketing	2,415		2,897		4,802			5,541
General and administrative	1,624		1,700		3,137			3,501
European Commission fine	0		2,736		0			2,736
Total costs and expenses	15,532		21,878		30,447			40,060
Income from operations	5,968		4,132		11,310			10,700
Other income (expense), net	151		245		(62		)	496
Income before income taxes	6,119		4,377		11,248			11,196
Provision for income taxes	1,242		853		2,164			2,246
Net income	$	4,877	$	3,524	$	9,084		$	8,950
Basic net income per share of Class A and B common stock and Class C capital stock	$	7.11	$	5.09	$	13.23		$	12.94
Diluted net income per share of Class A and B common stock and Class C capital stock	$	7.00	$	5.01	$	13.01		$	12.74

See accompanying notes.

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Alphabet Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions; unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Net income	$	4,877		$	3,524		$	9,084		$	8,950
Other comprehensive income:
Change in foreign currency translation adjustment	(119		)	565			37			1,016
Available-for-sale investments:
Change in net unrealized gains (losses)	200			86			556			225
Less: reclassification adjustment for net (gains) losses included in net income	14			26			183			51
Net change (net of tax effect of $79, $0, $198, and $0)	214			112			739			276
Cash flow hedges:
Change in net unrealized gains (losses)	100			(230		)	116			(459		)
Less: reclassification adjustment for net (gains) losses included in net income	(52		)	(6		)	(169		)	(159		)
Net change (net of tax effect of $28, $143, $9, and $292)	48			(236		)	(53		)	(618		)
Other comprehensive income	143			441			723			674
Comprehensive income	$	5,020		$	3,965		$	9,807		$	9,624

See accompanying notes.

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Alphabet Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)

	Six Months Ended
	June 30,
	2016			2017
Operating activities
Net income	$	9,084		$	8,950
Adjustments:
Depreciation and impairment of property and equipment	2,426			2,711
Amortization and impairment of intangible assets	435			417
Stock-based compensation expense	2,997			4,012
Deferred income taxes	364			538
Loss on marketable and non-marketable investments, net	294			84
Other	91			34
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	(17		)	431
Income taxes, net	1,680			(1,779		)
Prepaid revenue share, expenses and other assets	161			(454		)
Accounts payable	(221		)	119
Accrued expenses and other liabilities	(471		)	1,687
Accrued revenue share	(48		)	6
Deferred revenue	3			195
Net cash provided by operating activities	16,778			16,951
Investing activities
Purchases of property and equipment	(4,580		)	(5,339		)
Proceeds from disposals of property and equipment	29			54
Purchases of marketable securities	(45,588		)	(39,676		)
Maturities and sales of marketable securities	37,789			34,238
Purchases of non-marketable investments	(681		)	(694		)
Maturities and sales of non-marketable investments	98			118
Cash collateral related to securities lending	(363		)	0
Investments in reverse repurchase agreements	(50		)	0
Acquisitions, net of cash acquired, and purchases of intangible assets	(72		)	(143		)
Proceeds from collection of notes receivable	0			1,419
Net cash used in investing activities	(13,418		)	(10,023		)
Financing activities
Net payments related to stock-based award activities	(1,610		)	(2,093		)
Repurchases of capital stock	(3,693		)	(2,745		)
Proceeds from issuance of debt, net of costs	5,753			0
Repayments of debt	(6,801		)	(56		)
Proceeds from sale of subsidiary shares	0			480
Net cash used in financing activities	(6,351		)	(4,414		)
Effect of exchange rate changes on cash and cash equivalents	69			279
Net increase (decrease) in cash and cash equivalents	(2,922		)	2,793
Cash and cash equivalents at beginning of period	16,549			12,918
Cash and cash equivalents at end of period	$	13,627		$	15,711

See accompanying notes.

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Alphabet Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Google Inc. (Google) was incorporated in California in 1998 and re-incorporated in Delaware in 2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc. (Alphabet) became the successor issuer to Google. We generate revenues primarily by delivering relevant, cost-effective online advertising.

Basis of Consolidation

The consolidated financial statements of Alphabet include the accounts of Alphabet and all wholly-owned subsidiaries as well as all variable interest entities where we are the primary beneficiary. All intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

The accompanying Consolidated Balance Sheet as of June 30, 2017, the Consolidated Statements of Income for the three and six months ended June 30, 2016 and 2017, the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2016 and 2017, and the Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2017 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of June 30, 2017, our results of operations for the three and six months ended June 30, 2016 and 2017, and our cash flows for the six months ended June 30, 2016 and 2017. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017.

These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on February 2, 2017.

Use of Estimates

Preparation of the consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable and sales allowances, fair values of financial instruments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, income taxes, and contingent liabilities, among others. We base our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Fair Value of Financial Instruments

Our financial assets and financial liabilities including cash equivalents, marketable securities, foreign currency and interest rate derivative contracts, and non-marketable debt securities are measured and recorded at fair value on a recurring basis. We measure certain financial assets at fair value for disclosure purposes, as well as on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. Our other current financial assets and our other current financial liabilities have fair values that approximate their carrying value.

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where

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applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Level 3 - Unobservable inputs that are supported by little or no market activities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-01 (ASU 2016-01) "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2017. The most significant impact to our consolidated financial statements relates to the recognition and measurement of equity investments at fair value in our consolidated statement of income. We expect to elect the measurement alternative, defined as cost, less impairments, adjusted by observable price changes. We anticipate that the adoption of ASU 2016-01 will increase the volatility of our other income (expense), net, as a result of the remeasurement of our equity securities upon the occurrence of observable price changes and impairments.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease recognition requirements in Accounting Standards Codification (ASC) Topic 840, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. Topic 842 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2018. Early adoption by public entities is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and there are certain optional practical expedients that an entity may elect to apply. Full retrospective application is prohibited. We anticipate that the adoption of Topic 842 will materially affect our Consolidated Balance Sheets. We are in the process of implementing changes to our systems and processes in conjunction with our review of existing lease agreements. We plan to adopt Topic 842 effective January 1, 2019 and we are evaluating the use of the optional practical expedients.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2019. We are currently in the process of evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04) “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019; early adoption is permitted. We currently anticipate that the adoption of ASU 2017-04 will not have a material impact on our consolidated financial statements.

Recently adopted accounting pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) "Revenue from Contracts with Customers." Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605), and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We adopted Topic 606 as of January 1, 2017 using the modified retrospective transition method. See Note 2 for further details.

In January 2017, the FASB issued Accounting Standards Update No. 2017-01 (ASU 2017-01) “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASU 2017-01 provides guidance to evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. If substantially all of the

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fair value of the gross assets acquired (or disposed of) is concentrated in a single asset or a group of similar assets, the assets acquired (or disposed of) are not considered a business. We adopted ASU 2017-01 as of January 1, 2017 on a prospective basis.

Prior Period Reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation.

Note 2. Revenues

Adoption of ASC Topic 606, "Revenue from Contracts with Customers"

On January 1, 2017, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2017. Results for reporting periods beginning after January 1, 2017 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

We recorded a net reduction to opening retained earnings of $15 million as of January 1, 2017 due to the cumulative impact of adopting Topic 606, with the impact primarily related to our non-advertising revenues. The impact to revenues as a result of applying Topic 606 was an increase of $8 million and $22 million for the three and six months ended June 30, 2017, respectively.

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

The following table presents our revenues disaggregated by revenue source (in millions, unaudited). Sales and usage-based taxes are excluded from revenues.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016(1)		2017		2016(1)		2017
Google properties	$	15,400	$	18,425	$	29,728	$	35,828
Google Network Members' properties	3,743		4,247		7,435		8,255
Google advertising revenues	19,143		22,672		37,163		44,083
Google other revenues	2,172		3,090		4,244		6,185
Other Bets revenues	185		248		350		492
Total revenues(2)	$	21,500	$	26,010	$	41,757	$	50,760

⁽¹⁾  As noted above, prior period amounts have not been adjusted under the modified retrospective method.

⁽²⁾  Revenues include hedging gains of $78 million and $3 million for the three months ended June 30, 2016 and 2017, respectively, and $247 million and $220 million for the six months endedJune 30, 2016 and 2017, respectively, which do not represent revenues recognized from contracts with customers.

The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016		2017
United States	$	10,035	$	12,322	$	19,416	$	24,091
EMEA(1)	7,485		8,545		14,615		16,636
APAC(1)	2,904		3,730		5,703		7,349
Other Americas(1)	1,076		1,413		2,023		2,684
Total revenues(2)	$	21,500	$	26,010	$	41,757	$	50,760

⁽¹⁾  Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific (APAC); and Canada and Latin America (Other Americas).

⁽²⁾  Revenues include hedging gains for the three and six months endedJune 30, 2016 and 2017.

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Advertising Revenues

We generate revenues primarily by delivering advertising on Google properties and Google Network Members’ properties.

Google properties revenues consist primarily of advertising revenues generated on Google.com, the Google app, YouTube, and other Google owned and operated properties like Gmail, Google Maps, and Google Play.

Google Network Members’ properties revenues consist primarily of advertising revenues generated from placing ads on Google Network Members’ properties.

Our customers generally purchase advertising inventory through AdWords, DoubleClick Bid Manager, and DoubleClick AdExchange, among others.

Most of our customers pay us on a cost-per-click basis (CPC), which means that an advertiser pays us only when a user clicks on an ad on Google properties or Google Network Members' properties or views certain YouTube ad formats like TrueView. For these customers, we recognize revenue each time a user clicks on the ad or when a user views the ad for a specified period of time.

We also offer advertising on other bases such as cost-per-impression (CPM), which means an advertiser pays us based on the number of times their ads are displayed on Google properties or Google Network Members’ properties. For these customers, we recognize revenue each time an ad is displayed.

Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration.

For ads placed on Google Network Members’ properties, we evaluate whether we are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis). Generally, we report advertising revenues for ads placed on Google Network Members’ properties on a gross basis, that is, the amounts billed to our customers are recorded as revenues, and amounts paid to publishers are recorded as cost of revenues. We are the principal because we control the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to monetize the advertising inventory, being primarily responsible to our customers, having discretion in establishing pricing, or a combination of these.

Other Revenues

Google other revenues and Other Bets revenues consist primarily of revenues from:

• Apps, in-app purchases, and digital content in the Google Play store;

• Google Cloud offerings;

• Hardware; and

• Other miscellaneous products and services.

As it relates to Google other revenues, the most significant judgment is determining whether we are the principal or agent for app sales and in-app purchases through the Google Play store. We report revenues from these transactions on a net basis because our performance obligation is to facilitate a transaction between app developers and end users, for which we earn a commission. Consequently, the portion of the gross amount billed to end users that is remitted to app developers is not reflected as revenues.

Arrangements with Multiple Performance Obligations

Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost plus margin.

Deferred Revenues

We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. The increase in the deferred revenue balance for the six months endedJune 30, 2017 is primarily driven by cash payments received or due in advance of satisfying our performance obligations, offset by $637 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2016.

Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer.

Practical Expedients and Exemptions

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We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses.

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Note 3. Financial Instruments

We classify our cash equivalents and marketable securities within Level 1 or Level 2 in the fair value hierarchy because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. We classify our foreign currency and interest rate derivative contracts primarily within Level 2 in the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.

Cash, Cash Equivalents, and Marketable Securities

The following tables summarize our cash, cash equivalents, and marketable securities by significant investment categories as of December 31, 2016 and June 30, 2017 (in millions):

	As of December 31, 2016
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	7,078	$	0	$	0		$	7,078	$	7,078	$	0
Level 1:
Money market and other funds	4,783		0		0			4,783		4,783		0
U.S. government notes	38,454		46		(215		)	38,285		613		37,672
Marketable equity securities	160		133		0			293		0		293
	43,397		179		(215		)	43,361		5,396		37,965
Level 2:
Time deposits(1)	142		0		0			142		140		2
Mutual funds(2)	204		7		0			211		0		211
U.S. government agencies	1,826		0		(11		)	1,815		300		1,515
Foreign government bonds	2,345		18		(7		)	2,356		0		2,356
Municipal securities	4,757		15		(65		)	4,707		2		4,705
Corporate debt securities	12,993		114		(116		)	12,991		2		12,989
Agency mortgage-backed securities	12,006		26		(216		)	11,816		0		11,816
Asset-backed securities	1,855		2		(1		)	1,856		0		1,856
	36,128		182		(416		)	35,894		444		35,450
Total	$	86,603	$	361	$	(631	)	$	86,333	$	12,918	$	73,415

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	As of June 30, 2017
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
	(unaudited)
Cash	$	7,385	$	0	$	0		$	7,385	$	7,385	$	0
Level 1:
Money market and other funds	2,781		0		0			2,781		2,781		0
U.S. government notes	49,502		14		(176		)	49,340		4,502		44,838
Marketable equity securities	226		121		0			347		0		347
	52,509		135		(176		)	52,468		7,283		45,185
Level 2:
Time deposits(1)	108		0		0			108		106		2
Mutual funds(2)	232		13		0			245		0		245
U.S. government agencies	2,540		0		(6		)	2,534		799		1,735
Foreign government bonds	2,422		10		(11		)	2,421		0		2,421
Municipal securities	5,856		14		(10		)	5,860		8		5,852
Corporate debt securities	12,608		48		(22		)	12,634		130		12,504
Agency mortgage-backed securities	7,695		14		(133		)	7,576		0		7,576
Asset-backed securities	3,479		5		(2		)	3,482		0		3,482
	34,940		104		(184		)	34,860		1,043		33,817
Total	$	94,834	$	239	$	(360	)	$	94,713	$	15,711	$	79,002

⁽¹⁾  The majority of our time deposits are foreign deposits.

⁽²⁾  The fair value option was elected for mutual funds with gains (losses) recognized in other income (expense), net.

We determine realized gains or losses on the sale of marketable securities on a specific identification method. We recognized gross realized gains of $91 million and $24 million for the three months ended June 30, 2016 and 2017, respectively, and $159 million and $172 million for the six months ended June 30, 2016 and 2017, respectively. We recognized gross realized losses of $100 million and $39 million for the three months ended June 30, 2016 and 2017, respectively, and $335 million and $209 million for the six months ended June 30, 2016 and 2017, respectively. We reflect these gains and losses as a component of other income (expense), net, in the accompanying Consolidated Statements of Income.

The following table summarizes the estimated fair value of our investments in marketable debt securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities (in millions, unaudited):

	As of June 30, 2017
Due in 1 year	$	29,827
Due in 1 year through 5 years	38,652
Due in 5 years through 10 years	1,281
Due after 10 years	8,650
Total	$	78,410

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Impairment Considerations for Marketable Investments

The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2016 and June 30, 2017, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

	As of December 31, 2016
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	26,411	$	(215	)	$	0	$	0		$	26,411	$	(215	)
U.S. government agencies	1,014		(11		)	0		0			1,014		(11		)
Foreign government bonds	956		(7		)	0		0			956		(7		)
Municipal securities	3,461		(63		)	46		(2		)	3,507		(65		)
Corporate debt securities	6,184		(111		)	166		(5		)	6,350		(116		)
Agency mortgage-backed securities	10,184		(206		)	259		(10		)	10,443		(216		)
Asset-backed securities	391		(1		)	0		0			391		(1		)
Total	$	48,601	$	(614	)	$	471	$	(17	)	$	49,072	$	(631	)

	As of June 30, 2017
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(unaudited)
U.S. government notes	$	37,169	$	(174	)	$	508	$	(2	)	$	37,677	$	(176	)
U.S. government agencies	1,608		(6		)	0		0			1,608		(6		)
Foreign government bonds	1,448		(11		)	0		0			1,448		(11		)
Municipal securities	2,088		(8		)	54		(2		)	2,142		(10		)
Corporate debt securities	5,157		(21		)	77		(1		)	5,234		(22		)
Agency mortgage-backed securities	6,623		(123		)	267		(10		)	6,890		(133		)
Asset-backed securities	1,232		(2		)	0		0			1,232		(2		)
Total	$	55,325	$	(345	)	$	906	$	(15	)	$	56,231	$	(360	)

During the three months ended June 30, 2016 and the three and six months ended June 30, 2017, we did not recognize any other-than-temporary impairment losses. During the six months ended June 30, 2016, we recognized $87 million of other-than-temporary impairment losses related to our marketable equity securities. Those losses are included in loss on marketable securities, net, as a component of other income (expense), net, in the accompanying Consolidated Statements of Income. See Note 6 for further details on other income (expense), net.

Derivative Financial Instruments

We recognize derivative instruments as either assets or liabilities in the accompanying Consolidated Balance Sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the derivatives in the accompanying Consolidated Statements of Income as other income (expense), net, revenues, or accumulated other comprehensive income (AOCI) in the accompanying Consolidated Balance Sheets, as discussed below.

We enter into foreign currency contracts with financial institutions to reduce the risk that our cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. We use certain interest rate derivative contracts to hedge interest rate exposures on our fixed income securities and debt issuances. Our program is not used for trading or speculative purposes.

We enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. To further reduce credit risk, we enter into collateral security arrangements under which the counterparty is required to provide collateral when the net fair value of certain financial instruments fluctuates from contractually established thresholds. We can take possession of the collateral in the event of counterparty default. As of December 31, 2016 and June 30, 2017, we received cash collateral related to the derivative instruments under our collateral security arrangements of $362 million and $54 million, respectively.

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Cash Flow Hedges

We use foreign currency forwards and option contracts, including collars (an option strategy comprised of a combination of purchased and written options), designated as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the U.S. dollar and at times we use interest rate swaps to effectively lock interest rates on anticipated debt issuances. These transactions are designated as cash flow hedges. The notional principal of these contracts was approximately $10.7 billion and $11.0 billion as of December 31, 2016 and June 30, 2017, respectively. These contracts have maturities of 24 months or less.

We reflect gain or loss on the effective portion of a cash flow hedge as a component of AOCI and subsequently reclassify cumulative gains and losses to revenues or interest expense when the hedged transactions are recorded. If the hedged transactions become probable of not occurring, the corresponding amounts in AOCI are immediately reclassified to other income (expense), net.For foreign currency collars, we include the change in time value in our assessment of hedge effectiveness.For forwards and all other option contracts, we exclude the change in the forward points and time value from our assessment of hedge effectiveness. We recognize changes of the excluded components in other income (expense), net.

As of June 30, 2017, the effective portion of our cash flow hedges before tax effect was a net accumulated loss of $306 million, of which a net loss of $339 million is expected to be reclassified from AOCI into earnings within the next 12 months.

Fair Value Hedges

We use forward contracts designated as fair value hedges to hedge foreign currency risks for our investments denominated in currencies other than the U.S. dollar. We exclude changes in forward points for the forward contracts from the assessment of hedge effectiveness. The notional principal of these contracts was $2.4 billion as of December 31, 2016 and June 30, 2017.

Gains and losses on these forward contracts are recognized in other income (expense), net, along with the offsetting gains and losses of the related hedged items.

Other Derivatives

Other derivatives not designated as hedging instruments consist of foreign currency forward contracts that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the local currency of a subsidiary. We recognize gains and losses on these contracts, as well as the related costs in other income (expense), net, along with the foreign currency gains and losses on monetary assets and liabilities. The notional principal of the outstanding foreign exchange contracts was $7.9 billion and $7.5 billion as of December 31, 2016 and June 30, 2017, respectively.

The fair values of our outstanding derivative instruments were as follows (in millions):

		As of December 31, 2016
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	539	$	57	$	596
Total		$	539	$	57	$	596
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	4	$	9	$	13
Total		$	4	$	9	$	13

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		As of June 30, 2017
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
		(unaudited)
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	35	$	23	$	58
Total		$	35	$	23	$	58
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	365	$	36	$	401
Total		$	365	$	36	$	401

The effect of derivative instruments in cash flow hedging relationships on income and other comprehensive income (OCI) is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)
	Three Months Ended					Six Months Ended
	June 30,					June 30,
Derivatives in Cash Flow Hedging Relationship	2016		2017			2016		2017
Foreign exchange contracts	$	155	$	(374	)	$	188	$	(687	)

	Gains (Losses) Reclassified from AOCI into Income (Effective Portion)
		Three Months Ended				Six Months Ended
		June 30,				June 30,
Derivatives in Cash Flow Hedging Relationship	Location	2016		2017		2016		2017
Foreign exchange contracts	Revenues	$	78	$	3	$	247	$	220
Interest rate contracts	Other income (expense), net	2		2		3		3
Total		$	80	$	5	$	250	$	223

	Gains (Losses) Recognized in Income on Derivatives (Amount Excluded from  Effectiveness Testing and Ineffective Portion) (1)
		Three Months Ended					Six Months Ended
		June 30,					June 30,
Derivatives in Cash Flow Hedging Relationship	Location	2016			2017		2016			2017
Foreign exchange contracts	Other income (expense), net	$	(120	)	$	20	$	(259	)	$	46

⁽¹⁾  Gains (losses) related to the ineffective portion of the hedges were not material in all periods presented.

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The effect of derivative instruments in fair value hedging relationships on income is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in Income on Derivatives(2)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives in Fair Value Hedging Relationship	Location	2016			2017			2016			2017
Foreign Exchange Hedges:
Foreign exchange contracts	Other income (expense), net	$	53		$	(80	)	$	25		$	(127	)
Hedged item	Other income (expense), net	(53		)	85			(25		)	136
Total		$	0		$	5		$	0		$	9

⁽²⁾  Amounts excluded from effectiveness testing and the ineffective portion of the fair value hedging relationships were not material in all periods presented.

The effect of derivative instruments not designated as hedging instruments on income is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in Income on Derivatives
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives Not Designated As Hedging Instruments	Location	2016			2017			2016			2017
Foreign exchange contracts	Other income (expense), net	$	(6	)	$	(22	)	$	(80	)	$	(224	)

Offsetting of Derivatives

We present our forwards and purchased options at gross fair values in the Consolidated Balance Sheets. For foreign currency collars, we present at net fair values where both purchased and written options are with the same counterparty. Our master netting and other similar arrangements allow net settlements under certain conditions. As of December 31, 2016 and June 30, 2017, information related to these offsetting arrangements were as follows (in millions):

Offsetting of Assets

	As of December 31, 2016
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	596	$	0		$	596	$	(11	)	(1)	$	(337	)	$	(73	)	$	175
	As of June 30, 2017
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
	(unaudited)
Derivatives	$	66	$	(8	)	$	58	$	(26	)	(1)	$	(18	)	$	(1	)	$	13

⁽¹⁾  The balances as of December 31, 2016 and June 30, 2017 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

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Offsetting of Liabilities

	As of December 31, 2016
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged		Non-Cash Collateral Pledged		Net Liabilities
Derivatives	$	13	$	0		$	13	$	(11	)	(2)	$	0	$	0	$	2
	As of June 30, 2017
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged		Non-Cash Collateral Pledged		Net Liabilities
	(unaudited)
Derivatives	$	409	$	(8	)	$	401	$	(26	)	(2)	$	0	$	0	$	375

⁽²⁾  The balances as of December 31, 2016 and June 30, 2017 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

Note 4. Non-Marketable Investments

Our non-marketable investments include non-marketable equity investments and non-marketable debt securities.

Non-Marketable Equity Investments

Our non-marketable equity investments are investments we have made in privately-held companies accounted for under the equity or cost method and are not required to be consolidated under the variable interest or voting models. As of December 31, 2016 and June 30, 2017, investments accounted for under the equity method had a carrying value of approximately $1.7 billion and $1.8 billion, respectively. Our share of gains and losses in equity method investments including impairment was a net loss of approximately $43 million and $13 million for the three months ended June 30, 2016 and 2017, respectively, and a net loss of $148 million and $62 million for the six months ended June 30, 2016 and 2017, respectively. As of December 31, 2016 and June 30, 2017, investments accounted for under the cost method had a carrying value of $3.0 billion and $3.5 billion, respectively, and a fair value of approximately $8.1 billion and $8.6 billion, respectively. The fair value of the cost method investments are primarily determined from data leveraging private-market transactions and are classified within Level 3 in the fair value hierarchy. We reflect our share of equity method investee earnings and losses and impairments of non-marketable equity investments as a component of other income (expense), net, in the accompanying Consolidated Statements of Income.

Certain renewable energy investments included in our non-marketable equity investments accounted for under the equity method are variable interest entities (VIE). These entities' activities involve power generation using renewable sources. We have determined that the governance structures of these entities do not allow us to direct the activities that would significantly impact the VIE's economic performance such as setting operating budgets. Therefore, we do not consolidate these VIEs in our financial statements. The carrying value and maximum exposure of these VIEs were $1.2 billion as of December 31, 2016 and June 30, 2017. The maximum exposure is based on current investments to date.  We have determined the single source of our exposure to these VIEs is our capital investment in these entities. We periodically reassess whether we are the primary beneficiary of a VIE. The reassessment process considers whether we have acquired the power to direct the most significant activities of the VIE through changes in governing documents or other circumstances. We also reconsider whether entities previously determined not to be VIEs have become VIEs, and vice versa, based on changes in facts and circumstances including changes in contractual arrangements and capital structure.

Non-Marketable Debt Securities

Our non-marketable debt securities are primarily preferred stock that are redeemable at our option and convertible notes issued by private companies. The cost of these securities were $1.1 billion as of December 31, 2016 and June 30, 2017. These debt securities do not have readily determinable market values and are categorized accordingly as Level 3 in the fair value hierarchy. To estimate the fair value of these securities, we use a combination of valuation methodologies, including market and income approaches based on prior transaction prices; estimated timing, probability, and amount of cash flows; and illiquidity considerations. Financial information of private companies may

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not be available and consequently we will estimate the value based on the best available information at the measurement date. No significant impairments were recognized for the three and six months ended June 30, 2016 and 2017.

