Revenues

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that we expect in exchange for those goods or services. Sales and other similar taxes are excluded from revenues.

The following table presents our revenues disaggregated by type (in millions). Certain amounts in prior periods have been reclassified to conform with current period presentation.



	Year Ended December 31,
	2017			2018			2019
Google Search & other	$	69,811		$	85,296		$	98,115
YouTube ads⁽¹⁾	8,150			11,155			15,149
Google properties	77,961			96,451			113,264
Google Network Members' properties	17,616			20,010			21,547
Google advertising	95,577			116,461			134,811
Google Cloud	4,056			5,838			8,918
Google other⁽¹⁾	10,914			14,063			17,014
Google revenues	110,547			136,362			160,743
Other Bets revenues	477			595			659
Hedging gains (losses)	(169		)	(138		)	455
Total revenues	$	110,855		$	136,819		$	161,857


⁽¹⁾	YouTube non-advertising revenues are included in Google other revenues.

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



	Year Ended December 31,
	2017					2018					2019
United States	$	52,449		47	%	$	63,269		46	%	$	74,843	46	%
EMEA⁽¹⁾	36,236			33		44,739			33		50,645		31
APAC⁽¹⁾	16,192			15		21,341			15		26,928		17
Other Americas⁽¹⁾	6,147			5		7,608			6		8,986		6
Hedging gains (losses)	(169		)	0		(138		)	0		455		0
Total revenues	$	110,855		100	%	$	136,819		100	%	$	161,857	100	%


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

Advertising Revenues

We generate advertising revenues primarily by delivering advertising on Google properties, including Google.com, the Google Search app, YouTube, Google Play, Gmail and Google Maps; and Google Network Members’ properties.

Our customers generally purchase advertising inventory through Google Ads, Google Ad Manager as part of the Authorized Buyers marketplace, and Google Marketing Platform, among others.

We offer advertising on a click, impression or view basis. We recognize revenue each time a user clicks on the ad, when the ad is displayed or a user views the ad.

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 Google Network Members are recorded as cost of revenues. Where we are the principal, 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 before it is transferred to our customers, and is further supported by us being primarily responsible to our customers and having a level of discretion in establishing pricing.

Google Cloud Revenues

Google Cloud revenues consist primarily of revenues from Google Cloud Platform (which includes infrastructure and data and analytics platform products, and other services), G Suite productivity tools and other enterprise cloud services. Our cloud revenues are provided on either a consumption or subscription basis. Revenue related to cloud services provided on a consumption basis is recognized when the customer utilizes the services, based on the quantity of services consumed. Revenue related to cloud services provided on a subscription basis is recognized ratably over the contract term as the customer receives and consumes the benefits of the cloud services.

Other Revenues

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


•	Google Play, which includes revenues from sale of apps and in-app purchases (which we recognize net of payout to developers) and digital content sold in the Google Play store;


•	hardware, including Google Nest home products, Pixelbooks, Pixel phones and other devices;


•	YouTube non-advertising including, YouTube premium and YouTube TV subscriptions and other services; and


•	other 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 revenues 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.

Customer Incentives and Credits

Certain customers 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. We believe that there will not be significant changes to our estimates of variable consideration.

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 year ended December 31, 2019 was primarily driven by cash payments received or due in advance of satisfying our performance obligations, offset by $1.7 billion of revenues recognized that were included in the deferred revenue balance as of December 31, 2018.

Additionally, we have performance obligations associated with commitments in customer contracts, primarily related to Google Cloud, for future services that have not yet been recognized in revenue. This includes related deferred revenue currently recorded and amounts that will be invoiced in future periods. As of December 31, 2019, the amount not yet recognized in revenue from these commitments is $11.4 billion, which reflects our assessment of relevant contract terms. This amount excludes contracts (i) 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. We expect to recognize approximately two thirds over the next 24 months with the remaining thereafter. However, the amount and timing of revenue recognition is largely driven by customer utilization, which could impact our estimate of the remaining amount of commitments and when we expect to recognize such revenues.

Sales Commissions

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.