The following table presents a reconciliation for our non-marketable debt securities measured and recorded at fair value on a recurring basis, using significant unobservable inputs (Level 3) (in millions, unaudited):

	Six Months Ended
	June 30,
	2016			2017
Beginning balance	$	1,024		$	1,165
Total net gains (losses)
Included in earnings	0			(5		)
Included in other comprehensive income	90			126
Purchases	76			70
Sales	(6		)	(1		)
Settlements	(14		)	(3		)
Ending balance	$	1,170		$	1,352

Note 5. Debt

Short-Term Debt

We have a debt financing program of up to $5.0 billion through the issuance of commercial paper. Net proceeds from this program are used for general corporate purposes. We had no commercial paper outstanding as of December 31, 2016 and June 30, 2017.

Long-Term Debt

Google issued $3.0 billion of senior unsecured notes in three tranches (collectively, 2011 Notes) in May 2011, due in 2014, 2016, and 2021, as well as $1.0 billion of senior unsecured notes (2014 Notes) in February 2014 due 2024.

In April 2016, we completed an exchange offer with eligible holders of Google’s 2011 Notes due 2021 and 2014 Notes due 2024 (collectively, the Google Notes). An aggregate principal amount of approximately $1.7 billion of the Google Notes was exchanged for approximately $1.7 billion of Alphabet notes with identical interest rate and maturity. Because the exchange was between a parent and the subsidiary company and for substantially identical notes, the change was treated as a debt modification for accounting purposes with no gain or loss recognized.

In August 2016, Alphabet issued $2.0 billion of senior unsecured notes (2016 Notes) due 2026. The net proceeds from the issuance of the 2016 Notes were used for general corporate purposes, including the repayment of outstanding commercial paper. The Alphabet notes due in 2021, 2024, and 2026 rank equally with each other and are structurally subordinated to the outstanding Google Notes.

The total outstanding long-term debt is summarized below (in millions):

	As of December 31, 2016			As of June 30, 2017
				(unaudited)
Long-term debt
3.625% Notes due on May 19, 2021	$	1,000		$	1,000
3.375% Notes due on February 25, 2024	1,000			1,000
1.998% Notes due on August 15, 2026	2,000			2,000
Unamortized discount for the Notes above	(65		)	(61		)
Subtotal(1)	$	3,935		$	3,939
Capital lease obligation	0			16
Total long-term debt	$	3,935		$	3,955

⁽¹⁾  Includes the outstanding (and unexchanged) Google Notes issued in 2011 and 2014 and the Alphabet notes exchanged in 2016.

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The effective interest yields based on proceeds received from the outstanding notes due in 2021, 2024, and 2026 were 3.734%, 3.377%, and 2.231%, respectively, with interest payable semi-annually. We may redeem these notes at any time in whole or in part at specified redemption prices. The total estimated fair value of all outstanding notes was approximately $3.9 billion as of December 31, 2016 and $4.0 billion as of June 30, 2017. The fair value was determined based on observable market prices of identical instruments in less active markets and is categorized accordingly as Level 2 in the fair value hierarchy.

The effective rate of the capital lease obligation approximates the market rate. The estimated fair value of the capital lease obligation approximated its carrying value as of June 30, 2017.

Credit Facility

We have a $4.0 billion revolving credit facility which expires in February 2021. The interest rate for the credit facility is determined based on a formula using certain market rates. No amounts were outstanding under the credit facility as of December 31, 2016 and June 30, 2017.

Note 6. Supplemental Financial Statement Information

Property and Equipment, Net

Property and equipment, net, consisted of the following (in millions):

	As of December 31, 2016			As of June 30, 2017
				(unaudited)
Land and buildings	$	19,804		$	21,508
Information technology assets	16,084			18,529
Construction in progress	8,166			9,221
Leasehold improvements	3,415			4,035
Furniture and fixtures	58			48
Property and equipment, gross	47,527			53,341
Less: accumulated depreciation and amortization	(13,293		)	(15,665		)
Property and equipment, net	$	34,234		$	37,676

As of June 30, 2017, assets under capital lease with a cost basis of $350 million were included in property and equipment.

Note Receivable

In connection with the sale of our Motorola Mobile business to Lenovo Group Limited (Lenovo) on October 29, 2014, we received an interest-free, three-year prepayable promissory note (Note Receivable) due October 2017. The Note Receivable was included on our Consolidated Balance Sheets in prepaid revenue share, expenses, and other assets. Based on the general market conditions and the credit quality of Lenovo at the time of the sale, we discounted the Note Receivable at an effective interest rate of 4.5%. The Note Receivable was fully repaid as of June 30, 2017. The outstanding balances are shown in the table below (in millions):

	As of December 31, 2016			As of June 30, 2017
				(unaudited)
Principal of the Note Receivable	$	1,448		$	0
Less: unamortized discount for the Note Receivable	(51		)	0
Total	$	1,397		$	0

As of December 31, 2016, we did not recognize a valuation allowance on the Note Receivable.

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Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in millions):

	As of December 31, 2016		As of June 30, 2017
			(unaudited)
European Commission fine(1)	$	0	$	2,755
Accrued customer liabilities	1,256		1,131
Other accrued expenses and current liabilities	4,888		4,674
Accrued expenses and other current liabilities	$	6,144	$	8,560

⁽¹⁾  Includes the effects of foreign exchange.

Accumulated Other Comprehensive Income (Loss)

The components of AOCI, net of tax, were as follows (in millions, unaudited):

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains (Losses) on Cash Flow Hedges			Total
Balance as of December 31, 2015	$	(2,047	)	$	(86	)	$	259		$	(1,874	)
Other comprehensive income (loss) before reclassifications	37			556			116			709
Amounts reclassified from AOCI	0			183			(169		)	14
Other comprehensive income (loss)	37			739			(53		)	723
Balance as of June 30, 2016	$	(2,010	)	$	653		$	206		$	(1,151	)

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains (Losses) on Cash Flow Hedges			Total
Balance as of December 31, 2016	$	(2,646	)	$	(179	)	$	423		$	(2,402	)
Other comprehensive income (loss) before reclassifications	1,016			225			(459		)	782
Amounts reclassified from AOCI	0			51			(159		)	(108		)
Other comprehensive income (loss)	1,016			276			(618		)	674
Balance as of June 30, 2017	$	(1,630	)	$	97		$	(195	)	$	(1,728	)

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The effects on net income of amounts reclassified from AOCI were as follows (in millions, unaudited):

		Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income
		Three Months Ended						Six Months Ended
		June 30,						June 30,
AOCI Components	Location	2016			2017			2016			2017
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	(14	)	$	(26	)	$	(183	)	$	(51	)
	Provision for income taxes	0			0			0			0
	Net of tax	$	(14	)	$	(26	)	$	(183	)	$	(51	)
Unrealized gains (losses) on cash flow hedges
Foreign exchange contracts	Revenue	$	78		$	3		$	247		$	220
Interest rate contracts	Other income (expense), net	2			2			3			3
	Benefit (provision) for income taxes	(28		)	1			(81		)	(64		)
	Net of tax	$	52		$	6		$	169		$	159
Total amount reclassified, net of tax		$	38		$	(20	)	$	(14	)	$	108

Other Income (Expense), Net

The components of other income (expense), net, were as follows (in millions, unaudited):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Interest income	$	307		$	294		$	577		$	606
Interest expense	(32		)	(21		)	(62		)	(46		)
Foreign currency exchange losses, net	(128		)	(46		)	(314		)	(48		)
Loss on marketable securities, net	(9		)	(15		)	(176		)	(37		)
Loss on non-marketable investments, net	(5		)	(1		)	(118		)	(47		)
Other	18			34			31			68
Other income (expense), net	$	151		$	245		$	(62	)	$	496

Interest expense in the preceding table is net of interest capitalized of $0 million and $12 million for the three months ended June 30, 2016 and 2017, respectively, and $0 million and $19 million for the six months ended June 30, 2016 and 2017, respectively.

Note 7. Acquisitions

During the six months ended June 30, 2017, we completed various acquisitions and purchases of intangible assets for total consideration of approximately $163 million. In aggregate, $10 million was cash acquired, $59 million was attributed to intangible assets, $106 million was attributed to goodwill, and $12 million was attributed to net liabilities assumed. These acquisitions generally enhance the breadth and depth of our offerings and expand our expertise in engineering and other functional areas. The amount of goodwill expected to be deductible for tax purposes is approximately $21 million.

Pro forma results of operations for these acquisitions have not been presented because they are not material to the consolidated results of operations, either individually or in aggregate.

For all intangible assets acquired and purchased during the six months ended June 30, 2017, patents and developed technology have a weighted-average useful life of 4.0 years, customer relationships have a weighted-average useful life of 4.0 years, and trade names and other have a weighted-average useful life of 8.8 years.

Note 8. Calico

In September 2013, we announced the formation of Calico, a life science company with a mission to harness advanced technologies to increase our understanding of the biology that controls lifespan. As of June 30, 2017, we have contributed $240 million to Calico in exchange for Calico convertible preferred units and are committed to fund an additional $490 million on an as-needed basis.

Calico is a VIE and its results of operations and statement of financial position are included in our consolidated financial statements as we have the power to direct the activities that most significantly impact its economic performance.

In September 2014, AbbVie Inc. (AbbVie) and Calico announced a research and development collaboration agreement intended to help both companies discover, develop, and bring to market new therapies for patients with age-related diseases, including neurodegeneration and cancer. As of June 30, 2017, AbbVie has contributed $750 million to fund the collaboration pursuant to the agreement, which reflects its total commitment. As of June 30, 2017, Calico has contributed $250 million and committed up to an additional $500 million.

Calico has used its scientific expertise to establish a world-class research and development facility, with a focus on drug discovery and early drug development; and AbbVie provides scientific and clinical development support and its commercial expertise to bring new discoveries to market. Both companies share costs and profits equally. AbbVie's contribution has been recorded as a liability on Calico's financial statements, which is reduced and reflected as a reduction to research and development expense as eligible research and development costs are incurred by Calico over the next few years.

Note 9. Verily

Verily is a life science company with a mission to make the world's health data useful so that people enjoy healthier lives. Verily is a VIE and its results of operations and statement of financial position are included in our consolidated financial statements as we have the power to direct the activities that most significantly impact its economic performance.

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In January 2017, Temasek, a Singapore-based investment company, signed a binding commitment to purchase a noncontrolling interest in Verily for an aggregate of $800 million in cash. In the first quarter of 2017, the first tranche of the investment closed and we received $480 million. The transaction is accounted for as an equity transaction and no gain or loss was recognized. Of the $480 million received, $15 million was recorded as noncontrolling interest, based on Temasek’s share of the net assets of Verily, and $465 million was recorded as additional paid-in capital. Noncontrolling interest and net loss attributable to noncontrolling interest were not separately presented on our consolidated financial statements as of and for the quarter ended June 30, 2017 as the amounts were not material.

The second and final tranche of the investment closed in July 2017 and we received the remaining $320 million upon close.

Note 10. Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill allocated to our disclosed segments for the six months ended June 30, 2017 were as follows (in millions, unaudited):

	Google		Other Bets		Total Consolidated
Balance as of December 31, 2016	$	16,027	$	441	$	16,468
Acquisitions	98		8		106
Foreign currency translation and other adjustments	30		0		30
Balance as of June 30, 2017	$	16,155	$	449	$	16,604

Other Intangible Assets

Information regarding purchased intangible assets were as follows (in millions):

	As of December 31, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents and developed technology	$	5,542	$	2,710	$	2,832
Customer relationships	352		197		155
Trade names and other	463		143		320
Total	$	6,357	$	3,050	$	3,307
	As of June 30, 2017
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(unaudited)
Patents and developed technology	$	5,330	$	2,818	$	2,512
Customer relationships	369		241		128
Trade names and other	457		164		293
Total	$	6,156	$	3,223	$	2,933

Amortization expense relating to purchased intangible assets was $210 million and $200 million for the three months ended June 30, 2016 and 2017, respectively, and $426 million and $406 million for the six months ended June 30, 2016 and 2017, respectively.

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As of June 30, 2017, expected amortization expense relating to purchased intangible assets for each of the next five years and thereafter are as follows (in millions, unaudited):

Remainder of 2017	$	384
2018	715
2019	604
2020	488
2021	456
Thereafter	286
	$	2,933

Note 11. Contingencies

Legal Matters

Antitrust Investigations

On November 30, 2010, the European Commission's (EC) Directorate General for Competition opened an investigation into various antitrust-related complaints against us.

On April 15, 2015, the EC issued a Statement of Objections (SO) regarding the display and ranking of shopping search results and ads, to which we responded on August 27, 2015. On July 14, 2016, the EC issued a Supplementary SO regarding shopping search results and ads. On June 27, 2017, the EC announced its decision that certain actions taken by Google regarding its display and ranking of shopping search results and ads infringed European competition law. The EC decision imposes a €2.42 billion (approximately $2.74 billion) fine and directs the termination of the conduct at issue. We are in the process of reviewing the EC's decision in detail as we consider an appeal. We are also evaluating the impact of potential remedies we may implement to address the EC's findings. We accrued the fine in the second quarter of 2017, resulting in a charge of approximately $2.74 billion. The fine is included in accrued expenses and other current liabilities on our Consolidated Balance Sheet.

On April 20, 2016, the EC issued an SO regarding certain Android distribution practices. On July 14, 2016, the EC issued an SO regarding the syndication of AdSense for Search. We responded to the SOs and continue to respond to the EC's informational requests. There is significant uncertainty as to the outcomes of these investigations; however, adverse decisions could result in fines and directives to alter or terminate certain conduct. Given the nature of these cases, we are unable to estimate the reasonably possible loss or ranges of loss, if any. We remain committed to working with the EC to resolve these matters.

The Comision Nacional de Defensa de la Competencia in Argentina, the Competition Commission of India (CCI), Brazil's Council for Economic Defense (CADE), and the Korean Fair Trade Commission have also opened investigations into certain of our business practices. In November 2016, we responded to the CCI Director General's report with interim findings of competition law infringements regarding search and ads.

Patent and Intellectual Property Claims

We have had patent, copyright, and trademark infringement lawsuits filed against us claiming that certain of our products, services, and technologies infringe the intellectual property rights of others. Adverse results in these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing us from offering certain features, functionalities, products, or services, and may also cause us to change our business practices, and require development of non-infringing products or technologies, which could result in a loss of revenues for us and otherwise harm our business. In addition, the U.S. International Trade Commission (ITC) has increasingly become an important forum to litigate intellectual property disputes because an ultimate loss for a company or its suppliers in an ITC action could result in a prohibition on importing infringing products into the U.S. Because the U.S. is an important market, a prohibition on importation could have an adverse effect on us, including preventing us from importing many important products into the U.S. or necessitating workarounds that may limit certain features of our products.

Furthermore, many of our agreements with our customers and partners require us to indemnify them for certain intellectual property infringement claims against them, which would increase our costs as a result of defending such claims, and may require that we pay significant damages if there were an adverse ruling in any such claims. Our customers and partners may discontinue the use of our products, services, and technologies, as a result of injunctions or otherwise, which could result in loss of revenues and adversely impact our business.

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Oracle America, Inc. (Oracle) brought a copyright lawsuit against Google in the Northern District of California, alleging that Google's Android infringes Oracle's copyrights related to certain Java application programming interfaces. After trial, final judgment was entered by the district court in favor of Google on June 8, 2016, and the court decided post-trial motions in favor of Google. Oracle has appealed. We believe this lawsuit is without merit and are defending ourselves vigorously. Given the nature of this case, we are unable to estimate the reasonably possible loss or range of loss, if any, arising from this matter.

Other

We are also regularly subject to claims, suits, regulatory and government investigations, and other proceedings involving competition (such as the pending EC investigations described above), intellectual property, privacy, tax, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, personal injury, consumer protection, and other matters. Such claims, suits, regulatory and government investigations, and other proceedings could result in fines, civil or criminal penalties, or other adverse consequences.

Certain of our outstanding legal matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. We evaluate, on a monthly basis, developments in our legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters.

With respect to our outstanding legal matters, based on our current knowledge, we believe that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties.

We expense legal fees in the period in which they are incurred.

Indirect Taxes and Other Non-Income Taxes

We are under audit by various domestic and foreign tax authorities with regards to indirect tax and other non-income tax matters. The subject matter of indirect tax and other non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied to the sale of our products and services in these jurisdictions and the tax treatment of certain employee benefits. We accrue indirect taxes and other non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. We believe these matters are without merit and we are defending ourselves vigorously. Due to the inherent complexity and uncertainty of these matters and judicial process in certain jurisdictions, the final outcome may be materially different from our expectations.

For information regarding income tax contingencies, see Note 14.

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Note 12. Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share of Class A and Class B common stock and Class C capital stock (in millions, except share amounts which are reflected in thousands, and per share amounts, unaudited):

	Three Months Ended June 30,
	2016								2017
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	2,086		$	350		$	2,441	$	1,514		$	240		$	1,770
Denominator
Number of shares used in per share computation	293,564			49,228			343,427		297,288			47,133			347,538
Basic net income per share	$	7.11		$	7.11		$	7.11	$	5.09		$	5.09		$	5.09
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	2,086		$	350		$	2,441	$	1,514		$	240		$	1,770
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	350			0			0		240			0			0
Reallocation of undistributed earnings	(22		)	(6		)	22		(22		)	(4		)	22
Allocation of undistributed earnings	$	2,414		$	344		$	2,463	$	1,732		$	236		$	1,792
Denominator
Number of shares used in basic computation	293,564			49,228			343,427		297,288			47,133			347,538
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	49,228			0			0		47,133			0			0
Restricted stock units and other contingently issuable shares	2,201			0			8,427		1,258			0			10,286
Number of shares used in per share computation	344,993			49,228			351,854		345,679			47,133			357,824
Diluted net income per share	$	7.00		$	7.00		$	7.00	$	5.01		$	5.01		$	5.01

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	Six Months Ended June 30,
	2016								2017
	(unaudited)
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	3,880		$	656		$	4,548	$	3,845		$	611		$	4,494
Denominator
Number of shares used in per share computation	293,415			49,584			343,870		297,210			47,234			347,313
Basic net income per share	$	13.23		$	13.23		$	13.23	$	12.94		$	12.94		$	12.94
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	3,880		$	656		$	4,548	$	3,845		$	611		$	4,494
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	656			0			0		611			0			0
Reallocation of undistributed earnings	(42		)	(11		)	42		(52		)	(9		)	52
Allocation of undistributed earnings	$	4,494		$	645		$	4,590	$	4,404		$	602		$	4,546
Denominator
Number of shares used in basic computation	293,415			49,584			343,870		297,210			47,234			347,313
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	49,584			0			0		47,234			0			0
Restricted stock units and other contingently issuable shares	2,355			0			8,856		1,342			0			9,671
Number of shares used in per share computation	345,354			49,584			352,726		345,786			47,234			356,984
Diluted net income per share	$	13.01		$	13.01		$	13.01	$	12.74		$	12.74		$	12.74

For the periods presented above, the net income per share amounts are the same for Class A and Class B common stock and Class C capital stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with the Amended and Restated Certificate of Incorporation of Alphabet Inc.

Note 13. Stockholders’ Equity

Stock-Based Compensation

For the three months ended June 30, 2016 and 2017, total stock-based compensation expense was $1,510 million and $2,062 million, respectively, including amounts associated with awards that we expect to settle in Alphabet stock of $1,503 million and $2,003 million, respectively. For the six months ended June 30, 2016 and 2017, total stock-based compensation expense was $3,010 million and $4,127 million, respectively, including amounts associated with awards that we expect to settle in Alphabet stock of $2,997 million and $4,012 million, respectively.

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Stock-Based Award Activities

The following table summarizes the activities for our unvested restricted stock units (RSUs) for the six months ended June 30, 2017 (unaudited):

	Unvested Restricted Stock Units
	Number of Shares		Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2016	25,348,955		$	624.92
Granted	5,883,829		$	804.76
Vested	(6,426,955	)	$	595.93
Forfeited/canceled	(684,988	)	$	642.17
Unvested as of June 30, 2017	24,120,841		$	676.35

As of June 30, 2017, there was $14.8 billion of unrecognized compensation cost related to unvested employee RSUs. This amount is expected to be recognized over a weighted-average period of 2.6 years.

Share Repurchases

In October 2016, the board of directors of Alphabet authorized the company to repurchase up to $7,019,340,976.83 of its Class C capital stock. The repurchases are being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans. The repurchase program does not have an expiration date. In the six months ended June 30, 2017, we repurchased and subsequently retired 3.1 million shares of Alphabet Class C capital stock for an aggregate amount of $2.7 billion.

Note 14. Income Taxes

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. Our total gross unrecognized tax benefits were $5.4 billion and $5.0 billion as of December 31, 2016 and June 30, 2017, respectively. Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $4.3 billion and $3.8 billion as of December 31, 2016 and June 30, 2017, respectively.

Our effective tax rate is lower than the U.S. statutory rate primarily because of more earnings realized in countries that have lower statutory tax rates. Our effective tax rate in the future will depend on the portion of our profits earned within and outside the United States.

In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service (IRS) and other domestic and foreign tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. We continue to monitor the progress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner not consistent with management's expectations, we could be required to adjust the provision for income taxes in the period such resolution occurs.

We have received tax assessments in multiple foreign jurisdictions asserting transfer pricing adjustments or permanent establishment. We continue to defend against any and all such claims as presented. While we believe it is more likely than not that our tax position will be sustained, it is reasonably possible that we will have future obligations related to these matters.

For information regarding indirect taxes and other non-income taxes, see Note 11.

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Note 15. Information about Segments and Geographic Areas

We operate our business in multiple operating segments. Google is our only reportable segment. None of our other segments meet the quantitative thresholds to qualify as reportable segments; therefore, the other operating segments are combined and disclosed below as Other Bets.

Our reported segments are described below:

• Google – Google includes our main internet products such as Search, Ads, Commerce, Maps, YouTube, Google Cloud, Android, Chrome, and Google Play as well as our hardware initiatives. Our technical infrastructure and some newer efforts like virtual reality are also included in Google. Google generates revenues primarily from advertising; sales of apps, in-app purchases, and digital content; services fees for cloud offerings; and sales of hardware products.

• Other Bets – Other Bets is a combination of multiple operating segments that are not individually material. Other Bets includes businesses such as Access, Calico, CapitalG, GV, Nest, Verily, Waymo, and X. Revenues from the Other Bets are derived primarily through the sales of internet and TV services through Google Fiber, sales of Nest products and services, and licensing and R&D services through Verily.

Revenues, cost of revenues, and operating expenses are generally directly attributed to our segments. Inter-segment revenues are not presented separately, as these amounts are immaterial. Our Chief Operating Decision Maker does not evaluate operating segments using asset information. Prior period segment information has been recast to conform to the current period segment presentation.

Information about segments during the periods presented were as follows (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016		2017
Revenues:
Google	$	21,315	$	25,762	$	41,407	$	50,268
Other Bets	185		248		350		492
Total revenues	$	21,500	$	26,010	$	41,757	$	50,760

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Operating income (loss):
Google	$	6,990		$	7,803		$	13,235		$	15,401
Other Bets	(855		)	(772		)	(1,629		)	(1,627		)
Reconciling items(1)	(167		)	(2,899		)	(296		)	(3,074		)
Total income from operations	$	5,968		$	4,132		$	11,310		$	10,700

⁽¹⁾  Reconciling items are primarily comprised of the European Commission fine for the three and six months ended June 30, 2017, as well as corporate administrative costs and other miscellaneous items that are not allocated to individual segments.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Capital expenditures:
Google	$	2,056		$	2,835		$	4,095		$	5,241
Other Bets	280			151			557			321
Reconciling items(2)	(200		)	(155		)	(72		)	(223		)
Total capital expenditures as presented on the Consolidated Statements of Cash Flows	$	2,136		$	2,831		$	4,580		$	5,339

⁽²⁾  Reconciling items are related to timing differences of payments as segment capital expenditures are on accrual basis while total capital expenditures shown on the Consolidated Statements of Cash Flow are on cash basis and other miscellaneous differences.

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Stock-based compensation (SBC) and depreciation, amortization, and impairment are included in segment operating income (loss) as shown below (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016		2017
Stock-based compensation:
Google	$	1,321	$	1,854	$	2,644	$	3,708
Other Bets	149		111		287		225
Reconciling items(3)	33		38		66		79
Total stock-based compensation(4)	$	1,503	$	2,003	$	2,997	$	4,012
Depreciation, amortization, and impairment:
Google	$	1,409	$	1,543	$	2,726	$	2,939
Other Bets	81		82		135		189
Total depreciation, amortization, and impairment as presented on the Consolidated Statements of Cash Flows	$	1,490	$	1,625	$	2,861	$	3,128

⁽³⁾  Reconciling items represent corporate administrative costs that are not allocated to individual segments.

⁽⁴⁾  For purposes of segment reporting, SBC represents awards that we expect to settle in Alphabet stock.

The following table presents our long-lived assets by geographic area (in millions):

	As of December 31, 2016		As of June 30, 2017
			(unaudited)
Long-lived assets:
United States	$	47,383	$	49,908
International	14,706		16,327
Total long-lived assets	$	62,089	$	66,235

For revenues by geography, see Note 2.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Please read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

Executive Overview of Results

Here are our key financial results for the three months ended June 30, 2017 (consolidated unless otherwise noted):

• Revenues of $26.0 billion and revenue growth of 21% year over year, constant currency revenue growth of 23% year over year.

• Google segment revenues of $25.8 billion with revenue growth of 21% year over year and Other Bets revenues of $0.2 billion with revenue growth of 34% year over year.

• Revenues from the United States, EMEA, APAC, and Other Americas were $12.3 billion, $8.5 billion, $3.7 billion, and $1.4 billion, respectively.

• Cost of revenues was $10.4 billion, consisting of traffic acquisition costs of $5.1 billion and other cost of revenues of $5.3 billion. Our traffic acquisition costs as a percentage of advertising revenues was 22%.

• Operating expenses (excluding cost of revenues) were $11.5 billion, including the EC fine of approximately $2.7 billion.

• Income from operations was $4.1 billion.

• Effective tax rate was 19%.

• Net income was $3.5 billion with diluted net income per share of $5.01.

• Operating cash flow was $7.4 billion.

• Capital expenditures were $2.8 billion.

• Headcount increased to 75,606 as of June 30, 2017.

Information about Segments

We operate our business in multiple operating segments. Google is our only reportable segment. None of our other segments meet the quantitative thresholds to qualify as reportable segments; therefore, the other operating segments are combined and disclosed below as Other Bets.

Our reported segments are described below:

• Google – Google includes our main internet products such as Search, Ads, Commerce, Maps, YouTube, Google Cloud, Android, Chrome, and Google Play as well as our hardware initiatives. Our technical infrastructure and some newer efforts like virtual reality are also included in Google. Google generates revenues primarily from advertising; sales of apps, in-app purchases, and digital content; services fees for cloud offerings; and sales of hardware products.

• Other Bets – Other Bets is a combination of multiple operating segments that are not individually material. Other Bets includes businesses such as Access, Calico, CapitalG, GV, Nest, Verily, Waymo, and X. Revenues from the Other Bets are derived primarily through the sales of internet and TV services through Google Fiber, sales of Nest products and services, and licensing and R&D services through Verily.

See Note 15 of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information. Prior period segment information has been recast to conform to the current period segment presentation.

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Revenues

The following table presents our revenues, by segment and revenue source (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016		2017
Google segment
Google properties revenues	$	15,400	$	18,425	$	29,728	$	35,828
Google Network Members' properties revenues	3,743		4,247		7,435		8,255
Google advertising revenues	19,143		22,672		37,163		44,083
Google other revenues	2,172		3,090		4,244		6,185
Google segment revenues	21,315		25,762		41,407		50,268
Other Bets
Other Bets revenues	185		248		350		492
Revenues	$	21,500	$	26,010	$	41,757	$	50,760

Google segment

The following table presents our Google segment revenues (in millions, unaudited), and changes in our aggregate paid clicks and cost-per-click (expressed as a percentage):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Google segment revenues	$	21,315		$	25,762		$	41,407		$	50,268
Google segment revenues as a percentage of total revenues	99.1		%	99.0		%	99.2		%	99.0		%
Aggregate paid clicks change				52		%				48		%
Aggregate cost-per-click change				(23		)%				(21		)%

Use of Monetization Metrics

When assessing our advertising revenue performance, we present information regarding the percentage change in the number of "paid clicks" and "cost-per-click" for our Google properties and Google Network Members' properties. Management views these as important metrics for understanding our business.

Paid clicks for our Google properties represent engagement by users and include clicks on advertisements by end-users related to searches on Google.com, clicks related to advertisements on other owned and operated properties including Gmail, Maps, and Google Play; and viewed YouTube engagement ads like TrueView (counted as an engagement when the user chooses not to skip the ad). Paid clicks for our Google Network Members' properties include clicks by end-users related to advertisements served on Google Network Members' properties participating in AdSense for Search, AdSense for Content, and AdMob. In some cases, such as programmatic and reservation based advertising buying, we primarily charge advertisers by impression; while growing, this represents a small part of our revenue base.

Cost-per-click is defined as click-driven revenues divided by our total number of paid clicks and represents the average amount we charge advertisers for each engagement by users.

We periodically review, refine and update our methodologies for monitoring, gathering, and counting the number of paid clicks and for identifying the revenues generated by click activity.

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In the first quarter of 2017, we refined our methodology for paid clicks and cost-per-click to include additional categories of TrueView engagement ads and exclude non-engagement based trial ad formats. This change resulted in a modest increase in paid clicks and a modest decrease in cost-per-click. For comparison purposes, we have included updated data for historical periods in the table below:

	Three Months Ended
	Mar 31, 2016		Jun 30, 2016		Sep 30, 2016		Dec 31, 2016
Year-over-year change
Aggregate paid clicks	29	%	28	%	32	%	39	%
Paid clicks on Google properties	38	%	36	%	41	%	47	%
Paid clicks on Google Network Members' properties	2	%	0	%	1	%	7	%
Aggregate cost-per-click	(8	)%	(6	)%	(10	)%	(17	)%
Cost-per-click on Google properties	(11	)%	(8	)%	(12	)%	(18	)%
Cost-per-click on Google Network Members' properties	(8	)%	(8	)%	(14	)%	(19	)%
Quarter-over-quarter change
Aggregate paid clicks	(2	)%	7	%	9	%	22	%
Paid clicks on Google properties	(3	)%	9	%	11	%	25	%
Paid clicks on Google Network Members' properties	4	%	(3	)%	1	%	6	%
Aggregate cost-per-click	(1	)%	(1	)%	(5	)%	(10	)%
Cost-per-click on Google properties	1	%	(2	)%	(6	)%	(12	)%
Cost-per-click on Google Network Members' properties	(12	)%	(2	)%	(6	)%	0	%

Our advertising revenue growth and the change in advertising revenue growth, as well as the change in paid clicks and cost-per-click on Google properties and Google Network Members' properties and the correlation between these items, have fluctuated and may continue to fluctuate because of various factors, including:

• growth rates of revenues from Google properties, including YouTube, compared to growth rates of revenues from Google Network Members' properties;

• advertiser competition for keywords;

• changes in foreign currency exchange rates;

• seasonality;

• the fees advertisers are willing to pay based on how they manage their advertising costs;

• changes in advertising quality or formats;

• changes in device mix;

• traffic growth in emerging markets compared to more mature markets and across various advertising verticals and channels;

• a shift in the proportion of non-click based revenues generated on Google properties and Google Network Members' properties, including an increase in programmatic and reservation based advertising buying; and

• general economic conditions.

Our advertising revenue growth rate has fluctuated over time as a result of a number of factors, including increasing competition, query growth rates, challenges in maintaining our growth rate as our revenues increase to higher levels, the evolution of the online advertising market, our investments in new business strategies, changes in our product mix, and shifts in the geographic mix of our revenues. We also expect that our revenue growth rate will continue to be affected by evolving user preferences, the acceptance by users of our products and services as they are delivered on diverse devices, our ability to create a seamless experience for both users and advertisers, and movements in foreign currency exchange rates.

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Google properties

The following table presents our Google properties revenues (in millions, unaudited), and changes in our paid clicks and cost-per-click (expressed as a percentage):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Google properties revenues	$	15,400		$	18,425		$	29,728		$	35,828
Google properties revenues as a percentage of Google segment revenues	72.2		%	71.5		%	71.8		%	71.3		%
Paid clicks change				61		%				57		%
Cost-per-click change				(26		)%				(23		)%

Google properties revenues consist primarily of advertising revenues that are generated on:

• Google search properties which includes revenues from traffic generated by search distribution partners who use Google.com as their default search in browsers, toolbars, etc.;

• Other Google owned and operated properties like Gmail, Google Maps, and Google Play; and

• YouTube, including but not limited to, YouTube TrueView and Google Preferred.

Our Google properties revenues increased$3,025 million from the three months ended June 30, 2016 to the three months ended June 30, 2017 and increased$6,100 million from the six months ended June 30, 2016 to the six months ended June 30, 2017. The growth from the three and six months ended June 30, 2016 to the three and six months ended June 30, 2017 was primarily driven by increases in mobile search resulting from ongoing growth in user adoption and usage, as well as continued growth in advertiser activity. We also experienced growth in YouTube revenues driven primarily by video advertising. The growth was partially offset by the general strengthening of the U.S. dollar compared to certain foreign currencies.

The number of paid clicks through our advertising programs on Google properties increased from the three and six months ended June 30, 2016 to the three and six months ended June 30, 2017 due to growth in YouTube engagement ads, increases in mobile search queries, improvements we have made in ad formats and delivery, and continued global expansion of our products, advertisers and user base. The positive impact on our revenues from an increase in paid clicks was partially offset by a decrease in the cost-per-click paid by our advertisers from the three and six months ended June 30, 2016 to the three and six months ended June 30, 2017. The decrease in cost-per-click was primarily driven by continued growth in YouTube engagement ads where cost-per-click remains lower than on our other advertising platforms. The decrease in cost-per-click was also impacted by changes in device mix, property mix, product mix, geographic mix, ongoing product changes, and the general strengthening of the U.S. dollar compared to certain foreign currencies.

Google Network Members' properties

The following table presents our Google Network Members' properties revenues (in millions, unaudited) and changes in our paid clicks and cost-per-click (expressed as a percentage):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Google Network Members' properties revenues	$	3,743		$	4,247		$	7,435		$	8,255
Google Network Members' properties revenues as a percentage of Google segment revenues	17.6		%	16.5		%	18.0		%	16.4		%
Paid clicks change				9		%				9		%
Cost-per-click change				(11		)%				(14		)%

Google Network Members' properties revenues consist primarily of advertising revenues generated from ads placed on Google Network Member properties through:

• AdMob;

• AdSense (such as AdSense for Search, AdSense for Content, etc.); and

• DoubleClick AdExchange.

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Our Google Network Members' properties revenues increased$504 million from the three months ended June 30, 2016 to the three months ended June 30, 2017 and increased$820 million from the six months ended June 30, 2016 to the six months ended June 30, 2017. The growth from the three and six months ended June 30, 2016 to the three and six months ended June 30, 2017 was primarily driven by strength in both programmatic advertising buying and AdMob, offset by a decline in our traditional AdSense businesses and the general strengthening of the U.S. dollar compared to certain foreign currencies.

The increase in paid clicks from the three and six months ended June 30, 2016 to the three and six months ended June 30, 2017 resulted primarily from the growth in AdMob. Paid clicks for our traditional AdSense for Search business declined from the six months ended June 30, 2016 to the six months ended June 30, 2017; however, we experienced a slight increase in paid clicks from the three months ended June 30, 2016 to the three months ended June 30, 2017. The positive impact on our revenues from an increase in paid clicks was partially offset by a decrease in the cost-per-click paid by our advertisers. The decrease in cost-per-click was impacted by changes in device mix, property mix, product mix, geographic mix, ongoing product changes, and the general strengthening of the U.S. dollar compared to certain foreign currencies.

Google other revenues

The following table presents our Google other revenues (in millions, unaudited):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Google other revenues	$	2,172		$	3,090		$	4,244		$	6,185
Google other revenues as a percentage of Google segment revenues	10.2		%	12.0		%	10.2		%	12.3		%

Google other revenues consist primarily of revenues from:

•Apps, in-app purchases, and digital content in the Google Play store;

• Google Cloud offerings; and

• Hardware.

Our Google other revenues increased$918 million from the three months ended June 30, 2016 to the three months ended June 30, 2017 and increased$1,941 million from the six months ended June 30, 2016 to the six months ended June 30, 2017. The growth from the three and six months ended June 30, 2016 to the three and six months ended June 30, 2017 was primarily driven by revenues from Google Cloud offerings, revenues from Google Play, largely relating to in-app purchases (revenues which we recognize net of payout to developers), and hardware sales.

Other Bets

The following table presents our Other Bets revenues (in millions, unaudited):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Other Bets revenues	$	185		$	248		$	350		$	492
Other Bets revenues as a percentage of total revenues	0.9		%	1.0		%	0.8		%	1.0		%

Other Bets revenues consist primarily of revenues and sales from:

• Internet and TV services;

• Licensing and R&D services; and

• Nest branded hardware.

Our Other Bets revenues increased$63 million from the three months ended June 30, 2016 to the three months ended June 30, 2017 and increased$142 million from the six months ended June 30, 2016 to the six months ended June 30, 2017. The growth from the three and six months ended June 30, 2016 to the three and six months ended June 30, 2017 was primarily driven by revenues from Fiber internet and TV services, sales of Nest branded hardware, and revenues from Verily licensing and R&D services.

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Revenues by Geography

The following table presents our revenues by geography as a percentage of revenues, determined based on the billing addresses of our customers (unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016		2017
United States	47	%	47	%	46	%	47	%
EMEA	35	%	33	%	35	%	33	%
APAC	13	%	14	%	14	%	15	%
Other Americas	5	%	6	%	5	%	5	%

For the amounts of revenues by geography, see Note 2 of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Use of Constant Currency Revenues and Constant Currency Revenue Growth

The impact of currency exchange rates on our business is an important factor in understanding period to period comparisons. Our international revenues are favorably impacted as the U.S. dollar weakens relative to other foreign currencies, and unfavorably impacted as the U.S dollar strengthens relative to other foreign currencies. We use non-GAAP constant currency revenues and constant currency revenue growth for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe the presentation of results on a constant currency basis in addition to GAAP results helps improve the ability to understand our performance because they exclude the effects of foreign currency volatility that are not indicative of our core operating results.

Constant currency information compares results between periods as if exchange rates had remained constant period over period. We define constant currency revenues as total revenues excluding the impact of foreign exchange rate movements and hedging activities, and use it to determine the constant currency revenue growth on a year-on-year basis. Constant currency revenues are calculated by translating current period revenues using prior period exchange rates, as well as excluding any hedging impacts realized in the current period.

Constant currency revenue growth (expressed as a percentage) is calculated by determining the increase in current period revenues over prior period revenues where current period foreign currency revenues are translated using prior period exchange rates and hedging benefits are excluded from revenues of both periods.

These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not a measure of performance presented in accordance with GAAP.

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The following table presents the foreign exchange impact on our international revenues and total revenues (in millions, unaudited):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
EMEA revenues	$	7,485		$	8,545		$	14,615		$	16,636
Exclude foreign exchange impact on current period revenues using prior year rates	31			396			506			840
Exclude hedging impact recognized in current period	(70		)	12			(189		)	(146		)
EMEA constant currency revenues	$	7,446		$	8,953		$	14,932		$	17,330
Prior period EMEA revenues, excluding hedging impact	$	6,003		$	7,415		$	12,119		$	14,426
EMEA revenue growth	18		%	14		%	15		%	14		%
EMEA constant currency revenue growth	24		%	21		%	23		%	20		%
APAC revenues	$	2,904		$	3,730		$	5,703		$	7,349
Exclude foreign exchange impact on current period revenues using prior year rates	(25		)	(24		)	68			(87		)
Exclude hedging impact recognized in current period	(4		)	(11		)	(31		)	(70		)
APAC constant currency revenues	$	2,875		$	3,695		$	5,740		$	7,192
Prior period APAC revenues, excluding hedging impact	$	2,273		$	2,900		$	4,487		$	5,672
APAC revenue growth	23		%	28		%	22		%	29		%
APAC constant currency revenue growth	26		%	27		%	28		%	27		%
Other Americas revenues	$	1,076		$	1,413		$	2,023		$	2,684
Exclude foreign exchange impact on current period revenues using prior year rates	107			(8		)	301			(85		)
Exclude hedging impact recognized in current period	(4		)	(4		)	(27		)	(4		)
Other Americas constant currency revenues	$	1,179		$	1,401		$	2,297		$	2,595
Prior period Other Americas revenues, excluding hedging impact	$	932		$	1,072		$	1,828		$	1,996
Other Americas revenue growth	13		%	31		%	8		%	33		%
Other Americas constant currency revenue growth	27		%	31		%	26		%	30		%
United States revenues	$	10,035		$	12,322		$	19,416		$	24,091
United States revenue growth	25		%	23		%	23		%	24		%
Total revenues	$	21,500		$	26,010		$	41,757		$	50,760
Total constant currency revenues	$	21,535		$	26,371		$	42,385		$	51,208
Total revenue growth	21		%	21		%	19		%	22		%
Total constant currency revenue growth	25		%	23		%	24		%	23		%

For the three and six months ended June 30, 2017, our revenues from EMEA were unfavorably impacted by changes in foreign currency exchange rates, primarily because the U.S. dollar strengthened relative to certain currencies including the British pound and Euro.

For the three months ended June 30, 2017, our revenues from APAC were favorably impacted by changes in foreign currency exchange rates, primarily because the U.S. dollar weakened relative to certain currencies including the South Korean won and Taiwanese dollar. For the six months ended June 30, 2017, our revenues from APAC were favorably impacted by changes in foreign currency exchange rates, primarily because the U.S. dollar weakened relative to the Australian dollar, Japanese yen, South Korean won, and Taiwanese dollar.

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For the three months ended June 30, 2017, our revenues from Other Americas were slightly impacted by changes in foreign currency exchange rates, primarily because the U.S. dollar weakened relative to the Brazilian real, partially offset by the impact of the U.S. dollar strengthening relative to certain currencies including the Canadian dollar. For the six months ended June 30, 2017, our revenues from Other Americas were favorably impacted by changes in foreign currency exchange rates, primarily because the U.S. dollar weakened relative to the Brazilian real, partially offset by the impact of the U.S. dollar strengthening relative to the Mexican peso and Argentine peso.

Costs and Expenses

Cost of Revenues

Cost of revenues consists of traffic acquisition costs (TAC) which are paid to Google Network Members primarily for ads displayed on their properties and amounts paid to our distribution partners who make available our search access points and services. Our distribution partners include browser providers, mobile carriers, original equipment manufacturers, and software developers.

Additionally, other cost of revenues (which is the cost of revenues excluding traffic acquisition costs) includes the following:

• The expenses associated with the operation of our data centers (including depreciation, labor including SBC, energy, bandwidth, and other equipment costs);

• Content acquisition costs primarily related to payments to certain content providers from whom we license their video and other content for distribution on YouTube and Google Play (we pay fees to these content providers based on revenues generated or a flat fee);

• Credit card and other transaction fees related to processing customer transactions;

• Inventory related costs for hardware we sell; and

• Amortization of certain intangible assets.

The following tables present our costs of revenues, including traffic acquisition costs (in millions, unaudited):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Traffic acquisition costs	$	3,975		$	5,091		$	7,763		$	9,720
Other cost of revenues	4,155			5,282			8,015			10,448
Total cost of revenues	$	8,130		$	10,373		$	15,778		$	20,168
Total cost of revenues as a percentage of revenues	37.8		%	39.9		%	37.8		%	39.7		%
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Traffic acquisition costs to distribution partners	$	1,352		$	2,049		$	2,569		$	3,854
Traffic acquisition costs to distribution partners as a percentage of Google properties revenues (Google properties TAC rate)	8.8		%	11.1		%	8.6		%	10.8		%
Traffic acquisition costs to Google Network Members	$	2,623		$	3,042		$	5,194		$	5,866
Traffic acquisition costs to Google Network Members as a percentage of Google Network Members' properties revenues (Network Members TAC rate)	70.1		%	71.6		%	69.9		%	71.1		%
Traffic acquisition costs	$	3,975		$	5,091		$	7,763		$	9,720
Traffic acquisition costs as a percentage of advertising revenues (Aggregate TAC rate)	20.8		%	22.5		%	20.9		%	22.0		%

The cost of revenues that we incur related to revenues generated from ads placed on the properties of our Google Network Members are significantly higher than the costs of revenues that we incur related to revenues generated from ads placed on Google properties because most of the advertiser revenues from ads served on Google Network Members’ properties are paid as TAC to our Google Network Members.

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Cost of revenues increased$2,243 million from the three months ended June 30, 2016 to the three months ended June 30, 2017 and increased$4,390 million from the six months ended June 30, 2016 to the six months ended June 30, 2017 due to various factors, including (1) traffic acquisition costs, (2) data center costs which include depreciation, labor (including SBC), energy, bandwidth, and other equipment costs, (3) content acquisition costs as a result of increased activities related to YouTube, and (4) hardware related costs.

The increases in TAC to distribution partners and the associated Google properties TAC rate were largely driven by a shift to mobile, which carries higher TAC, and the fact that more mobile searches are subject to TAC. The increases in TAC to Google Network Members and the associated Network Members TAC rate were primarily driven by the shift in advertising buying from our traditional network business to programmatic advertising buying which carries higher TAC. The increase in the aggregate TAC rate was also partially offset by a favorable revenue mix shift from Google Network Member properties to Google properties.

We expect cost of revenues to increase in dollar amount and as a percentage of total revenues for the remainder of 2017 and in future periods based on a number of factors, including the following:

• The relative revenue growth rates of Google properties and our Google Network Members’ properties;

• Traffic acquisition costs paid to our distribution partners, which are affected by changes in device mix between mobile, desktop and tablet, partner mix, partner agreement terms such as revenue share arrangements, and the percentage of queries channeled through paid access points;

• Traffic acquisition costs paid to Google Network Members, which are affected by ongoing adoption of programmatic advertising buying and changes in partner agreement terms;

• The growth rates of expenses associated with our data center operations, content acquisition costs, as well as our hardware inventory and related costs; and

• Increased proportion of non-advertising revenues as part of our total revenues.

Research and Development

The following table presents our R&D expenses (in millions, unaudited):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Research and development expenses	$	3,363		$	4,172		$	6,730		$	8,114
Research and development expenses as a percentage of revenues	15.6		%	16.0		%	16.1		%	16.0		%

R&D expenses consist primarily of:

• Labor and facilities-related costs, including SBC, for employees responsible for R&D of our existing and new products and services and

• Depreciation and equipment-related expenses.

R&D expenses increased$809 million from the three months ended June 30, 2016 to the three months ended June 30, 2017. The increase was primarily due to an increase in labor and facilities-related costs of $605 million largely resulting from an 18% increase in headcount and the shift in the timing of our annual equity refresh cycle. In addition, there was an increase in depreciation and equipment-related expenses of $125 million and an increase in professional services expenses of $59 million largely due to additional expenses incurred for outsourced services.

R&D expenses increased$1,384 million from the six months ended June 30, 2016 to the six months ended June 30, 2017. The increase was primarily due to an increase in labor and facilities-related costs of $1.1 billion, largely resulting from a 17% increase in headcount and the shift in the timing of our annual equity refresh cycle. In addition, there was an increase in depreciation and equipment-related expenses of $152 million and an increase in professional services expenses of $81 million largely due to additional expenses incurred for outsourced services.

We expect that R&D expenses will increase in dollar amount and may fluctuate as a percentage of revenues for the remainder of 2017 and in future periods.

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Sales and Marketing

The following table presents our sales and marketing expenses (in millions, unaudited):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Sales and marketing expenses	$	2,415		$	2,897		$	4,802		$	5,541
Sales and marketing expenses as a percentage of revenues	11.2		%	11.1		%	11.5		%	10.9		%

Sales and marketing expenses consist primarily of:

• Labor and facilities-related costs, including SBC, for employees engaged in sales and marketing, sales support, and certain customer service functions and

• Advertising and promotional expenditures related to our products and services.

Sales and marketing expenses increased$482 million from the three months ended June 30, 2016 to the three months ended June 30, 2017. The increase was primarily due to an increase in labor and facilities-related costs of $255 million, largely resulting from a 5% increase in headcount and the shift in the timing of our annual equity refresh cycle. In addition, there was an increase in advertising and promotional expenses of $200 million largely due to increases in marketing and promotion-related expenses for our hardware products and YouTube.

Sales and marketing expenses increased$739 million from the six months ended June 30, 2016 to the six months ended June 30, 2017. The increase was primarily due to an increase in labor and facilities-related costs of $493 million, largely resulting from a 7% increase in headcount and the shift in the timing of our annual equity refresh cycle. In addition, there was an increase in advertising and promotional expenses of $230 million largely due to increases in marketing and promotion-related expenses for our hardware products and YouTube.

We expect that sales and marketing expenses will increase in dollar amount and may fluctuate as a percentage of revenues for the remainder of 2017 and in future periods.

General and Administrative

The following table presents our general and administrative expenses (in millions, unaudited):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
General and administrative expenses	$	1,624		$	1,700		$	3,137		$	3,501
General and administrative expenses as a percentage of revenues	7.6		%	6.5		%	7.5		%	6.9		%

General and administrative expenses consist primarily of:

• Labor and facilities-related costs, including SBC, for employees in our facilities, finance, human resources, information technology, and legal organizations;

• Depreciation and equipment-related expenses;

• Professional services fees primarily related to outside legal, audit, information technology consulting, and outsourcing services; and

• Amortization of certain intangible assets.

General and administrative expenses increased$76 million from the three months ended June 30, 2016 to the three months ended June 30, 2017. The increase was primarily due to an increase in labor and facilities-related costs of $88 million, largely resulting from a 14% increase in headcount and the shift in the timing of our annual equity refresh cycle. This increase was offset by a decrease in miscellaneous general and administrative expenses.

General and administrative expenses increased$364 million from the six months ended June 30, 2016 to the six months ended June 30, 2017. The increase was primarily due to an increase in labor and facilities-related costs of $243 million, largely resulting from a 15% increase in headcount and the shift in the timing of our annual equity refresh cycle. In addition, there was an increase in professional service fees of $158 million primarily due to additional expenses incurred for consulting and outsourced services, as well as lower legal-related costs in the first quarter of 2016. These increases were offset by a decrease in miscellaneous general and administrative expenses.

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We expect general and administrative expenses will increase in dollar amount and may fluctuate as a percentage of revenues for the remainder of 2017 and in future periods.

European Commission Fine

On June 27, 2017, the EC announced its decision that certain actions taken by Google regarding its display and ranking of shopping search results and ads infringed European competition law. The EC decision imposes a €2.42 billion (approximately $2.74 billion) fine and directs the termination of the conduct at issue. We accrued the fine in the second quarter of 2017, resulting in a charge of approximately $2.74 billion.

Other Income (Expense), Net

The following table presents other income (expense), net (in millions):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
	(unaudited)
Other income (expense), net	$	151		$	245		$	(62	)	$	496
Other income (expense), net, as a percentage of revenues	0.7		%	0.9		%	(0.2		)%	1.0		%

Other income (expense), net, increased$94 million from the three months ended June 30, 2016 to the three months ended June 30, 2017. This increase was primarily driven by reduced costs of our foreign currency hedging activities.

Other income (expense), net, increased$558 million from the six months ended June 30, 2016 to the six months ended June 30, 2017. This increase was primarily driven by reduced costs of our foreign currency hedging activities, and decreased losses on marketable and non-marketable investments.

The costs of our foreign exchange hedging activities recognized in other income (expense), net, are primarily a function of the notional amount of the option and forward contracts and their related duration, the movement of foreign exchange rates relative to the contract prices, the volatility of foreign exchange rates, and forward points. The hedging costs expensed in other income (expense), net, decreased as a result of less option premiums paid after we began to use foreign currency forward contracts to hedge our forecasted revenues in the fourth quarter of 2016.

We expect that other income (expense), net, will fluctuate in dollar amount for the remainder of 2017 and future periods as it is largely driven by market dynamics.

Provision for Income Taxes

The following table presents our provision for income taxes (in millions, unaudited) and effective tax rate:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Provision for income taxes	$	1,242		$	853		$	2,164		$	2,246
Effective tax rate	20.3		%	19.5		%	19.2		%	20.1		%

Our provision for income taxes and our effective tax rate decreased from the three months ended June 30, 2016 to the three months ended June 30, 2017 as a result of proportionately more earnings generated in jurisdictions with lower statutory tax rates, an increase in discrete benefits recognized in 2017 from the resolution of a multi-year audit in the U.S. and the impact of ASC 718 as related to the tax effect of share-based compensation, largely offset by the EC fine that is not tax-deductible.

Our provision for income taxes and our effective tax rate increased from the six months ended June 30, 2016 to the six months ended June 30, 2017, primarily due to the EC fine that is not tax-deductible, largely offset by proportionately more earnings generated in jurisdictions with lower statutory tax rates and discrete benefits recognized in 2017 from the resolution of a multi-year audit in the U.S. and the impact of ASC 718 as related to the tax effect of share-based compensation.

Our future effective tax rate could be adversely affected by earnings being lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates, the net gains

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and losses recognized by legal entities on certain hedges and related hedged intercompany and other transactions under our foreign exchange risk management program, changes in the valuation of our deferred tax assets, or changes in tax laws, regulations, or accounting principles, as well as certain discrete items.

Capital Resources and Liquidity

As of June 30, 2017, we had $94.7 billion in cash, cash equivalents, and marketable securities. Cash equivalents and marketable securities are comprised of time deposits, money market and other funds, highly liquid debt instruments of the U.S. government and its agencies, debt instruments issued by foreign governments, debt instruments issued by municipalities in the U.S., corporate debt securities, agency mortgage-backed securities, and asset-backed securities. From time to time, we may hold marketable equity securities obtained through acquisitions or strategic investments in private companies that subsequently go public.

As of June 30, 2017, $57.9 billion of the $94.7 billion of cash, cash equivalents, and marketable securities were held by our foreign subsidiaries. If these funds were needed for our operations in the U.S., we would be required to accrue and pay U.S. taxes to repatriate these funds. However, our intent is to permanently reinvest these funds outside of the U.S. and our current plans do not demonstrate a need to repatriate them to fund our U.S. operations.

Our principal sources of liquidity are our cash, cash equivalents, and marketable securities, as well as the cash flow that we generate from our operations. We have a short-term debt financing program of up to $5.0 billion through the issuance of commercial paper. Net proceeds from this program are used for general corporate purposes. We had no commercial paper outstanding as of June 30, 2017. We have a $4.0 billion revolving credit facility expiring in February 2021. The interest rate for the credit facility is determined based on a formula using certain market rates. As of June 30, 2017, no amounts were outstanding under the credit facility. We believe that our sources of funding will be sufficient to satisfy our currently anticipated cash requirements including capital expenditures, working capital requirements, potential acquisitions, and other liquidity requirements through at least the next 12 months.

As of June 30, 2017, we have senior unsecured notes outstanding due in 2021, 2024, and 2026 with a total carrying value of $3.9 billion and a total estimated fair value of $4.0 billion.

In October 2016, the board of directors of Alphabet authorized the company to repurchase up to $7,019,340,976.83 of its Class C capital stock. In the six months ended June 30, 2017, we repurchased and subsequently retired 3.1 million shares of Alphabet Class C capital stock for an aggregate amount of $2.7 billion.

In January 2017, Temasek, a Singapore-based investment company, signed a binding commitment to purchase a non-controlling interest in Verily for an aggregate of $800 million in cash. The first tranche of the investment closed and we received $480 million in the first quarter of 2017. The final tranche closed and we received the remaining $320 million in July 2017.

At December 31, 2016, we had a $1.4 billion interest-free, three-year prepayable promissory note (Note Receivable) due October 2017. The Note Receivable was fully repaid as of June 30, 2017.

For the six months ended June 30, 2016 and 2017, our cash flows were as follows (in millions, unaudited):

	Six Months Ended
	June 30,
	2016			2017
Net cash provided by operating activities	$	16,778		$	16,951
Net cash used in investing activities	(13,418		)	(10,023		)
Net cash used in financing activities	(6,351		)	(4,414		)

Cash Provided by Operating Activities

Our largest source of cash provided by our operations are advertising revenues generated by Google properties and Google Network Members' properties. Additionally, we generate cash through sales of apps, in-app purchases and digital content, hardware products, licensing arrangements, and service fees received for Google Cloud offerings.

Our primary uses of cash from our operating activities include payments to our Google Network Members and distribution partners, and payments for content acquisition costs. In addition, uses of cash from operating activities include compensation and related costs, hardware costs, other general corporate expenditures, and income taxes.

Net cash provided by operating activities increased from the six months ended June 30, 2016 to the six months ended June 30, 2017 primarily due to increases in cash received from advertising revenues and Google other revenues (net of payouts to developers) offset by increases in cash paid for cost of revenues, operating expenses, and income taxes.

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Cash Used in Investing Activities

Cash provided by or used in investing activities primarily consists of purchases of property and equipment, purchases, maturities, and sales of marketable and non-marketable securities, payments for acquisitions, and proceeds from the collection of notes receivable.

Net cash used in investing activities decreased from the six months ended June 30, 2016 to the six months ended June 30, 2017 primarily due to decreases in purchases of marketable securities, increases in cash proceeds received from the collection of the Lenovo note receivable, and decreases in cash collateral paid related to securities lending. These items were offset by decreases in maturities and sales of marketable securities and decreases in purchases of property and equipment.

Cash Used in Financing Activities

Cash provided by or used in financing activities consists primarily of net proceeds or payments from issuance or repayments of debt, repurchases of capital stock, net proceeds or payments from stock-based award activities, and proceeds from the sale of subsidiary shares.

Net cash used in financing activities decreased from the six months ended June 30, 2016 to the six months ended June 30, 2017 primarily driven by decreases in the repayment of debt, decreases in repurchases of capital stock, and increases in proceeds from the sale of subsidiary shares. These items were offset by decreases in proceeds received from the issuance of debt and increases in net payments related to stock-based award activities.

Contractual Obligations

We had long-term taxes payable of $4.1 billion as of June 30, 2017 primarily related to uncertain tax positions. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in individual years beyond 12 months due to uncertainties in the timing of tax audit outcomes.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP). In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosure of contingent assets and liabilities. In some cases, we could reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates, which we discuss further below. We have reviewed our critical accounting policies and estimates with the audit committee of our board of directors.

Revenues

For the sale of third-party goods and services, we evaluate whether we are the principal, and report revenues on a gross basis, or an agent, and report revenues on a net basis. In this assessment, we consider if we obtain control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment, inventory risk, and discretion in establishing price.

See Note 1 of Part I, Item 1 of this Quarterly Report on Form 10-Q for the summary of significant accounting policies. In addition, see Part I, Item 7, "Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2016. There have been no other material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, 2016.

Available Information

Our website is located at www.abc.xyz, and our investor relations website is located at www.abc.xyz/investor. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and our Proxy Statements are available through our investor relations website, free of charge, after we file them with the SEC. We also provide a link to the section of the SEC's website at www.sec.gov that has all of the reports that we file or furnish with the SEC. You may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You can get information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

We webcast via our investor relations website our earnings calls and certain events we participate in or host with members of the investment community. Our investor relations website also provides notifications of news or

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announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs. Further corporate governance information, including our certificate of incorporation, bylaws, governance guidelines, board committee charters, and code of conduct, is also available on our investor relations website under the heading "Other." The content of our websites are not incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to financial market risks, including changes in currency exchange rates and interest rates.

Foreign Currency Exchange Risk

We transact business globally in multiple currencies. Our international revenues, as well as costs and expenses denominated in foreign currencies, expose us to the risk of fluctuations in foreign currency exchange rates against the U.S. dollar. We are a net receiver of foreign currencies and therefore benefit from a weakening of the U.S. dollar and are adversely affected by a strengthening of the U.S. dollar relative to the foreign currency. As of June 30, 2017, our most significant currency exposures are the British pound, Euro, and Japanese yen.

We use foreign currency forwards and option contracts, including collars (an option strategy comprised of a combination of purchased and written options) to protect our forecasted U.S. dollar-equivalent earnings from changes in foreign currency exchange rates. When the U.S. dollar strengthens, gains from foreign currency options and forwards reduce the foreign currency losses related to our earnings. When the U.S. dollar weakens, losses from foreign currency options and forwards offset the foreign currency gains related to our earnings. These hedging contracts reduce, but do not entirely eliminate, the impact of currency exchange rate movements. We designate these contracts as cash flow hedges for accounting purposes. We record the effective portion of these contracts as a component of accumulated other comprehensive income (AOCI) and subsequently reclassify them into revenues to offset the hedged exposures as they occur.For foreign currency collars, we include the change in time value in our assessment of hedge effectiveness.For forwards and all other option contracts, we exclude the change in the forward points and time value from our assessment of hedge effectiveness. We recognize changes of the excluded components in other income (expense), net.

We considered the historical trends in currency exchange rates and determined that it was reasonably possible that changes in exchange rates of 10% could be experienced in the near term. If the U.S. dollar weakened by 10% as of June 30, 2017, the amount recorded in AOCI related to our foreign exchange contracts before tax effect would have been approximately $1.1 billion lower as of June 30, 2017. The change in the value recorded in AOCI would be expected to offset a corresponding foreign currency change in the forecasted hedged revenues when recognized.

In addition, we use foreign exchange forward contracts to offset the foreign exchange risk on our assets and liabilities denominated in currencies other than the local currency of the subsidiary. These forward contracts reduce, but do not entirely eliminate the impact of currency exchange rate movements on our assets and liabilities. The foreign currency gains and losses on the assets and liabilities are recorded in other income (expense), net, which are offset by the gains and losses on the forward contracts.

We considered the historical trends in currency exchange rates and determined that it was reasonably possible that adverse changes in exchange rates of 10% for all currencies could be experienced in the near term. These reasonably possible adverse changes in exchange rates of 10% were applied to total monetary assets and liabilities denominated in currencies other than the local currencies at the balance sheet dates to compute the adverse impact these changes would have had on our income before income taxes in the near term. These changes would have resulted in an adverse impact on income before income taxes of approximately $219 million as of June 30, 2017. The adverse impact as of June 30, 2017 is after consideration of the offsetting effect of approximately $612 million from foreign exchange contracts in place for the month of June 30, 2017.

Interest Rate Risk

Our investment strategy is to achieve a return that will allow us to preserve capital and maintain liquidity requirements. We invest primarily in debt securities including those of the U.S. government and its agencies, corporate debt securities, agency mortgage-backed securities, money market and other funds, municipal securities, time deposits, asset backed securities, and debt instruments issued by foreign governments. By policy, we limit the amount of credit exposure to any one issuer. Our investments in both fixed rate and floating rate interest earning securities carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. As of December 31, 2016 and June 30, 2017, unrealized losses on our marketable debt securities were primarily due to temporary interest rate fluctuations as a result of higher market interest rates compared to interest rates at the time of purchase. We account for both fixed and variable rate securities at fair value with changes on gains and losses recorded in AOCI until the securities are sold.

We considered the historical volatility of short-term interest rates and determined that it was reasonably possible that an adverse change of 100 basis points could be experienced in the near term. A hypothetical 1.00% (100 basis points) increase in interest rates would have resulted in a decrease in the fair value of our marketable securities of approximately $1.3 billion as of June 30, 2017.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of June 30, 2017, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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PART II.     OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, see Note 11 “Contingencies - Legal Matters” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

ITEM 1A.RISK FACTORS

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2016, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common and capital stock. There have been no material changes to our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2016.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table presents information with respect to Alphabet's repurchases of Class C capital stock during the quarter ended June 30, 2017.

Period	Total Number of Shares Purchased (in thousands) (1)	Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Programs (in thousands) (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions)
April 1 - 30	285	$	828.57	285	$	5,576
May 1 - 31	882	$	938.61	882	$	4,749
June 1 - 30	494	$	962.65	494	$	4,274
Total	1,661	$	922.28	1,661

⁽¹⁾  In October 2016, the board of directors of Alphabet authorized the company to repurchase up to $7,019,340,976.83 of its Class C capital stock. The repurchases are being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans. The repurchase program does not have an expiration date. SeeNote 13 in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information related to share repurchases.

⁽²⁾  Average price paid per share includes costs associated with the repurchases.

ITEM 6. EXHIBITS

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ALPHABET INC.
July 24, 2017	By:	/s/    RUTH M. PORAT
		Ruth M. Porat
		Senior Vice President and Chief Financial Officer

		ALPHABET INC.
July 24, 2017	By:	/s/    JAMES G. CAMPBELL
		James G. Campbell
		Vice President, Corporate Controller, and Chief Accounting Officer

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EXHIBIT INDEX

Exhibit Number		Description	Incorporated by reference herein
			Form	Date
10.01		Alphabet Inc. 2012 Stock Plan	Current Report on Form 8-K (File No. 001-37580)	June 9, 2017
31.01	*	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.02	*	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.01	‡	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.01		Google blog post dated June 27, 2017	Current Report on Form 8-K (File No. 001-37580)	June 27, 2017
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

____________________ 

* Filed herewith.

‡ Furnished herewith.

47

EX-31.01

Exhibit 31.01

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Larry Page, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Alphabet Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 24, 2017

/S/    LARRY PAGE

Larry Page

Chief Executive Officer

(Principal Executive Officer)

EX-31.02

Exhibit 31.02

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ruth Porat, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Alphabet Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 24, 2017

/S/    RUTH PORAT

Ruth Porat

Senior Vice President and

Chief Financial Officer

(Principal Financial Officer)

EX-32.01

Exhibit 32.01

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Larry Page, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Alphabet Inc. for the quarterly period endedJune 30, 2017, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Alphabet Inc.

Date: July 24, 2017

By:	/S/    LARRY PAGE
Name:	Larry Page
Title:	Chief Executive Officer (Principal Executive Officer)

I, Ruth Porat, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Alphabet Inc. for the quarterly period endedJune 30, 2017, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Alphabet Inc.

Date: July 24, 2017

By:	/S/    RUTH PORAT
Name:	Ruth Porat
Title:	Senior Vice President and Chief Financial Officer (Principal Financial Officer)

The foregoing certifications are not deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), and are not to be incorporated by reference into any filing of Alphabet Inc. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

XML

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	Jun. 30, 2017	Jul. 17, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Trading Symbol	GOOG, GOOGL
Entity Registrant Name	Alphabet Inc.
Entity Central Index Key	0001652044
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		298,044,925
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		47,100,911
Class C Capital Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		347,733,652

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 15,711	$ 12,918
Marketable securities	79,002	73,415
Total cash, cash equivalents, and marketable securities	94,713	86,333
Accounts receivable, net of allowance of $467 and $546	14,003	14,137
Income taxes receivable, net	874	95
Inventory	398	268
Prepaid revenue share, expenses and other assets	2,398	4,575
Total current assets	112,386	105,408
Prepaid revenue share, expenses and other assets, non-current	2,004	1,819
Non-marketable investments	6,642	5,878
Deferred income taxes	376	383
Property and equipment, net	37,676	34,234
Intangible assets, net	2,933	3,307
Goodwill	16,604	16,468
Total assets	178,621	167,497
Current liabilities:
Accounts payable	2,488	2,041
Accrued compensation and benefits	3,271	3,976
Accrued expenses and other current liabilities	8,560	6,144
Accrued revenue share	3,007	2,942
Deferred revenue	1,226	1,099
Income taxes payable, net	133	554
Total current liabilities	18,685	16,756
Long-term debt	3,955	3,935
Deferred revenue, non-current	345	202
Income taxes payable, non-current	4,128	4,677
Deferred income taxes	369	226
Other long-term liabilities	2,853	2,665
Total liabilities	30,335	28,461
Commitments and Contingencies (Note 11)
Stockholders’ equity:
Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding	0	0
Class A and Class B common stock, and Class C capital stock and additional paid-in capital, $0.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000, Class C 3,000,000); 691,293 (Class A 296,992, Class B 47,437, Class C 346,864) and 692,876 (Class A 298,043, Class B 47,101, Class C 347,732) shares issued and outstanding	38,509	36,307
Accumulated other comprehensive loss	(1,728)	(2,402)
Retained earnings	111,505	105,131
Total stockholders’ equity	148,286	139,036
Total liabilities and stockholders’ equity	$ 178,621	$ 167,497

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Accounts receivable, allowance	$ 546	$ 467
Convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized (in shares)	100,000,000	100,000,000
Convertible preferred stock, shares issued (in shares)	0	0
Convertible preferred stock, shares outstanding (in shares)	0	0
Common stock and capital, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	15,000,000,000	15,000,000,000
Common stock and capital, shares issued (in shares)	692,876,000	691,293,000
Common stock and capital, shares outstanding (in shares)	692,876,000	691,293,000
Class A Common Stock
Common stock and capital, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	9,000,000,000	9,000,000,000
Common stock and capital, shares issued (in shares)	298,043,000	296,992,000
Common stock and capital, shares outstanding (in shares)	298,043,000	296,992,000
Class B Common Stock
Common stock and capital, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	3,000,000,000	3,000,000,000
Common stock and capital, shares issued (in shares)	47,101,000	47,437,000
Common stock and capital, shares outstanding (in shares)	47,101,000	47,437,000
Class C Capital Stock
Common stock and capital, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock and capital stock, shares authorized (in shares)	3,000,000,000	3,000,000,000
Common stock and capital, shares issued (in shares)	347,732,000	346,864,000
Common stock and capital, shares outstanding (in shares)	347,732,000	346,864,000

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CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Revenues	$ 26,010	$ 21,500	$ 50,760	$ 41,757
Costs and expenses:
Cost of revenues	10,373	8,130	20,168	15,778
Research and development	4,172	3,363	8,114	6,730
Sales and marketing	2,897	2,415	5,541	4,802
General and administrative	1,700	1,624	3,501	3,137
European Commission fine	2,736	0	2,736	0
Total costs and expenses	21,878	15,532	40,060	30,447
Income from operations	4,132	5,968	10,700	11,310
Other income (expense), net	245	151	496	(62)
Income before income taxes	4,377	6,119	11,196	11,248
Provision for income taxes	853	1,242	2,246	2,164
Net income	$ 3,524	$ 4,877	$ 8,950	$ 9,084
Basic net income per share of Class A and B common stock and Class C capital stock (in dollars per share)	$ 5.09	$ 7.11	$ 12.94	$ 13.23
Diluted net income per share of Class A and B common stock and Class C capital stock (in dollars per share)	$ 5.01	$ 7.00	$ 12.74	$ 13.01

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 3,524	$ 4,877	$ 8,950	$ 9,084
Other comprehensive income:
Change in foreign currency translation adjustment	565	(119)	1,016	37
Available-for-sale investments:
Change in net unrealized gains (losses)	86	200	225	556
Less: reclassification adjustment for net (gains) losses included in net income	26	14	51	183
Net change (net of tax effect of $79, $0, $198, and $0)	112	214	276	739
Cash flow hedges:
Change in net unrealized gains (losses)	(230)	100	(459)	116
Less: reclassification adjustment for net (gains) losses included in net income	(6)	(52)	(159)	(169)
Net change (net of tax effect of $28, $143, $9, and $292)	(236)	48	(618)	(53)
Other comprehensive income	441	143	674	723
Comprehensive income	$ 3,965	$ 5,020	$ 9,624	$ 9,807

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Tax expense (benefit) related to available-for-sale investments	$ 0	$ 79	$ 0	$ 198
Tax expense (benefit) related to cash flow hedges	$ (143)	$ 28	$ (292)	$ (9)

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Operating activities
Net income	$ 8,950	$ 9,084
Adjustments:
Depreciation and impairment of property and equipment	2,711	2,426
Amortization and impairment of intangible assets	417	435
Stock-based compensation expense	4,012	2,997
Deferred income taxes	538	364
Loss on marketable and non-marketable investments, net	84	294
Other	34	91
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	431	(17)
Income taxes, net	(1,779)	1,680
Prepaid revenue share, expenses and other assets	(454)	161
Accounts payable	119	(221)
Accrued expenses and other liabilities	1,687	(471)
Accrued revenue share	6	(48)
Deferred revenue	195	3
Net cash provided by operating activities	16,951	16,778
Investing activities
Purchases of property and equipment	(5,339)	(4,580)
Proceeds from disposals of property and equipment	54	29
Purchases of marketable securities	(39,676)	(45,588)
Maturities and sales of marketable securities	34,238	37,789
Purchases of non-marketable investments	(694)	(681)
Maturities and sales of non-marketable investments	118	98
Cash collateral related to securities lending	0	(363)
Investments in reverse repurchase agreements	0	(50)
Acquisitions, net of cash acquired, and purchases of intangible assets	(143)	(72)
Proceeds from collection of notes receivable	1,419	0
Net cash used in investing activities	(10,023)	(13,418)
Financing activities
Net payments related to stock-based award activities	(2,093)	(1,610)
Repurchases of capital stock	(2,745)	(3,693)
Proceeds from issuance of debt, net of costs	0	5,753
Repayments of debt	(56)	(6,801)
Proceeds from sale of subsidiary shares	480	0
Net cash used in financing activities	(4,414)	(6,351)
Effect of exchange rate changes on cash and cash equivalents	279	69
Net increase (decrease) in cash and cash equivalents	2,793	(2,922)
Cash and cash equivalents at beginning of period	12,918	16,549
Cash and cash equivalents at end of period	$ 15,711	$ 13,627

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Nature of Operations and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Google Inc. (Google) was incorporated in California in 1998 and re-incorporated in Delaware in 2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc. (Alphabet) became the successor issuer to Google. We generate revenues primarily by delivering relevant, cost-effective online advertising.

Basis of Consolidation

The consolidated financial statements of Alphabet include the accounts of Alphabet and all wholly-owned subsidiaries as well as all variable interest entities where we are the primary beneficiary. All intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

The accompanying Consolidated Balance Sheet as of June 30, 2017, the Consolidated Statements of Income for the three and six months ended June 30, 2016 and 2017, the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2016 and 2017, and the Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2017 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of June 30, 2017, our results of operations for the three and six months ended June 30, 2016 and 2017, and our cash flows for the six months ended June 30, 2016 and 2017. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017.

These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on February 2, 2017.

Use of Estimates

Preparation of the consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable and sales allowances, fair values of financial instruments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, income taxes, and contingent liabilities, among others. We base our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Fair Value of Financial Instruments

Our financial assets and financial liabilities including cash equivalents, marketable securities, foreign currency and interest rate derivative contracts, and non-marketable debt securities are measured and recorded at fair value on a recurring basis. We measure certain financial assets at fair value for disclosure purposes, as well as on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. Our other current financial assets and our other current financial liabilities have fair values that approximate their carrying value.

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Level 3 - Unobservable inputs that are supported by little or no market activities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-01 (ASU 2016-01) "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2017. The most significant impact to our consolidated financial statements relates to the recognition and measurement of equity investments at fair value in our consolidated statement of income. We expect to elect the measurement alternative, defined as cost, less impairments, adjusted by observable price changes. We anticipate that the adoption of ASU 2016-01 will increase the volatility of our other income (expense), net, as a result of the remeasurement of our equity securities upon the occurrence of observable price changes and impairments.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease recognition requirements in Accounting Standards Codification (ASC) Topic 840, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. Topic 842 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2018. Early adoption by public entities is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and there are certain optional practical expedients that an entity may elect to apply. Full retrospective application is prohibited. We anticipate that the adoption of Topic 842 will materially affect our Consolidated Balance Sheets. We are in the process of implementing changes to our systems and processes in conjunction with our review of existing lease agreements. We plan to adopt Topic 842 effective January 1, 2019 and we are evaluating the use of the optional practical expedients.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2019. We are currently in the process of evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04) “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019; early adoption is permitted. We currently anticipate that the adoption of ASU 2017-04 will not have a material impact on our consolidated financial statements.

Recently adopted accounting pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) "Revenue from Contracts with Customers." Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605), and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We adopted Topic 606 as of January 1, 2017 using the modified retrospective transition method. See Note 2 for further details.

In January 2017, the FASB issued Accounting Standards Update No. 2017-01 (ASU 2017-01) “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASU 2017-01 provides guidance to evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. If substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single asset or a group of similar assets, the assets acquired (or disposed of) are not considered a business. We adopted ASU 2017-01 as of January 1, 2017 on a prospective basis.

Prior Period Reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation.

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Revenues

6 Months Ended

Jun. 30, 2017

Revenue Recognition [Abstract]

Revenues

Revenues

Adoption of ASC Topic 606, "Revenue from Contracts with Customers"

On January 1, 2017, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2017. Results for reporting periods beginning after January 1, 2017 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

We recorded a net reduction to opening retained earnings of $15 million as of January 1, 2017 due to the cumulative impact of adopting Topic 606, with the impact primarily related to our non-advertising revenues. The impact to revenues as a result of applying Topic 606 was an increase of $8 million and $22 million for the three and six months ended June 30, 2017, respectively.

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

The following table presents our revenues disaggregated by revenue source (in millions, unaudited). Sales and usage-based taxes are excluded from revenues.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016(1)		2017		2016(1)		2017
Google properties	$	15,400	$	18,425	$	29,728	$	35,828
Google Network Members' properties	3,743		4,247		7,435		8,255
Google advertising revenues	19,143		22,672		37,163		44,083
Google other revenues	2,172		3,090		4,244		6,185
Other Bets revenues	185		248		350		492
Total revenues(2)	$	21,500	$	26,010	$	41,757	$	50,760

⁽¹⁾  As noted above, prior period amounts have not been adjusted under the modified retrospective method.

⁽²⁾  Revenues include hedging gains of $78 million and $3 million for the three months ended June 30, 2016 and 2017, respectively, and $247 million and $220 million for the six months endedJune 30, 2016 and 2017, respectively, which do not represent revenues recognized from contracts with customers.

The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016		2017
United States	$	10,035	$	12,322	$	19,416	$	24,091
EMEA(1)	7,485		8,545		14,615		16,636
APAC(1)	2,904		3,730		5,703		7,349
Other Americas(1)	1,076		1,413		2,023		2,684
Total revenues(2)	$	21,500	$	26,010	$	41,757	$	50,760

⁽¹⁾  Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific (APAC); and Canada and Latin America (Other Americas).

⁽²⁾  Revenues include hedging gains for the three and six months endedJune 30, 2016 and 2017.

Advertising Revenues

We generate revenues primarily by delivering advertising on Google properties and Google Network Members’ properties.

Google properties revenues consist primarily of advertising revenues generated on Google.com, the Google app, YouTube, and other Google owned and operated properties like Gmail, Google Maps, and Google Play.

Google Network Members’ properties revenues consist primarily of advertising revenues generated from placing ads on Google Network Members’ properties.

Our customers generally purchase advertising inventory through AdWords, DoubleClick Bid Manager, and DoubleClick AdExchange, among others.

Most of our customers pay us on a cost-per-click basis (CPC), which means that an advertiser pays us only when a user clicks on an ad on Google properties or Google Network Members' properties or views certain YouTube ad formats like TrueView. For these customers, we recognize revenue each time a user clicks on the ad or when a user views the ad for a specified period of time.

We also offer advertising on other bases such as cost-per-impression (CPM), which means an advertiser pays us based on the number of times their ads are displayed on Google properties or Google Network Members’ properties. For these customers, we recognize revenue each time an ad is displayed.

Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration.

For ads placed on Google Network Members’ properties, we evaluate whether we are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis). Generally, we report advertising revenues for ads placed on Google Network Members’ properties on a gross basis, that is, the amounts billed to our customers are recorded as revenues, and amounts paid to publishers are recorded as cost of revenues. We are the principal because we control the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to monetize the advertising inventory, being primarily responsible to our customers, having discretion in establishing pricing, or a combination of these.

Other Revenues

Google other revenues and Other Bets revenues consist primarily of revenues from:

• Apps, in-app purchases, and digital content in the Google Play store;

• Google Cloud offerings;

• Hardware; and

• Other miscellaneous products and services.

As it relates to Google other revenues, the most significant judgment is determining whether we are the principal or agent for app sales and in-app purchases through the Google Play store. We report revenues from these transactions on a net basis because our performance obligation is to facilitate a transaction between app developers and end users, for which we earn a commission. Consequently, the portion of the gross amount billed to end users that is remitted to app developers is not reflected as revenues.

Arrangements with Multiple Performance Obligations

Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost plus margin.

Deferred Revenues

We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. The increase in the deferred revenue balance for the six months endedJune 30, 2017 is primarily driven by cash payments received or due in advance of satisfying our performance obligations, offset by $637 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2016.

Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer.

Practical Expedients and Exemptions

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses.

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

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Financial Instruments

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Financial Instruments

Financial Instruments

We classify our cash equivalents and marketable securities within Level 1 or Level 2 in the fair value hierarchy because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. We classify our foreign currency and interest rate derivative contracts primarily within Level 2 in the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.

Cash, Cash Equivalents, and Marketable Securities

The following tables summarize our cash, cash equivalents, and marketable securities by significant investment categories as of December 31, 2016 and June 30, 2017 (in millions):

	As of December 31, 2016
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	7,078	$	0	$	0		$	7,078	$	7,078	$	0
Level 1:
Money market and other funds	4,783		0		0			4,783		4,783		0
U.S. government notes	38,454		46		(215		)	38,285		613		37,672
Marketable equity securities	160		133		0			293		0		293
	43,397		179		(215		)	43,361		5,396		37,965
Level 2:
Time deposits(1)	142		0		0			142		140		2
Mutual funds(2)	204		7		0			211		0		211
U.S. government agencies	1,826		0		(11		)	1,815		300		1,515
Foreign government bonds	2,345		18		(7		)	2,356		0		2,356
Municipal securities	4,757		15		(65		)	4,707		2		4,705
Corporate debt securities	12,993		114		(116		)	12,991		2		12,989
Agency mortgage-backed securities	12,006		26		(216		)	11,816		0		11,816
Asset-backed securities	1,855		2		(1		)	1,856		0		1,856
	36,128		182		(416		)	35,894		444		35,450
Total	$	86,603	$	361	$	(631	)	$	86,333	$	12,918	$	73,415

	As of June 30, 2017
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
	(unaudited)
Cash	$	7,385	$	0	$	0		$	7,385	$	7,385	$	0
Level 1:
Money market and other funds	2,781		0		0			2,781		2,781		0
U.S. government notes	49,502		14		(176		)	49,340		4,502		44,838
Marketable equity securities	226		121		0			347		0		347
	52,509		135		(176		)	52,468		7,283		45,185
Level 2:
Time deposits(1)	108		0		0			108		106		2
Mutual funds(2)	232		13		0			245		0		245
U.S. government agencies	2,540		0		(6		)	2,534		799		1,735
Foreign government bonds	2,422		10		(11		)	2,421		0		2,421
Municipal securities	5,856		14		(10		)	5,860		8		5,852
Corporate debt securities	12,608		48		(22		)	12,634		130		12,504
Agency mortgage-backed securities	7,695		14		(133		)	7,576		0		7,576
Asset-backed securities	3,479		5		(2		)	3,482		0		3,482
	34,940		104		(184		)	34,860		1,043		33,817
Total	$	94,834	$	239	$	(360	)	$	94,713	$	15,711	$	79,002

⁽¹⁾  The majority of our time deposits are foreign deposits.

⁽²⁾  The fair value option was elected for mutual funds with gains (losses) recognized in other income (expense), net.

We determine realized gains or losses on the sale of marketable securities on a specific identification method. We recognized gross realized gains of $91 million and $24 million for the three months ended June 30, 2016 and 2017, respectively, and $159 million and $172 million for the six months ended June 30, 2016 and 2017, respectively. We recognized gross realized losses of $100 million and $39 million for the three months ended June 30, 2016 and 2017, respectively, and $335 million and $209 million for the six months ended June 30, 2016 and 2017, respectively. We reflect these gains and losses as a component of other income (expense), net, in the accompanying Consolidated Statements of Income.

The following table summarizes the estimated fair value of our investments in marketable debt securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities (in millions, unaudited):

	As of June 30, 2017
Due in 1 year	$	29,827
Due in 1 year through 5 years	38,652
Due in 5 years through 10 years	1,281
Due after 10 years	8,650
Total	$	78,410

Impairment Considerations for Marketable Investments

The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2016 and June 30, 2017, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

	As of December 31, 2016
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	26,411	$	(215	)	$	0	$	0		$	26,411	$	(215	)
U.S. government agencies	1,014		(11		)	0		0			1,014		(11		)
Foreign government bonds	956		(7		)	0		0			956		(7		)
Municipal securities	3,461		(63		)	46		(2		)	3,507		(65		)
Corporate debt securities	6,184		(111		)	166		(5		)	6,350		(116		)
Agency mortgage-backed securities	10,184		(206		)	259		(10		)	10,443		(216		)
Asset-backed securities	391		(1		)	0		0			391		(1		)
Total	$	48,601	$	(614	)	$	471	$	(17	)	$	49,072	$	(631	)

	As of June 30, 2017
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(unaudited)
U.S. government notes	$	37,169	$	(174	)	$	508	$	(2	)	$	37,677	$	(176	)
U.S. government agencies	1,608		(6		)	0		0			1,608		(6		)
Foreign government bonds	1,448		(11		)	0		0			1,448		(11		)
Municipal securities	2,088		(8		)	54		(2		)	2,142		(10		)
Corporate debt securities	5,157		(21		)	77		(1		)	5,234		(22		)
Agency mortgage-backed securities	6,623		(123		)	267		(10		)	6,890		(133		)
Asset-backed securities	1,232		(2		)	0		0			1,232		(2		)
Total	$	55,325	$	(345	)	$	906	$	(15	)	$	56,231	$	(360	)

During the three months ended June 30, 2016 and the three and six months ended June 30, 2017, we did not recognize any other-than-temporary impairment losses. During the six months ended June 30, 2016, we recognized $87 million of other-than-temporary impairment losses related to our marketable equity securities. Those losses are included in loss on marketable securities, net, as a component of other income (expense), net, in the accompanying Consolidated Statements of Income. See Note 6 for further details on other income (expense), net.

Derivative Financial Instruments

We recognize derivative instruments as either assets or liabilities in the accompanying Consolidated Balance Sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the derivatives in the accompanying Consolidated Statements of Income as other income (expense), net, revenues, or accumulated other comprehensive income (AOCI) in the accompanying Consolidated Balance Sheets, as discussed below.

We enter into foreign currency contracts with financial institutions to reduce the risk that our cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. We use certain interest rate derivative contracts to hedge interest rate exposures on our fixed income securities and debt issuances. Our program is not used for trading or speculative purposes.

We enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. To further reduce credit risk, we enter into collateral security arrangements under which the counterparty is required to provide collateral when the net fair value of certain financial instruments fluctuates from contractually established thresholds. We can take possession of the collateral in the event of counterparty default. As of December 31, 2016 and June 30, 2017, we received cash collateral related to the derivative instruments under our collateral security arrangements of $362 million and $54 million, respectively.

Cash Flow Hedges

We use foreign currency forwards and option contracts, including collars (an option strategy comprised of a combination of purchased and written options), designated as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the U.S. dollar and at times we use interest rate swaps to effectively lock interest rates on anticipated debt issuances. These transactions are designated as cash flow hedges. The notional principal of these contracts was approximately $10.7 billion and $11.0 billion as of December 31, 2016 and June 30, 2017, respectively. These contracts have maturities of 24 months or less.

We reflect gain or loss on the effective portion of a cash flow hedge as a component of AOCI and subsequently reclassify cumulative gains and losses to revenues or interest expense when the hedged transactions are recorded. If the hedged transactions become probable of not occurring, the corresponding amounts in AOCI are immediately reclassified to other income (expense), net.For foreign currency collars, we include the change in time value in our assessment of hedge effectiveness.For forwards and all other option contracts, we exclude the change in the forward points and time value from our assessment of hedge effectiveness. We recognize changes of the excluded components in other income (expense), net.

As of June 30, 2017, the effective portion of our cash flow hedges before tax effect was a net accumulated loss of $306 million, of which a net loss of $339 million is expected to be reclassified from AOCI into earnings within the next 12 months.

Fair Value Hedges

We use forward contracts designated as fair value hedges to hedge foreign currency risks for our investments denominated in currencies other than the U.S. dollar. We exclude changes in forward points for the forward contracts from the assessment of hedge effectiveness. The notional principal of these contracts was $2.4 billion as of December 31, 2016 and June 30, 2017.

Gains and losses on these forward contracts are recognized in other income (expense), net, along with the offsetting gains and losses of the related hedged items.

Other Derivatives

Other derivatives not designated as hedging instruments consist of foreign currency forward contracts that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the local currency of a subsidiary. We recognize gains and losses on these contracts, as well as the related costs in other income (expense), net, along with the foreign currency gains and losses on monetary assets and liabilities. The notional principal of the outstanding foreign exchange contracts was $7.9 billion and $7.5 billion as of December 31, 2016 and June 30, 2017, respectively.

The fair values of our outstanding derivative instruments were as follows (in millions):

		As of December 31, 2016
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	539	$	57	$	596
Total		$	539	$	57	$	596
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	4	$	9	$	13
Total		$	4	$	9	$	13

		As of June 30, 2017
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
		(unaudited)
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	35	$	23	$	58
Total		$	35	$	23	$	58
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	365	$	36	$	401
Total		$	365	$	36	$	401

The effect of derivative instruments in cash flow hedging relationships on income and other comprehensive income (OCI) is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)
	Three Months Ended					Six Months Ended
	June 30,					June 30,
Derivatives in Cash Flow Hedging Relationship	2016		2017			2016		2017
Foreign exchange contracts	$	155	$	(374	)	$	188	$	(687	)

	Gains (Losses) Reclassified from AOCI into Income (Effective Portion)
		Three Months Ended				Six Months Ended
		June 30,				June 30,
Derivatives in Cash Flow Hedging Relationship	Location	2016		2017		2016		2017
Foreign exchange contracts	Revenues	$	78	$	3	$	247	$	220
Interest rate contracts	Other income (expense), net	2		2		3		3
Total		$	80	$	5	$	250	$	223

	Gains (Losses) Recognized in Income on Derivatives (Amount Excluded from  Effectiveness Testing and Ineffective Portion) (1)
		Three Months Ended					Six Months Ended
		June 30,					June 30,
Derivatives in Cash Flow Hedging Relationship	Location	2016			2017		2016			2017
Foreign exchange contracts	Other income (expense), net	$	(120	)	$	20	$	(259	)	$	46

⁽¹⁾  Gains (losses) related to the ineffective portion of the hedges were not material in all periods presented.

The effect of derivative instruments in fair value hedging relationships on income is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in Income on Derivatives(2)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives in Fair Value Hedging Relationship	Location	2016			2017			2016			2017
Foreign Exchange Hedges:
Foreign exchange contracts	Other income (expense), net	$	53		$	(80	)	$	25		$	(127	)
Hedged item	Other income (expense), net	(53		)	85			(25		)	136
Total		$	0		$	5		$	0		$	9

⁽²⁾  Amounts excluded from effectiveness testing and the ineffective portion of the fair value hedging relationships were not material in all periods presented.

The effect of derivative instruments not designated as hedging instruments on income is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in Income on Derivatives
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives Not Designated As Hedging Instruments	Location	2016			2017			2016			2017
Foreign exchange contracts	Other income (expense), net	$	(6	)	$	(22	)	$	(80	)	$	(224	)

Offsetting of Derivatives

We present our forwards and purchased options at gross fair values in the Consolidated Balance Sheets. For foreign currency collars, we present at net fair values where both purchased and written options are with the same counterparty. Our master netting and other similar arrangements allow net settlements under certain conditions. As of December 31, 2016 and June 30, 2017, information related to these offsetting arrangements were as follows (in millions):

Offsetting of Assets

	As of December 31, 2016
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	596	$	0		$	596	$	(11	)	(1)	$	(337	)	$	(73	)	$	175
	As of June 30, 2017
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
	(unaudited)
Derivatives	$	66	$	(8	)	$	58	$	(26	)	(1)	$	(18	)	$	(1	)	$	13

⁽¹⁾  The balances as of December 31, 2016 and June 30, 2017 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

Offsetting of Liabilities

	As of December 31, 2016
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged		Non-Cash Collateral Pledged		Net Liabilities
Derivatives	$	13	$	0		$	13	$	(11	)	(2)	$	0	$	0	$	2
	As of June 30, 2017
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged		Non-Cash Collateral Pledged		Net Liabilities
	(unaudited)
Derivatives	$	409	$	(8	)	$	401	$	(26	)	(2)	$	0	$	0	$	375

⁽²⁾  The balances as of December 31, 2016 and June 30, 2017 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

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Non-Marketable Investments

6 Months Ended

Jun. 30, 2017

Investments, All Other Investments [Abstract]

Non-Marketable Investments

Non-Marketable Investments

Our non-marketable investments include non-marketable equity investments and non-marketable debt securities.

Non-Marketable Equity Investments

Our non-marketable equity investments are investments we have made in privately-held companies accounted for under the equity or cost method and are not required to be consolidated under the variable interest or voting models. As of December 31, 2016 and June 30, 2017, investments accounted for under the equity method had a carrying value of approximately $1.7 billion and $1.8 billion, respectively. Our share of gains and losses in equity method investments including impairment was a net loss of approximately $43 million and $13 million for the three months ended June 30, 2016 and 2017, respectively, and a net loss of $148 million and $62 million for the six months ended June 30, 2016 and 2017, respectively. As of December 31, 2016 and June 30, 2017, investments accounted for under the cost method had a carrying value of $3.0 billion and $3.5 billion, respectively, and a fair value of approximately $8.1 billion and $8.6 billion, respectively. The fair value of the cost method investments are primarily determined from data leveraging private-market transactions and are classified within Level 3 in the fair value hierarchy. We reflect our share of equity method investee earnings and losses and impairments of non-marketable equity investments as a component of other income (expense), net, in the accompanying Consolidated Statements of Income.

Certain renewable energy investments included in our non-marketable equity investments accounted for under the equity method are variable interest entities (VIE). These entities' activities involve power generation using renewable sources. We have determined that the governance structures of these entities do not allow us to direct the activities that would significantly impact the VIE's economic performance such as setting operating budgets. Therefore, we do not consolidate these VIEs in our financial statements. The carrying value and maximum exposure of these VIEs were $1.2 billion as of December 31, 2016 and June 30, 2017. The maximum exposure is based on current investments to date.  We have determined the single source of our exposure to these VIEs is our capital investment in these entities. We periodically reassess whether we are the primary beneficiary of a VIE. The reassessment process considers whether we have acquired the power to direct the most significant activities of the VIE through changes in governing documents or other circumstances. We also reconsider whether entities previously determined not to be VIEs have become VIEs, and vice versa, based on changes in facts and circumstances including changes in contractual arrangements and capital structure.

Non-Marketable Debt Securities

Our non-marketable debt securities are primarily preferred stock that are redeemable at our option and convertible notes issued by private companies. The cost of these securities were $1.1 billion as of December 31, 2016 and June 30, 2017. These debt securities do not have readily determinable market values and are categorized accordingly as Level 3 in the fair value hierarchy. To estimate the fair value of these securities, we use a combination of valuation methodologies, including market and income approaches based on prior transaction prices; estimated timing, probability, and amount of cash flows; and illiquidity considerations. Financial information of private companies may not be available and consequently we will estimate the value based on the best available information at the measurement date. No significant impairments were recognized for the three and six months ended June 30, 2016 and 2017.

The following table presents a reconciliation for our non-marketable debt securities measured and recorded at fair value on a recurring basis, using significant unobservable inputs (Level 3) (in millions, unaudited):

	Six Months Ended
	June 30,
	2016			2017
Beginning balance	$	1,024		$	1,165
Total net gains (losses)
Included in earnings	0			(5		)
Included in other comprehensive income	90			126
Purchases	76			70
Sales	(6		)	(1		)
Settlements	(14		)	(3		)
Ending balance	$	1,170		$	1,352

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Debt

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Debt

Debt

Short-Term Debt

We have a debt financing program of up to $5.0 billion through the issuance of commercial paper. Net proceeds from this program are used for general corporate purposes. We had no commercial paper outstanding as of December 31, 2016 and June 30, 2017.

Long-Term Debt

Google issued $3.0 billion of senior unsecured notes in three tranches (collectively, 2011 Notes) in May 2011, due in 2014, 2016, and 2021, as well as $1.0 billion of senior unsecured notes (2014 Notes) in February 2014 due 2024.

In April 2016, we completed an exchange offer with eligible holders of Google’s 2011 Notes due 2021 and 2014 Notes due 2024 (collectively, the Google Notes). An aggregate principal amount of approximately $1.7 billion of the Google Notes was exchanged for approximately $1.7 billion of Alphabet notes with identical interest rate and maturity. Because the exchange was between a parent and the subsidiary company and for substantially identical notes, the change was treated as a debt modification for accounting purposes with no gain or loss recognized.

In August 2016, Alphabet issued $2.0 billion of senior unsecured notes (2016 Notes) due 2026. The net proceeds from the issuance of the 2016 Notes were used for general corporate purposes, including the repayment of outstanding commercial paper. The Alphabet notes due in 2021, 2024, and 2026 rank equally with each other and are structurally subordinated to the outstanding Google Notes.

The total outstanding long-term debt is summarized below (in millions):

	As of December 31, 2016			As of June 30, 2017
				(unaudited)
Long-term debt
3.625% Notes due on May 19, 2021	$	1,000		$	1,000
3.375% Notes due on February 25, 2024	1,000			1,000
1.998% Notes due on August 15, 2026	2,000			2,000
Unamortized discount for the Notes above	(65		)	(61		)
Subtotal(1)	$	3,935		$	3,939
Capital lease obligation	0			16
Total long-term debt	$	3,935		$	3,955

⁽¹⁾  Includes the outstanding (and unexchanged) Google Notes issued in 2011 and 2014 and the Alphabet notes exchanged in 2016.

The effective interest yields based on proceeds received from the outstanding notes due in 2021, 2024, and 2026 were 3.734%, 3.377%, and 2.231%, respectively, with interest payable semi-annually. We may redeem these notes at any time in whole or in part at specified redemption prices. The total estimated fair value of all outstanding notes was approximately $3.9 billion as of December 31, 2016 and $4.0 billion as of June 30, 2017. The fair value was determined based on observable market prices of identical instruments in less active markets and is categorized accordingly as Level 2 in the fair value hierarchy.

The effective rate of the capital lease obligation approximates the market rate. The estimated fair value of the capital lease obligation approximated its carrying value as of June 30, 2017.

Credit Facility

We have a $4.0 billion revolving credit facility which expires in February 2021. The interest rate for the credit facility is determined based on a formula using certain market rates. No amounts were outstanding under the credit facility as of December 31, 2016 and June 30, 2017.

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Supplemental Financial Statement Information

6 Months Ended

Jun. 30, 2017

Balance Sheet Components Disclosure [Abstract]

Supplemental Financial Statement Information

Supplemental Financial Statement Information

Property and Equipment, Net

Property and equipment, net, consisted of the following (in millions):

	As of December 31, 2016			As of June 30, 2017
				(unaudited)
Land and buildings	$	19,804		$	21,508
Information technology assets	16,084			18,529
Construction in progress	8,166			9,221
Leasehold improvements	3,415			4,035
Furniture and fixtures	58			48
Property and equipment, gross	47,527			53,341
Less: accumulated depreciation and amortization	(13,293		)	(15,665		)
Property and equipment, net	$	34,234		$	37,676

As of June 30, 2017, assets under capital lease with a cost basis of $350 million were included in property and equipment.

Note Receivable

In connection with the sale of our Motorola Mobile business to Lenovo Group Limited (Lenovo) on October 29, 2014, we received an interest-free, three-year prepayable promissory note (Note Receivable) due October 2017. The Note Receivable was included on our Consolidated Balance Sheets in prepaid revenue share, expenses, and other assets. Based on the general market conditions and the credit quality of Lenovo at the time of the sale, we discounted the Note Receivable at an effective interest rate of 4.5%. The Note Receivable was fully repaid as of June 30, 2017. The outstanding balances are shown in the table below (in millions):

	As of December 31, 2016			As of June 30, 2017
				(unaudited)
Principal of the Note Receivable	$	1,448		$	0
Less: unamortized discount for the Note Receivable	(51		)	0
Total	$	1,397		$	0

As of December 31, 2016, we did not recognize a valuation allowance on the Note Receivable.

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in millions):

	As of December 31, 2016		As of June 30, 2017
			(unaudited)
European Commission fine(1)	$	0	$	2,755
Accrued customer liabilities	1,256		1,131
Other accrued expenses and current liabilities	4,888		4,674
Accrued expenses and other current liabilities	$	6,144	$	8,560

⁽¹⁾  Includes the effects of foreign exchange.

Accumulated Other Comprehensive Income (Loss)

The components of AOCI, net of tax, were as follows (in millions, unaudited):

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains (Losses) on Cash Flow Hedges			Total
Balance as of December 31, 2015	$	(2,047	)	$	(86	)	$	259		$	(1,874	)
Other comprehensive income (loss) before reclassifications	37			556			116			709
Amounts reclassified from AOCI	0			183			(169		)	14
Other comprehensive income (loss)	37			739			(53		)	723
Balance as of June 30, 2016	$	(2,010	)	$	653		$	206		$	(1,151	)

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains (Losses) on Cash Flow Hedges			Total
Balance as of December 31, 2016	$	(2,646	)	$	(179	)	$	423		$	(2,402	)
Other comprehensive income (loss) before reclassifications	1,016			225			(459		)	782
Amounts reclassified from AOCI	0			51			(159		)	(108		)
Other comprehensive income (loss)	1,016			276			(618		)	674
Balance as of June 30, 2017	$	(1,630	)	$	97		$	(195	)	$	(1,728	)

The effects on net income of amounts reclassified from AOCI were as follows (in millions, unaudited):

		Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income
		Three Months Ended						Six Months Ended
		June 30,						June 30,
AOCI Components	Location	2016			2017			2016			2017
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	(14	)	$	(26	)	$	(183	)	$	(51	)
	Provision for income taxes	0			0			0			0
	Net of tax	$	(14	)	$	(26	)	$	(183	)	$	(51	)
Unrealized gains (losses) on cash flow hedges
Foreign exchange contracts	Revenue	$	78		$	3		$	247		$	220
Interest rate contracts	Other income (expense), net	2			2			3			3
	Benefit (provision) for income taxes	(28		)	1			(81		)	(64		)
	Net of tax	$	52		$	6		$	169		$	159
Total amount reclassified, net of tax		$	38		$	(20	)	$	(14	)	$	108

Other Income (Expense), Net

The components of other income (expense), net, were as follows (in millions, unaudited):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Interest income	$	307		$	294		$	577		$	606
Interest expense	(32		)	(21		)	(62		)	(46		)
Foreign currency exchange losses, net	(128		)	(46		)	(314		)	(48		)
Loss on marketable securities, net	(9		)	(15		)	(176		)	(37		)
Loss on non-marketable investments, net	(5		)	(1		)	(118		)	(47		)
Other	18			34			31			68
Other income (expense), net	$	151		$	245		$	(62	)	$	496

Interest expense in the preceding table is net of interest capitalized of $0 million and $12 million for the three months ended June 30, 2016 and 2017, respectively, and $0 million and $19 million for the six months ended June 30, 2016 and 2017, respectively.

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Acquisitions

6 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

Acquisitions

Acquisitions

During the six months ended June 30, 2017, we completed various acquisitions and purchases of intangible assets for total consideration of approximately $163 million. In aggregate, $10 million was cash acquired, $59 million was attributed to intangible assets, $106 million was attributed to goodwill, and $12 million was attributed to net liabilities assumed. These acquisitions generally enhance the breadth and depth of our offerings and expand our expertise in engineering and other functional areas. The amount of goodwill expected to be deductible for tax purposes is approximately $21 million.

Pro forma results of operations for these acquisitions have not been presented because they are not material to the consolidated results of operations, either individually or in aggregate.

For all intangible assets acquired and purchased during the six months ended June 30, 2017, patents and developed technology have a weighted-average useful life of 4.0 years, customer relationships have a weighted-average useful life of 4.0 years, and trade names and other have a weighted-average useful life of 8.8 years.

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Calico

6 Months Ended

Jun. 30, 2017

Research and Development [Abstract]

Calico

Calico

In September 2013, we announced the formation of Calico, a life science company with a mission to harness advanced technologies to increase our understanding of the biology that controls lifespan. As of June 30, 2017, we have contributed $240 million to Calico in exchange for Calico convertible preferred units and are committed to fund an additional $490 million on an as-needed basis.

Calico is a VIE and its results of operations and statement of financial position are included in our consolidated financial statements as we have the power to direct the activities that most significantly impact its economic performance.

In September 2014, AbbVie Inc. (AbbVie) and Calico announced a research and development collaboration agreement intended to help both companies discover, develop, and bring to market new therapies for patients with age-related diseases, including neurodegeneration and cancer. As of June 30, 2017, AbbVie has contributed $750 million to fund the collaboration pursuant to the agreement, which reflects its total commitment. As of June 30, 2017, Calico has contributed $250 million and committed up to an additional $500 million.

Calico has used its scientific expertise to establish a world-class research and development facility, with a focus on drug discovery and early drug development; and AbbVie provides scientific and clinical development support and its commercial expertise to bring new discoveries to market. Both companies share costs and profits equally. AbbVie's contribution has been recorded as a liability on Calico's financial statements, which is reduced and reflected as a reduction to research and development expense as eligible research and development costs are incurred by Calico over the next few years.

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Verily

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Verily

Verily

Verily is a life science company with a mission to make the world's health data useful so that people enjoy healthier lives. Verily is a VIE and its results of operations and statement of financial position are included in our consolidated financial statements as we have the power to direct the activities that most significantly impact its economic performance.

In January 2017, Temasek, a Singapore-based investment company, signed a binding commitment to purchase a noncontrolling interest in Verily for an aggregate of $800 million in cash. In the first quarter of 2017, the first tranche of the investment closed and we received $480 million. The transaction is accounted for as an equity transaction and no gain or loss was recognized. Of the $480 million received, $15 million was recorded as noncontrolling interest, based on Temasek’s share of the net assets of Verily, and $465 million was recorded as additional paid-in capital. Noncontrolling interest and net loss attributable to noncontrolling interest were not separately presented on our consolidated financial statements as of and for the quarter ended June 30, 2017 as the amounts were not material.

The second and final tranche of the investment closed in July 2017 and we received the remaining $320 million upon close.

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill allocated to our disclosed segments for the six months ended June 30, 2017 were as follows (in millions, unaudited):

	Google		Other Bets		Total Consolidated
Balance as of December 31, 2016	$	16,027	$	441	$	16,468
Acquisitions	98		8		106
Foreign currency translation and other adjustments	30		0		30
Balance as of June 30, 2017	$	16,155	$	449	$	16,604

Other Intangible Assets

Information regarding purchased intangible assets were as follows (in millions):

	As of December 31, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents and developed technology	$	5,542	$	2,710	$	2,832
Customer relationships	352		197		155
Trade names and other	463		143		320
Total	$	6,357	$	3,050	$	3,307
	As of June 30, 2017
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(unaudited)
Patents and developed technology	$	5,330	$	2,818	$	2,512
Customer relationships	369		241		128
Trade names and other	457		164		293
Total	$	6,156	$	3,223	$	2,933

Amortization expense relating to purchased intangible assets was $210 million and $200 million for the three months ended June 30, 2016 and 2017, respectively, and $426 million and $406 million for the six months ended June 30, 2016 and 2017, respectively.

As of June 30, 2017, expected amortization expense relating to purchased intangible assets for each of the next five years and thereafter are as follows (in millions, unaudited):

Remainder of 2017	$	384
2018	715
2019	604
2020	488
2021	456
Thereafter	286
	$	2,933

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Contingencies

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

Legal Matters

Antitrust Investigations

On November 30, 2010, the European Commission's (EC) Directorate General for Competition opened an investigation into various antitrust-related complaints against us.

On April 15, 2015, the EC issued a Statement of Objections (SO) regarding the display and ranking of shopping search results and ads, to which we responded on August 27, 2015. On July 14, 2016, the EC issued a Supplementary SO regarding shopping search results and ads. On June 27, 2017, the EC announced its decision that certain actions taken by Google regarding its display and ranking of shopping search results and ads infringed European competition law. The EC decision imposes a €2.42 billion (approximately $2.74 billion) fine and directs the termination of the conduct at issue. We are in the process of reviewing the EC's decision in detail as we consider an appeal. We are also evaluating the impact of potential remedies we may implement to address the EC's findings. We accrued the fine in the second quarter of 2017, resulting in a charge of approximately $2.74 billion. The fine is included in accrued expenses and other current liabilities on our Consolidated Balance Sheet.

On April 20, 2016, the EC issued an SO regarding certain Android distribution practices. On July 14, 2016, the EC issued an SO regarding the syndication of AdSense for Search. We responded to the SOs and continue to respond to the EC's informational requests. There is significant uncertainty as to the outcomes of these investigations; however, adverse decisions could result in fines and directives to alter or terminate certain conduct. Given the nature of these cases, we are unable to estimate the reasonably possible loss or ranges of loss, if any. We remain committed to working with the EC to resolve these matters.

The Comision Nacional de Defensa de la Competencia in Argentina, the Competition Commission of India (CCI), Brazil's Council for Economic Defense (CADE), and the Korean Fair Trade Commission have also opened investigations into certain of our business practices. In November 2016, we responded to the CCI Director General's report with interim findings of competition law infringements regarding search and ads.

Patent and Intellectual Property Claims

We have had patent, copyright, and trademark infringement lawsuits filed against us claiming that certain of our products, services, and technologies infringe the intellectual property rights of others. Adverse results in these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing us from offering certain features, functionalities, products, or services, and may also cause us to change our business practices, and require development of non-infringing products or technologies, which could result in a loss of revenues for us and otherwise harm our business. In addition, the U.S. International Trade Commission (ITC) has increasingly become an important forum to litigate intellectual property disputes because an ultimate loss for a company or its suppliers in an ITC action could result in a prohibition on importing infringing products into the U.S. Because the U.S. is an important market, a prohibition on importation could have an adverse effect on us, including preventing us from importing many important products into the U.S. or necessitating workarounds that may limit certain features of our products.

Furthermore, many of our agreements with our customers and partners require us to indemnify them for certain intellectual property infringement claims against them, which would increase our costs as a result of defending such claims, and may require that we pay significant damages if there were an adverse ruling in any such claims. Our customers and partners may discontinue the use of our products, services, and technologies, as a result of injunctions or otherwise, which could result in loss of revenues and adversely impact our business.

Oracle America, Inc. (Oracle) brought a copyright lawsuit against Google in the Northern District of California, alleging that Google's Android infringes Oracle's copyrights related to certain Java application programming interfaces. After trial, final judgment was entered by the district court in favor of Google on June 8, 2016, and the court decided post-trial motions in favor of Google. Oracle has appealed. We believe this lawsuit is without merit and are defending ourselves vigorously. Given the nature of this case, we are unable to estimate the reasonably possible loss or range of loss, if any, arising from this matter.

Other

We are also regularly subject to claims, suits, regulatory and government investigations, and other proceedings involving competition (such as the pending EC investigations described above), intellectual property, privacy, tax, labor and employment, commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, personal injury, consumer protection, and other matters. Such claims, suits, regulatory and government investigations, and other proceedings could result in fines, civil or criminal penalties, or other adverse consequences.

Certain of our outstanding legal matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. We evaluate, on a monthly basis, developments in our legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters.

With respect to our outstanding legal matters, based on our current knowledge, we believe that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties.

We expense legal fees in the period in which they are incurred.

Indirect Taxes and Other Non-Income Taxes

We are under audit by various domestic and foreign tax authorities with regards to indirect tax and other non-income tax matters. The subject matter of indirect tax and other non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied to the sale of our products and services in these jurisdictions and the tax treatment of certain employee benefits. We accrue indirect taxes and other non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. We believe these matters are without merit and we are defending ourselves vigorously. Due to the inherent complexity and uncertainty of these matters and judicial process in certain jurisdictions, the final outcome may be materially different from our expectations.

For information regarding income tax contingencies, see Note 14.

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Net Income Per Share

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Net Income Per Share

Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share of Class A and Class B common stock and Class C capital stock (in millions, except share amounts which are reflected in thousands, and per share amounts, unaudited):

	Three Months Ended June 30,
	2016								2017
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	2,086		$	350		$	2,441	$	1,514		$	240		$	1,770
Denominator
Number of shares used in per share computation	293,564			49,228			343,427		297,288			47,133			347,538
Basic net income per share	$	7.11		$	7.11		$	7.11	$	5.09		$	5.09		$	5.09
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	2,086		$	350		$	2,441	$	1,514		$	240		$	1,770
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	350			0			0		240			0			0
Reallocation of undistributed earnings	(22		)	(6		)	22		(22		)	(4		)	22
Allocation of undistributed earnings	$	2,414		$	344		$	2,463	$	1,732		$	236		$	1,792
Denominator
Number of shares used in basic computation	293,564			49,228			343,427		297,288			47,133			347,538
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	49,228			0			0		47,133			0			0
Restricted stock units and other contingently issuable shares	2,201			0			8,427		1,258			0			10,286
Number of shares used in per share computation	344,993			49,228			351,854		345,679			47,133			357,824
Diluted net income per share	$	7.00		$	7.00		$	7.00	$	5.01		$	5.01		$	5.01

	Six Months Ended June 30,
	2016								2017
	(unaudited)
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	3,880		$	656		$	4,548	$	3,845		$	611		$	4,494
Denominator
Number of shares used in per share computation	293,415			49,584			343,870		297,210			47,234			347,313
Basic net income per share	$	13.23		$	13.23		$	13.23	$	12.94		$	12.94		$	12.94
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	3,880		$	656		$	4,548	$	3,845		$	611		$	4,494
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	656			0			0		611			0			0
Reallocation of undistributed earnings	(42		)	(11		)	42		(52		)	(9		)	52
Allocation of undistributed earnings	$	4,494		$	645		$	4,590	$	4,404		$	602		$	4,546
Denominator
Number of shares used in basic computation	293,415			49,584			343,870		297,210			47,234			347,313
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	49,584			0			0		47,234			0			0
Restricted stock units and other contingently issuable shares	2,355			0			8,856		1,342			0			9,671
Number of shares used in per share computation	345,354			49,584			352,726		345,786			47,234			356,984
Diluted net income per share	$	13.01		$	13.01		$	13.01	$	12.74		$	12.74		$	12.74

For the periods presented above, the net income per share amounts are the same for Class A and Class B common stock and Class C capital stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with the Amended and Restated Certificate of Incorporation of Alphabet Inc.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Stock-Based Compensation

For the three months ended June 30, 2016 and 2017, total stock-based compensation expense was $1,510 million and $2,062 million, respectively, including amounts associated with awards that we expect to settle in Alphabet stock of $1,503 million and $2,003 million, respectively. For the six months ended June 30, 2016 and 2017, total stock-based compensation expense was $3,010 million and $4,127 million, respectively, including amounts associated with awards that we expect to settle in Alphabet stock of $2,997 million and $4,012 million, respectively.

Stock-Based Award Activities

The following table summarizes the activities for our unvested restricted stock units (RSUs) for the six months ended June 30, 2017 (unaudited):

	Unvested Restricted Stock Units
	Number of Shares		Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2016	25,348,955		$	624.92
Granted	5,883,829		$	804.76
Vested	(6,426,955	)	$	595.93
Forfeited/canceled	(684,988	)	$	642.17
Unvested as of June 30, 2017	24,120,841		$	676.35

As of June 30, 2017, there was $14.8 billion of unrecognized compensation cost related to unvested employee RSUs. This amount is expected to be recognized over a weighted-average period of 2.6 years.

Share Repurchases

In October 2016, the board of directors of Alphabet authorized the company to repurchase up to $7,019,340,976.83 of its Class C capital stock. The repurchases are being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans. The repurchase program does not have an expiration date. In the six months ended June 30, 2017, we repurchased and subsequently retired 3.1 million shares of Alphabet Class C capital stock for an aggregate amount of $2.7 billion.

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Income Taxes

6 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. Our total gross unrecognized tax benefits were $5.4 billion and $5.0 billion as of December 31, 2016 and June 30, 2017, respectively. Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $4.3 billion and $3.8 billion as of December 31, 2016 and June 30, 2017, respectively.

Our effective tax rate is lower than the U.S. statutory rate primarily because of more earnings realized in countries that have lower statutory tax rates. Our effective tax rate in the future will depend on the portion of our profits earned within and outside the United States.

In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service (IRS) and other domestic and foreign tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. We continue to monitor the progress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner not consistent with management's expectations, we could be required to adjust the provision for income taxes in the period such resolution occurs.

We have received tax assessments in multiple foreign jurisdictions asserting transfer pricing adjustments or permanent establishment. We continue to defend against any and all such claims as presented. While we believe it is more likely than not that our tax position will be sustained, it is reasonably possible that we will have future obligations related to these matters.

For information regarding indirect taxes and other non-income taxes, see Note 11.

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Information about Segments and Geographic Areas

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Information about Segments and Geographic Areas

Information about Segments and Geographic Areas

We operate our business in multiple operating segments. Google is our only reportable segment. None of our other segments meet the quantitative thresholds to qualify as reportable segments; therefore, the other operating segments are combined and disclosed below as Other Bets.

Our reported segments are described below:

• Google – Google includes our main internet products such as Search, Ads, Commerce, Maps, YouTube, Google Cloud, Android, Chrome, and Google Play as well as our hardware initiatives. Our technical infrastructure and some newer efforts like virtual reality are also included in Google. Google generates revenues primarily from advertising; sales of apps, in-app purchases, and digital content; services fees for cloud offerings; and sales of hardware products.

• Other Bets – Other Bets is a combination of multiple operating segments that are not individually material. Other Bets includes businesses such as Access, Calico, CapitalG, GV, Nest, Verily, Waymo, and X. Revenues from the Other Bets are derived primarily through the sales of internet and TV services through Google Fiber, sales of Nest products and services, and licensing and R&D services through Verily.

Revenues, cost of revenues, and operating expenses are generally directly attributed to our segments. Inter-segment revenues are not presented separately, as these amounts are immaterial. Our Chief Operating Decision Maker does not evaluate operating segments using asset information. Prior period segment information has been recast to conform to the current period segment presentation.

Information about segments during the periods presented were as follows (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016		2017
Revenues:
Google	$	21,315	$	25,762	$	41,407	$	50,268
Other Bets	185		248		350		492
Total revenues	$	21,500	$	26,010	$	41,757	$	50,760

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Operating income (loss):
Google	$	6,990		$	7,803		$	13,235		$	15,401
Other Bets	(855		)	(772		)	(1,629		)	(1,627		)
Reconciling items(1)	(167		)	(2,899		)	(296		)	(3,074		)
Total income from operations	$	5,968		$	4,132		$	11,310		$	10,700

⁽¹⁾  Reconciling items are primarily comprised of the European Commission fine for the three and six months ended June 30, 2017, as well as corporate administrative costs and other miscellaneous items that are not allocated to individual segments.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Capital expenditures:
Google	$	2,056		$	2,835		$	4,095		$	5,241
Other Bets	280			151			557			321
Reconciling items(2)	(200		)	(155		)	(72		)	(223		)
Total capital expenditures as presented on the Consolidated Statements of Cash Flows	$	2,136		$	2,831		$	4,580		$	5,339

⁽²⁾  Reconciling items are related to timing differences of payments as segment capital expenditures are on accrual basis while total capital expenditures shown on the Consolidated Statements of Cash Flow are on cash basis and other miscellaneous differences.

Stock-based compensation (SBC) and depreciation, amortization, and impairment are included in segment operating income (loss) as shown below (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016		2017
Stock-based compensation:
Google	$	1,321	$	1,854	$	2,644	$	3,708
Other Bets	149		111		287		225
Reconciling items(3)	33		38		66		79
Total stock-based compensation(4)	$	1,503	$	2,003	$	2,997	$	4,012
Depreciation, amortization, and impairment:
Google	$	1,409	$	1,543	$	2,726	$	2,939
Other Bets	81		82		135		189
Total depreciation, amortization, and impairment as presented on the Consolidated Statements of Cash Flows	$	1,490	$	1,625	$	2,861	$	3,128

⁽³⁾  Reconciling items represent corporate administrative costs that are not allocated to individual segments.

⁽⁴⁾  For purposes of segment reporting, SBC represents awards that we expect to settle in Alphabet stock.

The following table presents our long-lived assets by geographic area (in millions):

	As of December 31, 2016		As of June 30, 2017
			(unaudited)
Long-lived assets:
United States	$	47,383	$	49,908
International	14,706		16,327
Total long-lived assets	$	62,089	$	66,235

For revenues by geography, see Note 2.

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Nature of Operations and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Nature of Operations

Nature of Operations

Google Inc. (Google) was incorporated in California in 1998 and re-incorporated in Delaware in 2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc. (Alphabet) became the successor issuer to Google. We generate revenues primarily by delivering relevant, cost-effective online advertising.

Basis of Consolidation

Basis of Consolidation

The consolidated financial statements of Alphabet include the accounts of Alphabet and all wholly-owned subsidiaries as well as all variable interest entities where we are the primary beneficiary. All intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

Unaudited Interim Financial Information

The accompanying Consolidated Balance Sheet as of June 30, 2017, the Consolidated Statements of Income for the three and six months ended June 30, 2016 and 2017, the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2016 and 2017, and the Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2017 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). In our opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of our financial position as of June 30, 2017, our results of operations for the three and six months ended June 30, 2016 and 2017, and our cash flows for the six months ended June 30, 2016 and 2017. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017.

These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on February 2, 2017.

Use of Estimates

Use of Estimates

Preparation of the consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable and sales allowances, fair values of financial instruments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, income taxes, and contingent liabilities, among others. We base our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Our financial assets and financial liabilities including cash equivalents, marketable securities, foreign currency and interest rate derivative contracts, and non-marketable debt securities are measured and recorded at fair value on a recurring basis. We measure certain financial assets at fair value for disclosure purposes, as well as on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. Our other current financial assets and our other current financial liabilities have fair values that approximate their carrying value.

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings.

Level 3 - Unobservable inputs that are supported by little or no market activities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-01 (ASU 2016-01) "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2017. The most significant impact to our consolidated financial statements relates to the recognition and measurement of equity investments at fair value in our consolidated statement of income. We expect to elect the measurement alternative, defined as cost, less impairments, adjusted by observable price changes. We anticipate that the adoption of ASU 2016-01 will increase the volatility of our other income (expense), net, as a result of the remeasurement of our equity securities upon the occurrence of observable price changes and impairments.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease recognition requirements in Accounting Standards Codification (ASC) Topic 840, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. Topic 842 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2018. Early adoption by public entities is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and there are certain optional practical expedients that an entity may elect to apply. Full retrospective application is prohibited. We anticipate that the adoption of Topic 842 will materially affect our Consolidated Balance Sheets. We are in the process of implementing changes to our systems and processes in conjunction with our review of existing lease agreements. We plan to adopt Topic 842 effective January 1, 2019 and we are evaluating the use of the optional practical expedients.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2019. We are currently in the process of evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04) “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019; early adoption is permitted. We currently anticipate that the adoption of ASU 2017-04 will not have a material impact on our consolidated financial statements.

Recently adopted accounting pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) "Revenue from Contracts with Customers." Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605), and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We adopted Topic 606 as of January 1, 2017 using the modified retrospective transition method. See Note 2 for further details.

In January 2017, the FASB issued Accounting Standards Update No. 2017-01 (ASU 2017-01) “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASU 2017-01 provides guidance to evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. If substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single asset or a group of similar assets, the assets acquired (or disposed of) are not considered a business. We adopted ASU 2017-01 as of January 1, 2017 on a prospective basis.

Prior Period Reclassifications

Prior Period Reclassifications

Certain amounts in prior periods have been reclassified to conform with current period presentation.

Revenue Recognition

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

Most of our customers pay us on a cost-per-click basis (CPC), which means that an advertiser pays us only when a user clicks on an ad on Google properties or Google Network Members' properties or views certain YouTube ad formats like TrueView. For these customers, we recognize revenue each time a user clicks on the ad or when a user views the ad for a specified period of time.

We also offer advertising on other bases such as cost-per-impression (CPM), which means an advertiser pays us based on the number of times their ads are displayed on Google properties or Google Network Members’ properties. For these customers, we recognize revenue each time an ad is displayed.

Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration.

For ads placed on Google Network Members’ properties, we evaluate whether we are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis). Generally, we report advertising revenues for ads placed on Google Network Members’ properties on a gross basis, that is, the amounts billed to our customers are recorded as revenues, and amounts paid to publishers are recorded as cost of revenues. We are the principal because we control the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to monetize the advertising inventory, being primarily responsible to our customers, having discretion in establishing pricing, or a combination of these.

Other Revenues

Google other revenues and Other Bets revenues consist primarily of revenues from:

• Apps, in-app purchases, and digital content in the Google Play store;

• Google Cloud offerings;

• Hardware; and

• Other miscellaneous products and services.

As it relates to Google other revenues, the most significant judgment is determining whether we are the principal or agent for app sales and in-app purchases through the Google Play store. We report revenues from these transactions on a net basis because our performance obligation is to facilitate a transaction between app developers and end users, for which we earn a commission. Consequently, the portion of the gross amount billed to end users that is remitted to app developers is not reflected as revenues.

Arrangements with Multiple Performance Obligations

Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost plus margin.

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Revenues (Tables)

6 Months Ended

Jun. 30, 2017

Revenue Recognition [Abstract]

Revenue by Segment

The following table presents our revenues disaggregated by revenue source (in millions, unaudited). Sales and usage-based taxes are excluded from revenues.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016(1)		2017		2016(1)		2017
Google properties	$	15,400	$	18,425	$	29,728	$	35,828
Google Network Members' properties	3,743		4,247		7,435		8,255
Google advertising revenues	19,143		22,672		37,163		44,083
Google other revenues	2,172		3,090		4,244		6,185
Other Bets revenues	185		248		350		492
Total revenues(2)	$	21,500	$	26,010	$	41,757	$	50,760

⁽¹⁾  As noted above, prior period amounts have not been adjusted under the modified retrospective method.

⁽²⁾  Revenues include hedging gains of $78 million and $3 million for the three months ended June 30, 2016 and 2017, respectively, and $247 million and $220 million for the six months endedJune 30, 2016 and 2017, respectively, which do not represent revenues recognized from contracts with customers.

Revenue by Geographic Location

The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016		2017
United States	$	10,035	$	12,322	$	19,416	$	24,091
EMEA(1)	7,485		8,545		14,615		16,636
APAC(1)	2,904		3,730		5,703		7,349
Other Americas(1)	1,076		1,413		2,023		2,684
Total revenues(2)	$	21,500	$	26,010	$	41,757	$	50,760

⁽¹⁾  Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific (APAC); and Canada and Latin America (Other Americas).

⁽²⁾  Revenues include hedging gains for the three and six months endedJune 30, 2016 and 2017.

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Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Schedule of cash and short-term investments

The following tables summarize our cash, cash equivalents, and marketable securities by significant investment categories as of December 31, 2016 and June 30, 2017 (in millions):

	As of December 31, 2016
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	7,078	$	0	$	0		$	7,078	$	7,078	$	0
Level 1:
Money market and other funds	4,783		0		0			4,783		4,783		0
U.S. government notes	38,454		46		(215		)	38,285		613		37,672
Marketable equity securities	160		133		0			293		0		293
	43,397		179		(215		)	43,361		5,396		37,965
Level 2:
Time deposits(1)	142		0		0			142		140		2
Mutual funds(2)	204		7		0			211		0		211
U.S. government agencies	1,826		0		(11		)	1,815		300		1,515
Foreign government bonds	2,345		18		(7		)	2,356		0		2,356
Municipal securities	4,757		15		(65		)	4,707		2		4,705
Corporate debt securities	12,993		114		(116		)	12,991		2		12,989
Agency mortgage-backed securities	12,006		26		(216		)	11,816		0		11,816
Asset-backed securities	1,855		2		(1		)	1,856		0		1,856
	36,128		182		(416		)	35,894		444		35,450
Total	$	86,603	$	361	$	(631	)	$	86,333	$	12,918	$	73,415

	As of June 30, 2017
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
	(unaudited)
Cash	$	7,385	$	0	$	0		$	7,385	$	7,385	$	0
Level 1:
Money market and other funds	2,781		0		0			2,781		2,781		0
U.S. government notes	49,502		14		(176		)	49,340		4,502		44,838
Marketable equity securities	226		121		0			347		0		347
	52,509		135		(176		)	52,468		7,283		45,185
Level 2:
Time deposits(1)	108		0		0			108		106		2
Mutual funds(2)	232		13		0			245		0		245
U.S. government agencies	2,540		0		(6		)	2,534		799		1,735
Foreign government bonds	2,422		10		(11		)	2,421		0		2,421
Municipal securities	5,856		14		(10		)	5,860		8		5,852
Corporate debt securities	12,608		48		(22		)	12,634		130		12,504
Agency mortgage-backed securities	7,695		14		(133		)	7,576		0		7,576
Asset-backed securities	3,479		5		(2		)	3,482		0		3,482
	34,940		104		(184		)	34,860		1,043		33,817
Total	$	94,834	$	239	$	(360	)	$	94,713	$	15,711	$	79,002

⁽¹⁾  The majority of our time deposits are foreign deposits.

⁽²⁾  The fair value option was elected for mutual funds with gains (losses) recognized in other income (expense), net.

Investments by maturity date

The following table summarizes the estimated fair value of our investments in marketable debt securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities (in millions, unaudited):

	As of June 30, 2017
Due in 1 year	$	29,827
Due in 1 year through 5 years	38,652
Due in 5 years through 10 years	1,281
Due after 10 years	8,650
Total	$	78,410

Schedule of unrealized loss on investments

The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2016 and June 30, 2017, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

	As of December 31, 2016
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	26,411	$	(215	)	$	0	$	0		$	26,411	$	(215	)
U.S. government agencies	1,014		(11		)	0		0			1,014		(11		)
Foreign government bonds	956		(7		)	0		0			956		(7		)
Municipal securities	3,461		(63		)	46		(2		)	3,507		(65		)
Corporate debt securities	6,184		(111		)	166		(5		)	6,350		(116		)
Agency mortgage-backed securities	10,184		(206		)	259		(10		)	10,443		(216		)
Asset-backed securities	391		(1		)	0		0			391		(1		)
Total	$	48,601	$	(614	)	$	471	$	(17	)	$	49,072	$	(631	)

	As of June 30, 2017
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(unaudited)
U.S. government notes	$	37,169	$	(174	)	$	508	$	(2	)	$	37,677	$	(176	)
U.S. government agencies	1,608		(6		)	0		0			1,608		(6		)
Foreign government bonds	1,448		(11		)	0		0			1,448		(11		)
Municipal securities	2,088		(8		)	54		(2		)	2,142		(10		)
Corporate debt securities	5,157		(21		)	77		(1		)	5,234		(22		)
Agency mortgage-backed securities	6,623		(123		)	267		(10		)	6,890		(133		)
Asset-backed securities	1,232		(2		)	0		0			1,232		(2		)
Total	$	55,325	$	(345	)	$	906	$	(15	)	$	56,231	$	(360	)

Schedule of derivative instruments

The fair values of our outstanding derivative instruments were as follows (in millions):

		As of December 31, 2016
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	539	$	57	$	596
Total		$	539	$	57	$	596
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	4	$	9	$	13
Total		$	4	$	9	$	13

		As of June 30, 2017
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
		(unaudited)
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	35	$	23	$	58
Total		$	35	$	23	$	58
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other liabilities, current and non-current	$	365	$	36	$	401
Total		$	365	$	36	$	401

Schedule of gain (loss) on derivative instruments

The effect of derivative instruments in cash flow hedging relationships on income and other comprehensive income (OCI) is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)
	Three Months Ended					Six Months Ended
	June 30,					June 30,
Derivatives in Cash Flow Hedging Relationship	2016		2017			2016		2017
Foreign exchange contracts	$	155	$	(374	)	$	188	$	(687	)

	Gains (Losses) Reclassified from AOCI into Income (Effective Portion)
		Three Months Ended				Six Months Ended
		June 30,				June 30,
Derivatives in Cash Flow Hedging Relationship	Location	2016		2017		2016		2017
Foreign exchange contracts	Revenues	$	78	$	3	$	247	$	220
Interest rate contracts	Other income (expense), net	2		2		3		3
Total		$	80	$	5	$	250	$	223

	Gains (Losses) Recognized in Income on Derivatives (Amount Excluded from  Effectiveness Testing and Ineffective Portion) (1)
		Three Months Ended					Six Months Ended
		June 30,					June 30,
Derivatives in Cash Flow Hedging Relationship	Location	2016			2017		2016			2017
Foreign exchange contracts	Other income (expense), net	$	(120	)	$	20	$	(259	)	$	46

⁽¹⁾  Gains (losses) related to the ineffective portion of the hedges were not material in all periods presented.

The effect of derivative instruments in fair value hedging relationships on income is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in Income on Derivatives(2)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives in Fair Value Hedging Relationship	Location	2016			2017			2016			2017
Foreign Exchange Hedges:
Foreign exchange contracts	Other income (expense), net	$	53		$	(80	)	$	25		$	(127	)
Hedged item	Other income (expense), net	(53		)	85			(25		)	136
Total		$	0		$	5		$	0		$	9

⁽²⁾  Amounts excluded from effectiveness testing and the ineffective portion of the fair value hedging relationships were not material in all periods presented.

The effect of derivative instruments not designated as hedging instruments on income is summarized below (in millions, unaudited):

	Gains (Losses) Recognized in Income on Derivatives
		Three Months Ended						Six Months Ended
		June 30,						June 30,
Derivatives Not Designated As Hedging Instruments	Location	2016			2017			2016			2017
Foreign exchange contracts	Other income (expense), net	$	(6	)	$	(22	)	$	(80	)	$	(224	)

Offsetting assets

As of December 31, 2016 and June 30, 2017, information related to these offsetting arrangements were as follows (in millions):

Offsetting of Assets

	As of December 31, 2016
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
Derivatives	$	596	$	0		$	596	$	(11	)	(1)	$	(337	)	$	(73	)	$	175
	As of June 30, 2017
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Received			Non-Cash Collateral Received			Net Assets Exposed
	(unaudited)
Derivatives	$	66	$	(8	)	$	58	$	(26	)	(1)	$	(18	)	$	(1	)	$	13

⁽¹⁾  The balances as of December 31, 2016 and June 30, 2017 were related to derivative liabilities which are allowed to be net settled against derivative assets in accordance with our master netting agreements.

Offsetting liabilities

Offsetting of Liabilities

	As of December 31, 2016
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged		Non-Cash Collateral Pledged		Net Liabilities
Derivatives	$	13	$	0		$	13	$	(11	)	(2)	$	0	$	0	$	2
	As of June 30, 2017
								Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Legal Rights to Offset
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets			Net Presented in the Consolidated Balance Sheets		Financial Instruments				Cash Collateral Pledged		Non-Cash Collateral Pledged		Net Liabilities
	(unaudited)
Derivatives	$	409	$	(8	)	$	401	$	(26	)	(2)	$	0	$	0	$	375

⁽²⁾  The balances as of December 31, 2016 and June 30, 2017 were related to derivative assets which are allowed to be net settled against derivative liabilities in accordance with our master netting agreements.

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Non-Marketable Investments (Tables)

6 Months Ended

Jun. 30, 2017

Investments, All Other Investments [Abstract]

Investment in other assets

The following table presents a reconciliation for our non-marketable debt securities measured and recorded at fair value on a recurring basis, using significant unobservable inputs (Level 3) (in millions, unaudited):

	Six Months Ended
	June 30,
	2016			2017
Beginning balance	$	1,024		$	1,165
Total net gains (losses)
Included in earnings	0			(5		)
Included in other comprehensive income	90			126
Purchases	76			70
Sales	(6		)	(1		)
Settlements	(14		)	(3		)
Ending balance	$	1,170		$	1,352

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Debt (Tables)

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The total outstanding long-term debt is summarized below (in millions):

	As of December 31, 2016			As of June 30, 2017
				(unaudited)
Long-term debt
3.625% Notes due on May 19, 2021	$	1,000		$	1,000
3.375% Notes due on February 25, 2024	1,000			1,000
1.998% Notes due on August 15, 2026	2,000			2,000
Unamortized discount for the Notes above	(65		)	(61		)
Subtotal(1)	$	3,935		$	3,939
Capital lease obligation	0			16
Total long-term debt	$	3,935		$	3,955

⁽¹⁾  Includes the outstanding (and unexchanged) Google Notes issued in 2011 and 2014 and the Alphabet notes exchanged in 2016.

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Supplemental Financial Statement Information (Tables)

6 Months Ended

Jun. 30, 2017

Balance Sheet Components Disclosure [Abstract]

Property and Equipment, Net

Property and equipment, net, consisted of the following (in millions):

	As of December 31, 2016			As of June 30, 2017
				(unaudited)
Land and buildings	$	19,804		$	21,508
Information technology assets	16,084			18,529
Construction in progress	8,166			9,221
Leasehold improvements	3,415			4,035
Furniture and fixtures	58			48
Property and equipment, gross	47,527			53,341
Less: accumulated depreciation and amortization	(13,293		)	(15,665		)
Property and equipment, net	$	34,234		$	37,676

Schedule of Notes Receivable

The outstanding balances are shown in the table below (in millions):

	As of December 31, 2016			As of June 30, 2017
				(unaudited)
Principal of the Note Receivable	$	1,448		$	0
Less: unamortized discount for the Note Receivable	(51		)	0
Total	$	1,397		$	0

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in millions):

	As of December 31, 2016		As of June 30, 2017
			(unaudited)
European Commission fine(1)	$	0	$	2,755
Accrued customer liabilities	1,256		1,131
Other accrued expenses and current liabilities	4,888		4,674
Accrued expenses and other current liabilities	$	6,144	$	8,560

⁽¹⁾  Includes the effects of foreign exchange.

Components of Accumulated Other Comprehensive Income

The components of AOCI, net of tax, were as follows (in millions, unaudited):

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains (Losses) on Cash Flow Hedges			Total
Balance as of December 31, 2015	$	(2,047	)	$	(86	)	$	259		$	(1,874	)
Other comprehensive income (loss) before reclassifications	37			556			116			709
Amounts reclassified from AOCI	0			183			(169		)	14
Other comprehensive income (loss)	37			739			(53		)	723
Balance as of June 30, 2016	$	(2,010	)	$	653		$	206		$	(1,151	)

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for-Sale Investments			Unrealized Gains (Losses) on Cash Flow Hedges			Total
Balance as of December 31, 2016	$	(2,646	)	$	(179	)	$	423		$	(2,402	)
Other comprehensive income (loss) before reclassifications	1,016			225			(459		)	782
Amounts reclassified from AOCI	0			51			(159		)	(108		)
Other comprehensive income (loss)	1,016			276			(618		)	674
Balance as of June 30, 2017	$	(1,630	)	$	97		$	(195	)	$	(1,728	)

Schedule of Effects on Net Income of Amounts Reclassified from AOCI

The effects on net income of amounts reclassified from AOCI were as follows (in millions, unaudited):

		Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income
		Three Months Ended						Six Months Ended
		June 30,						June 30,
AOCI Components	Location	2016			2017			2016			2017
Unrealized gains (losses) on available-for-sale investments
	Other income (expense), net	$	(14	)	$	(26	)	$	(183	)	$	(51	)
	Provision for income taxes	0			0			0			0
	Net of tax	$	(14	)	$	(26	)	$	(183	)	$	(51	)
Unrealized gains (losses) on cash flow hedges
Foreign exchange contracts	Revenue	$	78		$	3		$	247		$	220
Interest rate contracts	Other income (expense), net	2			2			3			3
	Benefit (provision) for income taxes	(28		)	1			(81		)	(64		)
	Net of tax	$	52		$	6		$	169		$	159
Total amount reclassified, net of tax		$	38		$	(20	)	$	(14	)	$	108

Schedule of Other Income (Expense), Net

The components of other income (expense), net, were as follows (in millions, unaudited):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Interest income	$	307		$	294		$	577		$	606
Interest expense	(32		)	(21		)	(62		)	(46		)
Foreign currency exchange losses, net	(128		)	(46		)	(314		)	(48		)
Loss on marketable securities, net	(9		)	(15		)	(176		)	(37		)
Loss on non-marketable investments, net	(5		)	(1		)	(118		)	(47		)
Other	18			34			31			68
Other income (expense), net	$	151		$	245		$	(62	)	$	496

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

The changes in the carrying amount of goodwill allocated to our disclosed segments for the six months ended June 30, 2017 were as follows (in millions, unaudited):

	Google		Other Bets		Total Consolidated
Balance as of December 31, 2016	$	16,027	$	441	$	16,468
Acquisitions	98		8		106
Foreign currency translation and other adjustments	30		0		30
Balance as of June 30, 2017	$	16,155	$	449	$	16,604

Schedule of finite-lived intangible assets

Information regarding purchased intangible assets were as follows (in millions):

	As of December 31, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents and developed technology	$	5,542	$	2,710	$	2,832
Customer relationships	352		197		155
Trade names and other	463		143		320
Total	$	6,357	$	3,050	$	3,307
	As of June 30, 2017
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(unaudited)
Patents and developed technology	$	5,330	$	2,818	$	2,512
Customer relationships	369		241		128
Trade names and other	457		164		293
Total	$	6,156	$	3,223	$	2,933

Schedule of future amortization expense

As of June 30, 2017, expected amortization expense relating to purchased intangible assets for each of the next five years and thereafter are as follows (in millions, unaudited):

Remainder of 2017	$	384
2018	715
2019	604
2020	488
2021	456
Thereafter	286
	$	2,933

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Net Income Per Share (Tables)

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Schedule of earnings per share

The following table sets forth the computation of basic and diluted net income per share of Class A and Class B common stock and Class C capital stock (in millions, except share amounts which are reflected in thousands, and per share amounts, unaudited):

	Three Months Ended June 30,
	2016								2017
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	2,086		$	350		$	2,441	$	1,514		$	240		$	1,770
Denominator
Number of shares used in per share computation	293,564			49,228			343,427		297,288			47,133			347,538
Basic net income per share	$	7.11		$	7.11		$	7.11	$	5.09		$	5.09		$	5.09
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	2,086		$	350		$	2,441	$	1,514		$	240		$	1,770
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	350			0			0		240			0			0
Reallocation of undistributed earnings	(22		)	(6		)	22		(22		)	(4		)	22
Allocation of undistributed earnings	$	2,414		$	344		$	2,463	$	1,732		$	236		$	1,792
Denominator
Number of shares used in basic computation	293,564			49,228			343,427		297,288			47,133			347,538
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	49,228			0			0		47,133			0			0
Restricted stock units and other contingently issuable shares	2,201			0			8,427		1,258			0			10,286
Number of shares used in per share computation	344,993			49,228			351,854		345,679			47,133			357,824
Diluted net income per share	$	7.00		$	7.00		$	7.00	$	5.01		$	5.01		$	5.01

	Six Months Ended June 30,
	2016								2017
	(unaudited)
	Class A			Class B			Class C		Class A			Class B			Class C
Basic net income per share:
Numerator
Allocation of undistributed earnings	$	3,880		$	656		$	4,548	$	3,845		$	611		$	4,494
Denominator
Number of shares used in per share computation	293,415			49,584			343,870		297,210			47,234			347,313
Basic net income per share	$	13.23		$	13.23		$	13.23	$	12.94		$	12.94		$	12.94
Diluted net income per share:
Numerator
Allocation of undistributed earnings for basic computation	$	3,880		$	656		$	4,548	$	3,845		$	611		$	4,494
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	656			0			0		611			0			0
Reallocation of undistributed earnings	(42		)	(11		)	42		(52		)	(9		)	52
Allocation of undistributed earnings	$	4,494		$	645		$	4,590	$	4,404		$	602		$	4,546
Denominator
Number of shares used in basic computation	293,415			49,584			343,870		297,210			47,234			347,313
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	49,584			0			0		47,234			0			0
Restricted stock units and other contingently issuable shares	2,355			0			8,856		1,342			0			9,671
Number of shares used in per share computation	345,354			49,584			352,726		345,786			47,234			356,984
Diluted net income per share	$	13.01		$	13.01		$	13.01	$	12.74		$	12.74		$	12.74

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Schedule of restricted stock activity

The following table summarizes the activities for our unvested restricted stock units (RSUs) for the six months ended June 30, 2017 (unaudited):

	Unvested Restricted Stock Units
	Number of Shares		Weighted- Average Grant-Date Fair Value
Unvested as of December 31, 2016	25,348,955		$	624.92
Granted	5,883,829		$	804.76
Vested	(6,426,955	)	$	595.93
Forfeited/canceled	(684,988	)	$	642.17
Unvested as of June 30, 2017	24,120,841		$	676.35

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Information about Segments and Geographic Areas (Tables)

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Schedule of segment information by segment

Information about segments during the periods presented were as follows (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016		2017
Revenues:
Google	$	21,315	$	25,762	$	41,407	$	50,268
Other Bets	185		248		350		492
Total revenues	$	21,500	$	26,010	$	41,757	$	50,760

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Operating income (loss):
Google	$	6,990		$	7,803		$	13,235		$	15,401
Other Bets	(855		)	(772		)	(1,629		)	(1,627		)
Reconciling items(1)	(167		)	(2,899		)	(296		)	(3,074		)
Total income from operations	$	5,968		$	4,132		$	11,310		$	10,700

⁽¹⁾  Reconciling items are primarily comprised of the European Commission fine for the three and six months ended June 30, 2017, as well as corporate administrative costs and other miscellaneous items that are not allocated to individual segments.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2017			2016			2017
Capital expenditures:
Google	$	2,056		$	2,835		$	4,095		$	5,241
Other Bets	280			151			557			321
Reconciling items(2)	(200		)	(155		)	(72		)	(223		)
Total capital expenditures as presented on the Consolidated Statements of Cash Flows	$	2,136		$	2,831		$	4,580		$	5,339

⁽²⁾  Reconciling items are related to timing differences of payments as segment capital expenditures are on accrual basis while total capital expenditures shown on the Consolidated Statements of Cash Flow are on cash basis and other miscellaneous differences.

Stock-based compensation (SBC) and depreciation, amortization, and impairment are included in segment operating income (loss) as shown below (in millions, unaudited):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2017		2016		2017
Stock-based compensation:
Google	$	1,321	$	1,854	$	2,644	$	3,708
Other Bets	149		111		287		225
Reconciling items(3)	33		38		66		79
Total stock-based compensation(4)	$	1,503	$	2,003	$	2,997	$	4,012
Depreciation, amortization, and impairment:
Google	$	1,409	$	1,543	$	2,726	$	2,939
Other Bets	81		82		135		189
Total depreciation, amortization, and impairment as presented on the Consolidated Statements of Cash Flows	$	1,490	$	1,625	$	2,861	$	3,128

⁽³⁾  Reconciling items represent corporate administrative costs that are not allocated to individual segments.

⁽⁴⁾  For purposes of segment reporting, SBC represents awards that we expect to settle in Alphabet stock.

Schedule of long-lived assets by geographic area

The following table presents our long-lived assets by geographic area (in millions):

	As of December 31, 2016		As of June 30, 2017
			(unaudited)
Long-lived assets:
United States	$	47,383	$	49,908
International	14,706		16,327
Total long-lived assets	$	62,089	$	66,235

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Revenues (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenues	$ 26,010	$ 21,500	$ 50,760	$ 41,757
Deferred revenue recognized during period			637
Early adoption of new accounting pronouncement | Revenue from Contracts with Customers (Topic 606)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
One-time reduction to opening retained earnings, net of tax					$ 15
Revenues	$ 8		$ 22

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Revenues (Revenue by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Segment Reporting Information [Line Items]
Revenues	$ 26,010	$ 21,500	$ 50,760	$ 41,757
Revenues
Segment Reporting Information [Line Items]
Hedging gains included in consolidated revenue	3	78	220	247
Google
Segment Reporting Information [Line Items]
Google advertising revenues	22,672	19,143	44,083	37,163
Google other revenues	3,090	2,172	6,185	4,244
Revenues	25,762	21,315	50,268	41,407
Google | Google properties
Segment Reporting Information [Line Items]
Google advertising revenues	18,425	15,400	35,828	29,728
Google | Google Network Members' properties
Segment Reporting Information [Line Items]
Google advertising revenues	4,247	3,743	8,255	7,435
Other Bets
Segment Reporting Information [Line Items]
Revenues	$ 248	$ 185	$ 492	$ 350

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Revenues (Revenue by Geographic Location) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 26,010	$ 21,500	$ 50,760	$ 41,757
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	12,322	10,035	24,091	19,416
EMEA
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	8,545	7,485	16,636	14,615
APAC
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	3,730	2,904	7,349	5,703
Other Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 1,413	$ 1,076	$ 2,684	$ 2,023

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Financial Instruments (Cash, Cash Equivalents and Marketable Securities Measured at Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses, and Fair Value By Significant Investment Category) (Details) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	$ 94,834	$ 86,603
Gross Unrealized Gains	239	361
Gross Unrealized Losses	(360)	(631)
Fair Value	94,713	86,333
Cash and Cash Equivalents	15,711	12,918	$ 13,627	$ 16,549
Marketable Securities	79,002	73,415
Cash
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	7,385	7,078
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	7,385	7,078
Cash and Cash Equivalents	7,385	7,078
Marketable Securities	0	0
Level 1
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	52,509	43,397
Gross Unrealized Gains	135	179
Gross Unrealized Losses	(176)	(215)
Fair Value	52,468	43,361
Cash and Cash Equivalents	7,283	5,396
Marketable Securities	45,185	37,965
Level 1 | Money market and other funds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	2,781	4,783
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	2,781	4,783
Cash and Cash Equivalents	2,781	4,783
Marketable Securities	0	0
Level 1 | U.S. government notes
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	49,502	38,454
Gross Unrealized Gains	14	46
Gross Unrealized Losses	(176)	(215)
Fair Value	49,340	38,285
Cash and Cash Equivalents	4,502	613
Marketable Securities	44,838	37,672
Level 1 | Marketable equity securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	226	160
Gross Unrealized Gains	121	133
Gross Unrealized Losses	0	0
Fair Value	347	293
Cash and Cash Equivalents	0	0
Marketable Securities	347	293
Level 2
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	34,940	36,128
Gross Unrealized Gains	104	182
Gross Unrealized Losses	(184)	(416)
Fair Value	34,860	35,894
Cash and Cash Equivalents	1,043	444
Marketable Securities	33,817	35,450
Level 2 | Time deposits
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	108	142
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	108	142
Cash and Cash Equivalents	106	140
Marketable Securities	2	2
Level 2 | Mutual funds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	232	204
Gross Unrealized Gains	13	7
Gross Unrealized Losses	0	0
Fair Value	245	211
Cash and Cash Equivalents	0	0
Marketable Securities	245	211
Level 2 | U.S. government agencies
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	2,540	1,826
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(6)	(11)
Fair Value	2,534	1,815
Cash and Cash Equivalents	799	300
Marketable Securities	1,735	1,515
Level 2 | Foreign government bonds
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	2,422	2,345
Gross Unrealized Gains	10	18
Gross Unrealized Losses	(11)	(7)
Fair Value	2,421	2,356
Cash and Cash Equivalents	0	0
Marketable Securities	2,421	2,356
Level 2 | Municipal securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	5,856	4,757
Gross Unrealized Gains	14	15
Gross Unrealized Losses	(10)	(65)
Fair Value	5,860	4,707
Cash and Cash Equivalents	8	2
Marketable Securities	5,852	4,705
Level 2 | Corporate debt securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	12,608	12,993
Gross Unrealized Gains	48	114
Gross Unrealized Losses	(22)	(116)
Fair Value	12,634	12,991
Cash and Cash Equivalents	130	2
Marketable Securities	12,504	12,989
Level 2 | Agency mortgage-backed securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	7,695	12,006
Gross Unrealized Gains	14	26
Gross Unrealized Losses	(133)	(216)
Fair Value	7,576	11,816
Cash and Cash Equivalents	0	0
Marketable Securities	7,576	11,816
Level 2 | Asset-backed securities
Cash, cash equivalents and marketable securities [Line Items]
Adjusted Cost	3,479	1,855
Gross Unrealized Gains	5	2
Gross Unrealized Losses	(2)	(1)
Fair Value	3,482	1,856
Cash and Cash Equivalents	0	0
Marketable Securities	$ 3,482	$ 1,856

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Financial Instruments (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Financial Instruments and Fair Value [Line Items]
Gross realized gains on the sale of our marketable securities	$ 24,000,000	$ 91,000,000	$ 172,000,000	$ 159,000,000
Gross realized losses on the sale of our marketable securities	39,000,000	100,000,000	209,000,000	335,000,000
Other-than-temporary impairment losses recognized	0	$ 0	0	$ 87,000,000
Cash collateral received from derivative financial instruments	54,000,000		54,000,000		$ 362,000,000
Effective portion of our cash flow hedges before tax effect	306,000,000		306,000,000
Foreign currency gain (loss) to be reclassified during next 12 months	339,000,000		339,000,000
Interest rate contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	0		0		0
Cash Flow Hedging Relationship | Foreign exchange contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	11,000,000,000		$ 11,000,000,000		10,700,000,000
Foreign exchange option contracts, maximum maturities			24 months
Derivatives in Fair Value Hedging Relationship | Foreign exchange contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	2,400,000,000		$ 2,400,000,000		2,400,000,000
Fair Value of Derivatives Not Designated as Hedging Instruments | Foreign exchange contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of derivative	$ 7,500,000,000		$ 7,500,000,000		$ 7,900,000,000

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Financial Instruments (Contractual Maturity Date of Marketable Debt Securities) (Details) $ in Millions	Jun. 30, 2017 USD ($)
Fair Value Disclosures [Abstract]
Due in 1 year	$ 29,827
Due in 1 year through 5 years	38,652
Due in 5 years through 10 years	1,281
Due after 10 years	8,650
Total	$ 78,410

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Financial Instruments (Gross Unrealized Losses and Fair Values for Investments in Unrealized Loss Position) (Details) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	$ 55,325	$ 48,601
Less than 12 Months, Unrealized Loss	(345)	(614)
12 Months or Greater, Fair Value	906	471
12 Months or Greater, Unrealized Loss	(15)	(17)
Total Fair Value	56,231	49,072
Total Unrealized Loss	(360)	(631)
U.S. government notes
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	37,169	26,411
Less than 12 Months, Unrealized Loss	(174)	(215)
12 Months or Greater, Fair Value	508	0
12 Months or Greater, Unrealized Loss	(2)	0
Total Fair Value	37,677	26,411
Total Unrealized Loss	(176)	(215)
U.S. government agencies
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	1,608	1,014
Less than 12 Months, Unrealized Loss	(6)	(11)
12 Months or Greater, Fair Value	0	0
12 Months or Greater, Unrealized Loss	0	0
Total Fair Value	1,608	1,014
Total Unrealized Loss	(6)	(11)
Foreign government bonds
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	1,448	956
Less than 12 Months, Unrealized Loss	(11)	(7)
12 Months or Greater, Fair Value	0	0
12 Months or Greater, Unrealized Loss	0	0
Total Fair Value	1,448	956
Total Unrealized Loss	(11)	(7)
Municipal securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	2,088	3,461
Less than 12 Months, Unrealized Loss	(8)	(63)
12 Months or Greater, Fair Value	54	46
12 Months or Greater, Unrealized Loss	(2)	(2)
Total Fair Value	2,142	3,507
Total Unrealized Loss	(10)	(65)
Corporate debt securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	5,157	6,184
Less than 12 Months, Unrealized Loss	(21)	(111)
12 Months or Greater, Fair Value	77	166
12 Months or Greater, Unrealized Loss	(1)	(5)
Total Fair Value	5,234	6,350
Total Unrealized Loss	(22)	(116)
Agency mortgage-backed securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	6,623	10,184
Less than 12 Months, Unrealized Loss	(123)	(206)
12 Months or Greater, Fair Value	267	259
12 Months or Greater, Unrealized Loss	(10)	(10)
Total Fair Value	6,890	10,443
Total Unrealized Loss	(133)	(216)
Asset-backed securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	1,232	391
Less than 12 Months, Unrealized Loss	(2)	(1)
12 Months or Greater, Fair Value	0	0
12 Months or Greater, Unrealized Loss	0	0
Total Fair Value	1,232	391
Total Unrealized Loss	$ (2)	$ (1)

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Financial Instruments (Fair Values of Outstanding Derivative Instruments) (Details) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Derivative Assets:
Derivative Assets	$ 66	$ 596
Derivative Liabilities:
Derivative Liabilities	409	13
Level 2
Derivative Assets:
Derivative Assets	58	596
Derivative Liabilities:
Derivative Liabilities	401	13
Level 2 | Foreign exchange contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative Assets	58	596
Level 2 | Foreign exchange contracts | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative Liabilities	401	13
Fair Value of Derivatives Designated as Hedging Instruments | Level 2
Derivative Assets:
Derivative Assets	35	539
Derivative Liabilities:
Derivative Liabilities	365	4
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative Assets	35	539
Fair Value of Derivatives Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative Liabilities	365	4
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2
Derivative Assets:
Derivative Assets	23	57
Derivative Liabilities:
Derivative Liabilities	36	9
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Prepaid revenue share, expenses and other assets, current and non-current
Derivative Assets:
Derivative Assets	23	57
Fair Value of Derivatives Not Designated as Hedging Instruments | Level 2 | Foreign exchange contracts | Accrued expenses and other liabilities, current and non-current
Derivative Liabilities:
Derivative Liabilities	$ 36	$ 9

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Financial Instruments (Effect of Derivative Instruments on Income and Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Foreign exchange contracts | Other income (expense), net | Fair Value of Derivatives Not Designated as Hedging Instruments
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in Income on Derivatives	$ (22)	$ (6)	$ (224)	$ (80)
Derivatives in Cash Flow Hedging Relationship
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Reclassified from AOCI into Income (Effective Portion)	5	80	223	250
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in OCI on Derivatives Before Tax Effect (Effective Portion)	(374)	155	(687)	188
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts | Revenues
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Reclassified from AOCI into Income (Effective Portion)	3	78	220	247
Derivatives in Cash Flow Hedging Relationship | Foreign exchange contracts | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing and Ineffective Portion)	20	(120)	46	(259)
Derivatives in Cash Flow Hedging Relationship | Interest rate contracts | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Reclassified from AOCI into Income (Effective Portion)	2	2	3	3
Derivatives in Fair Value Hedging Relationship | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total	5	0	9	0
Derivatives in Fair Value Hedging Relationship | Foreign exchange contracts | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) Recognized in Income on Derivatives, Foreign exchange contracts	(80)	53	(127)	25
Gains (Losses) Recognized in Income on Derivatives, Hedged item	$ 85	$ (53)	$ 136	$ (25)

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Financial Instruments (Offsetting of Financial Assets and Financial Liabilities) (Details) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Offsetting of Assets
Gross Amounts of Recognized Assets	$ 66	$ 596
Gross Amounts Offset in the Consolidated Balance Sheets	(8)	0
Net Presented in the Consolidated Balance Sheets	58	596
Financial Instruments	(26)	(11)
Cash Collateral Received	(18)	(337)
Non-Cash Collateral Received	(1)	(73)
Net Assets Exposed	13	175
Offsetting of Liabilities
Gross Amounts of Recognized Liabilities	409	13
Gross Amounts Offset in the Consolidated Balance Sheets	(8)	0
Net Presented in the Consolidated Balance Sheets	401	13
Financial Instruments	(26)	(11)
Cash Collateral Pledged	0	0
Non-Cash Collateral Pledged	0	0
Net Liabilities	$ 375	$ 2

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Non-Marketable Investments (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Investments, All Other Investments [Abstract]
Equity method investments	$ 1,800		$ 1,800		$ 1,700
Loss on equity method investments	13	$ 43	62	$ 148
Cost method investments	3,500		3,500		3,000
Fair value of cost method investments	8,600		8,600		8,100
Variable Interest Entity [Line Items]
Cost of non-marketable debt securities	1,100		1,100		1,100
VIE, Not Primary Beneficiary, Aggregated Disclosure
Variable Interest Entity [Line Items]
Net assets of VIE	1,200		1,200		1,200
Maximum loss exposure	$ 1,200		$ 1,200		$ 1,200

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Non-Marketable Investments (Rollforward of Other Marketable Investments) (Details) - Non-Marketable Debt Securities - Level 3 - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Other Investments Not Readily Marketable
Beginning balance	$ 1,165	$ 1,024
Total net gains (losses)
Included in earnings	(5)	0
Included in other comprehensive income	126	90
Purchases	70	76
Sales	(1)	(6)
Settlements	(3)	(14)
Ending balance	$ 1,352	$ 1,170

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Debt (Narrative) (Details)	1 Months Ended
	Apr. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Aug. 31, 2016 USD ($)	Feb. 28, 2014 USD ($)	May 31, 2011 USD ($) Tranche
Debt Instrument [Line Items]
Estimated fair value of long-term debt		$ 4,000,000,000	$ 3,900,000,000
3.625% Notes due on May 19, 2021
Debt Instrument [Line Items]
Effective interest rate		3.734%
3.375% Notes due on February 25, 2024
Debt Instrument [Line Items]
Effective interest rate		3.377%
1.998% Notes due on August 15, 2026
Debt Instrument [Line Items]
Effective interest rate		2.231%
Unsecured debt | Unsecured Senior Notes 3.375% due on February 2024 and Unsecured Senior Notes 3.625% Due May 2021
Debt Instrument [Line Items]
Debt instrument issued	$ 1,700,000,000
Gain (loss) on modification of debt	0
Unsecured debt | 2016 Notes
Debt Instrument [Line Items]
Debt instrument issued				$ 2,000,000,000.0
Google | Unsecured Senior Notes 3.375% due on February 2024 and Unsecured Senior Notes 3.625% Due May 2021
Debt Instrument [Line Items]
Debt subject to exchange	$ 1,700,000,000
Google | Unsecured debt | 2011 Notes
Debt Instrument [Line Items]
Debt instrument issued						$ 3,000,000,000.0
Number of tranches (in tranche) | Tranche						3
Google | Unsecured debt | 2014 Notes
Debt Instrument [Line Items]
Debt instrument issued					$ 1,000,000,000.0
Commercial Paper
Debt Instrument [Line Items]
Maximum borrowing on short term lines of credit		$ 5,000,000,000.0
Outstanding balance of commercial paper		0	0
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing on short term lines of credit		4,000,000,000.0
Line of credit drawn		$ 0	$ 0

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Debt (Long-Term Debt) (Details) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Long-Term Debt
Unamortized discount for the Notes above	$ (61)	$ (65)
Subtotal	3,939	3,935
Capital lease obligation	16	0
Total long-term debt	3,955	3,935
3.625% Notes due on May 19, 2021
Long-Term Debt
Long-term debt	$ 1,000	1,000
Long-term debt, interest rate	3.625%
3.375% Notes due on February 25, 2024
Long-Term Debt
Long-term debt	$ 1,000	1,000
Long-term debt, interest rate	3.375%
1.998% Notes due on August 15, 2026
Long-Term Debt
Long-term debt	$ 2,000	$ 2,000
Long-term debt, interest rate	1.998%

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Supplemental Financial Statement Information (Property and Equipment) (Details) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 53,341	$ 47,527
Less: accumulated depreciation and amortization	(15,665)	(13,293)
Property and equipment, net	37,676	34,234
Cost basis of property and equipment under capital lease	350
Land and buildings
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	21,508	19,804
Information technology assets
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	18,529	16,084
Construction in progress
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	9,221	8,166
Leasehold improvements
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	4,035	3,415
Furniture and fixtures
Property, Plant and Equipment, Net [Abstract]
Property and equipment, gross	$ 48	$ 58

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Supplemental Financial Statement Information (Notes Receivable) (Details) - USD ($) $ in Millions		6 Months Ended
	Oct. 29, 2014	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Payment received from Notes Receivable		$ 1,419	$ 0
Disposal by Sale | Motorola Mobile
Accounts, Notes, Loans and Financing Receivable [Line Items]
Promissory note received in connection with divestiture, term	3 years
Effective yield on note	4.50%
Principal of the Note Receivable		0		$ 1,448
Less: unamortized discount for the Note Receivable		0		(51)
Total		$ 0		$ 1,397

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Supplemental Financial Statement Information (Accrued Expenses and Other Current Liabilities) (Details) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Balance Sheet Components Disclosure [Abstract]
European Commission fine	$ 2,755	$ 0
Accrued customer liabilities	1,131	1,256
Other accrued expenses and current liabilities	4,674	4,888
Accrued expenses and other current liabilities	$ 8,560	$ 6,144

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Supplemental Financial Statement Information (Components of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Components of AOCI, net of tax
Beginning Balance	$ 139,036
Other comprehensive income (loss) before reclassifications	782	$ 709
Amounts reclassified from AOCI	(108)	14
Other comprehensive income (loss)	674	723
Ending Balance	148,286
Foreign Currency Translation Adjustments
Components of AOCI, net of tax
Beginning Balance	(2,646)	(2,047)
Other comprehensive income (loss) before reclassifications	1,016	37
Amounts reclassified from AOCI	0	0
Other comprehensive income (loss)	1,016	37
Ending Balance	(1,630)	(2,010)
Unrealized Gains (Losses) on Available-for-Sale Investments
Components of AOCI, net of tax
Beginning Balance	(179)	(86)
Other comprehensive income (loss) before reclassifications	225	556
Amounts reclassified from AOCI	51	183
Other comprehensive income (loss)	276	739
Ending Balance	97	653
Unrealized Gains (Losses) on Cash Flow Hedges
Components of AOCI, net of tax
Beginning Balance	423	259
Other comprehensive income (loss) before reclassifications	(459)	116
Amounts reclassified from AOCI	(159)	(169)
Other comprehensive income (loss)	(618)	(53)
Ending Balance	(195)	206
Total
Components of AOCI, net of tax
Beginning Balance	(2,402)	(1,874)
Ending Balance	$ (1,728)	$ (1,151)

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Supplemental Financial Statement Information (Effects on Net Income of Amounts Reclassified from AOCI) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Revenue	$ 26,010	$ 21,500	$ 50,760	$ 41,757
Other income (expense), net	245	151	496	(62)
Benefit (provision) for income taxes	(853)	(1,242)	(2,246)	(2,164)
Net income	3,524	4,877	8,950	9,084
Total amount reclassified, net of tax	(20)	38	108	(14)
Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income | Unrealized gains (losses) on available-for-sale investments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (expense), net	(26)	(14)	(51)	(183)
Benefit (provision) for income taxes	0	0	0	0
Net income	(26)	(14)	(51)	(183)
Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income | Unrealized gains (losses) on cash flow hedges
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Benefit (provision) for income taxes	1	(28)	(64)	(81)
Net income	6	52	159	169
Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income | Unrealized gains (losses) on cash flow hedges | Foreign exchange contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Revenue	3	78	220	247
Gains (Losses) Reclassified from AOCI to the Consolidated Statement of Income | Unrealized gains (losses) on cash flow hedges | Interest rate contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (expense), net	$ 2	$ 2	$ 3	$ 3

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Supplemental Financial Statement Information (Schedule of Other Income (Expense), Net) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Balance Sheet Components Disclosure [Abstract]
Interest income	$ 294	$ 307	$ 606	$ 577
Interest expense	(21)	(32)	(46)	(62)
Foreign currency exchange losses, net	(46)	(128)	(48)	(314)
Gain (loss) on marketable securities, net	(15)	(9)	(37)	(176)
Gain (loss) on non-marketable investments, net	(1)	(5)	(47)	(118)
Other	34	18	68	31
Other income (expense), net	245	151	496	(62)
Interest costs capitalized	$ 12	$ 0	$ 19	$ 0

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Acquisitions (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Goodwill	$ 16,604	$ 16,468
Other acquisitions
Business Acquisition [Line Items]
Total consideration	163
Cash acquired	10
Acquired intangible assets	59
Goodwill	106
Net liabilities assumed	(12)
Amount of goodwill expected to be deductible for tax purposes	$ 21
Other acquisitions | Patents and developed technology
Business Acquisition [Line Items]
Acquired intangible assets, weighted-average useful life	4 years
Other acquisitions | Customer relationships
Business Acquisition [Line Items]
Acquired intangible assets, weighted-average useful life	4 years
Other acquisitions | Trade names and other
Business Acquisition [Line Items]
Acquired intangible assets, weighted-average useful life	8 years 9 months 18 days

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Calico (Details) $ in Millions	46 Months Ended
	Jun. 30, 2017 USD ($)
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Payments to acquire interest in joint venture	$ 240
Commitment to Invest
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research commitments	490
Research and development arrangement | AbbVie Inc
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Accumulated payments for research and development commitment	750
Research and development arrangement | Calico
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research commitments	500
Accumulated payments for research and development commitment	$ 250

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Verily (Details) - USD ($) $ in Millions	1 Months Ended		3 Months Ended	6 Months Ended
	Jul. 24, 2017	Jan. 31, 2017	Mar. 31, 2017	Jun. 30, 2017	Jun. 30, 2016
Variable Interest Entity [Line Items]
Proceeds from sale of shares				$ 480	$ 0
Non-controlling interest
Variable Interest Entity [Line Items]
Increase in non-controlling interest from sale of shares			$ 15
Additional paid-in capital
Variable Interest Entity [Line Items]
Increase in non-controlling interest from sale of shares			465
Verily | Variable interest entity
Variable Interest Entity [Line Items]
Non-controlling interest sold in Verily		$ 800
Proceeds from sale of shares			$ 480
Verily | Variable interest entity | Subsequent Event
Variable Interest Entity [Line Items]
Proceeds from sale of shares	$ 320

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Goodwill and Other Intangible Assets (Changes in Carrying Amount of Goodwill) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2017 USD ($)
Changes in Carrying Amount of Goodwill
Balance as of December 31, 2016	$ 16,468
Acquisitions	106
Foreign currency translation and other adjustments	30
Balance as of June 30, 2017	16,604
Google
Changes in Carrying Amount of Goodwill
Balance as of December 31, 2016	16,027
Acquisitions	98
Foreign currency translation and other adjustments	30
Balance as of June 30, 2017	16,155
Other Bets
Changes in Carrying Amount of Goodwill
Balance as of December 31, 2016	441
Acquisitions	8
Foreign currency translation and other adjustments	0
Balance as of June 30, 2017	$ 449

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Goodwill and Other Intangible Assets (Acquisition-Related Intangible Assets that are being Amortized) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 6,156		$ 6,156		$ 6,357
Accumulated Amortization	3,223		3,223		3,050
Net Carrying Amount	2,933		2,933		3,307
Patents and developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	5,330		5,330		5,542
Accumulated Amortization	2,818		2,818		2,710
Net Carrying Amount	2,512		2,512		2,832
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	369		369		352
Accumulated Amortization	241		241		197
Net Carrying Amount	128		128		155
Trade names and other
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	457		457		463
Accumulated Amortization	164		164		143
Net Carrying Amount	293		293		$ 320
Acquisition-related intangible assets
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization of acquisition-related intangible assets	$ 200	$ 210	$ 406	$ 426

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Goodwill and Other Intangible Assets (Expected Amortization Expense for Acquisition-Related Intangible Assets) (Details) $ in Millions	Jun. 30, 2017 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2017	$ 384
2018	715
2019	604
2020	488
2021	456
Thereafter	286
Net Carrying Value	$ 2,933

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Contingencies (Details) € in Millions, $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2017 EUR (€)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)
Loss Contingencies [Line Items]
European Commission fine	$ 2,736		$ 0	$ 2,736	$ 0
European Commission Antitrust Investigation
Loss Contingencies [Line Items]
European Commission fine	$ 2,740	€ 2,420

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Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Denominator
Basic net income per share (in dollars per share)	$ 5.09	$ 7.11	$ 12.94	$ 13.23
Weighted-average effect of dilutive securities
Diluted net income per share (in dollars per share)	$ 5.01	$ 7.00	$ 12.74	$ 13.01
Class A Common Stock
Numerator
Allocation of undistributed earnings	$ 1,514	$ 2,086	$ 3,845	$ 3,880
Denominator
Number of shares used in basic computation (shares)	297,288	293,564	297,210	293,415
Basic net income per share (in dollars per share)	$ 5.09	$ 7.11	$ 12.94	$ 13.23
Numerator
Allocation of undistributed earnings for basic computation	$ 1,514	$ 2,086	$ 3,845	$ 3,880
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	240	350	611	656
Reallocation of undistributed earnings	(22)	(22)	(52)	(42)
Allocation of undistributed earnings	$ 1,732	$ 2,414	$ 4,404	$ 4,494
Denominator
Number of shares used in basic computation (shares)	297,288	293,564	297,210	293,415
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (shares)	47,133	49,228	47,234	49,584
Number of shares used in per share computation (shares)	345,679	344,993	345,786	345,354
Diluted net income per share (in dollars per share)	$ 5.01	$ 7.00	$ 12.74	$ 13.01
Class A Common Stock | Restricted stock units and other contingently issuable shares
Weighted-average effect of dilutive securities
Restricted stock units and other contingently issuable shares (in shares)	1,258	2,201	1,342	2,355
Class B Common Stock
Numerator
Allocation of undistributed earnings	$ 240	$ 350	$ 611	$ 656
Denominator
Number of shares used in basic computation (shares)	47,133	49,228	47,234	49,584
Basic net income per share (in dollars per share)	$ 5.09	$ 7.11	$ 12.94	$ 13.23
Numerator
Allocation of undistributed earnings for basic computation	$ 240	$ 350	$ 611	$ 656
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0	0	0	0
Reallocation of undistributed earnings	(4)	(6)	(9)	(11)
Allocation of undistributed earnings	$ 236	$ 344	$ 602	$ 645
Denominator
Number of shares used in basic computation (shares)	47,133	49,228	47,234	49,584
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (shares)	0	0	0	0
Number of shares used in per share computation (shares)	47,133	49,228	47,234	49,584
Diluted net income per share (in dollars per share)	$ 5.01	$ 7.00	$ 12.74	$ 13.01
Class B Common Stock | Restricted stock units and other contingently issuable shares
Weighted-average effect of dilutive securities
Restricted stock units and other contingently issuable shares (in shares)	0	0	0	0
Class C Capital Stock
Numerator
Allocation of undistributed earnings	$ 1,770	$ 2,441	$ 4,494	$ 4,548
Denominator
Number of shares used in basic computation (shares)	347,538	343,427	347,313	343,870
Basic net income per share (in dollars per share)	$ 5.09	$ 7.11	$ 12.94	$ 13.23
Numerator
Allocation of undistributed earnings for basic computation	$ 1,770	$ 2,441	$ 4,494	$ 4,548
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	0	0	0	0
Reallocation of undistributed earnings	22	22	52	42
Allocation of undistributed earnings	$ 1,792	$ 2,463	$ 4,546	$ 4,590
Denominator
Number of shares used in basic computation (shares)	347,538	343,427	347,313	343,870
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding (shares)	0	0	0	0
Number of shares used in per share computation (shares)	357,824	351,854	356,984	352,726
Diluted net income per share (in dollars per share)	$ 5.01	$ 7.00	$ 12.74	$ 13.01
Class C Capital Stock | Restricted stock units and other contingently issuable shares
Weighted-average effect of dilutive securities
Restricted stock units and other contingently issuable shares (in shares)	10,286	8,427	9,671	8,856

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Stockholders' Equity (Narrative) (Details) - USD ($) shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Oct. 31, 2016
Stockholders Equity Note [Line Items]
Stock-based compensation expense	$ 2,062,000,000	$ 1,510,000,000	$ 4,127,000,000	$ 3,010,000,000
Awards expected to be settled with stock	2,003,000,000	$ 1,503,000,000	$ 4,012,000,000	$ 2,997,000,000
October 2016 Share Repurchase Program | Class C Capital Stock
Stockholders Equity Note [Line Items]
Authorized share repurchase amount					$ 7,019,340,976.83
Repurchases of capital stock (in shares)			3.1
Repurchases of capital stock			$ 2,700,000,000
Restricted Stock Units (RSUs)
Stockholders Equity Note [Line Items]
Unrecognized compensation cost	$ 14,800,000,000		$ 14,800,000,000
Weighted average recognition period for unrecognized stock-based compensation expense			2 years 7 months

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Stockholders' Equity (Unvested Restricted Stock Units Activity) (Details) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2017 $ / shares shares
Unvested restricted stock units - number of shares
Unvested at December 31 (in shares) | shares	25,348,955
Granted (in shares) | shares	5,883,829
Vested (in shares) | shares	(6,426,955)
Forfeited/canceled (in shares) | shares	(684,988)
Unvested at June 30 (in shares) | shares	24,120,841
Unvested restricted stock units - weighted-average grant-date fair value
Unvested at December 31 (in dollars per share) | $ / shares	$ 624.92
Granted (in dollars per share) | $ / shares	804.76
Vested (in dollars per share) | $ / shares	595.93
Forfeited/canceled (in dollars per share) | $ / shares	642.17
Unvested at June 30 (in dollars per share) | $ / shares	$ 676.35

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Income Taxes (Details) - USD ($) $ in Billions	Jun. 30, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Gross unrecognized tax benefits	$ 5.0	$ 5.4
Unrecognized tax benefits that would impact effective tax rate	$ 3.8	$ 4.3

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Information about Segments and Geographic Areas (Revenue by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Segment Reporting Information [Line Items]
Revenues	$ 26,010	$ 21,500	$ 50,760	$ 41,757
Google
Segment Reporting Information [Line Items]
Revenues	25,762	21,315	50,268	41,407
Other Bets
Segment Reporting Information [Line Items]
Revenues	$ 248	$ 185	$ 492	$ 350

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Information about Segments and Geographic Areas (Operating Income (Loss) by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Segment Reporting Information [Line Items]
Segment operating income (loss)	$ 4,132	$ 5,968	$ 10,700	$ 11,310
Operating Segments | Google
Segment Reporting Information [Line Items]
Segment operating income (loss)	7,803	6,990	15,401	13,235
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Segment operating income (loss)	(772)	(855)	(1,627)	(1,629)
Reconciling items
Segment Reporting Information [Line Items]
Segment operating income (loss)	$ (2,899)	$ (167)	$ (3,074)	$ (296)

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Information about Segments and Geographic Areas (Capital Expenditures by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Segment Reporting Information [Line Items]
Capital expenditures	$ 2,831	$ 2,136	$ 5,339	$ 4,580
Operating Segments | Google
Segment Reporting Information [Line Items]
Capital expenditures	2,835	2,056	5,241	4,095
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Capital expenditures	151	280	321	557
Reconciling items
Segment Reporting Information [Line Items]
Capital expenditures	$ (155)	$ (200)	$ (223)	$ (72)

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Information about Segments and Geographic Areas (Stock-based Compensation and Depreciation, Amortization and Impairment by Segment) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Segment Reporting Information [Line Items]
Stock-based compensation expense	$ 2,003	$ 1,503	$ 4,012	$ 2,997
Depreciation, amortization and impairment	1,625	1,490	3,128	2,861
Operating Segments | Google
Segment Reporting Information [Line Items]
Stock-based compensation expense	1,854	1,321	3,708	2,644
Depreciation, amortization and impairment	1,543	1,409	2,939	2,726
Operating Segments | Other Bets
Segment Reporting Information [Line Items]
Stock-based compensation expense	111	149	225	287
Depreciation, amortization and impairment	82	81	189	135
Reconciling items
Segment Reporting Information [Line Items]
Stock-based compensation expense	$ 38	$ 33	$ 79	$ 66

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Information about Segments and Geographic Areas (Long-Lived Assets by Geographic Area) (Details) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 66,235	$ 62,089
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	49,908	47,383
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 16,327	$ 14,706