Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Dec. 31, 2018	Jan. 28, 2019	Jun. 29, 2018
Entity Information
Document Type	10-K
Amendment Flag	false
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	FB
Entity Registrant Name	FACEBOOK INC
Entity Central Index Key	0001326801
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 486
Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Class A Common Stock
Entity Information
Entity Common Stock, Shares Outstanding		2,385,533,940
Class B Common Stock
Entity Information
Entity Common Stock, Shares Outstanding		468,455,860

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 10,019	$ 8,079
Marketable securities	31,095	33,632
Accounts receivable, net of allowances of $229 and $189 as of December 31, 2018 and 2017, respectively	7,587	5,832
Prepaid expenses and other current assets	1,779	1,020
Total current assets	50,480	48,563
Property and equipment, net	24,683	13,721
Intangible assets, net	1,294	1,884
Goodwill	18,301	18,221
Other assets	2,576	2,135
Total assets	97,334	84,524
Current liabilities:
Accounts payable	820	380
Partners payable	541	390
Accrued expenses and other current liabilities	5,509	2,892
Deferred revenue and deposits	147	98
Total current liabilities	7,017	3,760
Other liabilities	6,190	6,417
Total liabilities	13,207	10,177
Commitments and contingencies
Stockholders' equity:
Common stock, $0.000006 par value; 5,000 million Class A shares authorized, 2,385 million and 2,397 million shares issued and outstanding, as of December 31, 2018 and December 31, 2017, respectively; 4,141 million Class B shares authorized, 469 million and 509 million shares issued and outstanding, as of December 31, 2018 and December 31, 2017, respectively.	0	0
Additional paid-in capital	42,906	40,584
Accumulated other comprehensive loss	(760)	(227)
Retained earnings	41,981	33,990
Total stockholders' equity	84,127	74,347
Total liabilities and stockholders' equity	$ 97,334	$ 84,524

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Accounts receivable, allowances for doubtful accounts	$ 229	$ 189
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 0.000006	$ 0.000006
Class A Common Stock
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 0.000006
Common stock, shares authorized (in shares)	5,000,000,000	5,000,000,000
Common stock, shares, issued (in shares)	2,385,000,000	2,397,000,000
Common stock, shares, outstanding (in shares)	2,385,000,000	2,397,000,000
Class B Common Stock
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 0.000006
Common stock, shares authorized (in shares)	4,141,000,000	4,141,000,000
Common stock, shares, issued (in shares)	469,000,000	509,000,000
Common stock, shares, outstanding (in shares)	469,000,000	509,000,000

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue	$ 55,838	$ 40,653	$ 27,638
Costs and expenses:
Cost of revenue	9,355	5,454	3,789
Research and development	10,273	7,754	5,919
Marketing and sales	7,846	4,725	3,772
General and administrative	3,451	2,517	1,731
Total costs and expenses	30,925	20,450	15,211
Income from operations	24,913	20,203	12,427
Interest and other income (expense), net	448	391	91
Income before provision for income taxes	25,361	20,594	12,518
Provision for income taxes	3,249	4,660	2,301
Net income	22,112	15,934	10,217
Less: Net income attributable to participating securities	1	14	29
Net income attributable to Class A and Class B common stockholders	$ 22,111	$ 15,920	$ 10,188
Earnings per share attributable to Class A and Class B common stockholders:
Basic (in dollars per share)	$ 7.65	$ 5.49	$ 3.56
Diluted (in dollars per share)	$ 7.57	$ 5.39	$ 3.49
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders:
Basic (in shares)	2,890	2,901	2,863
Diluted (in shares)	2,921	2,956	2,925
Share-based compensation expense included in costs and expenses:
Share-based compensation expense	$ 4,152	$ 3,723	$ 3,218
Cost of revenue
Share-based compensation expense included in costs and expenses:
Share-based compensation expense	284	178	113
Research and development
Share-based compensation expense included in costs and expenses:
Share-based compensation expense	3,022	2,820	2,494
Marketing and sales
Share-based compensation expense included in costs and expenses:
Share-based compensation expense	511	436	368
General and administrative
Share-based compensation expense included in costs and expenses:
Share-based compensation expense	$ 335	$ 289	$ 243

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 22,112	$ 15,934	$ 10,217
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of tax	(450)	566	(152)
Change in unrealized gain/loss on available-for-sale investments and other, net of tax	(52)	(90)	(96)
Comprehensive income	$ 21,610	$ 16,410	$ 9,969

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions	Total	Class A and Class B Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Impact of the adoption of new accounting pronouncement	$ 1,705		$ 39		$ 1,666
Common stock, shares outstanding beginning (in shares) at Dec. 31, 2015		2,845
Total stockholders' equity, beginning at Dec. 31, 2015	44,218	$ 0	34,886	$ (455)	9,787
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for cash upon exercise of stock options, shares		3
Issuance of common stock for cash upon exercise of stock options, value	16		16
Issuance of common stock related to acquisitions, shares		1
Issuance of common stock related to acquisitions, value	74		74
Issuance of common stock for settlement of RSUs, shares		43
Issuance of common stock for settlement of RSUs. value	0
Shares withheld related to net share settlement, value	(6)		(6)
Share-based compensation, related to employee share-based awards	3,218		3,218
Other comprehensive income (loss)	(248)			(248)
Net income	10,217				10,217
Common stock, shares outstanding ending (in shares) at Dec. 31, 2016		2,892
Total stockholders' equity, ending at Dec. 31, 2016	59,194	$ 0	38,227	(703)	21,670
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for cash upon exercise of stock options, shares		3
Issuance of common stock for cash upon exercise of stock options, value	13		13
Issuance of common stock related to acquisitions, shares		2
Issuance of common stock related to acquisitions, value	323		323
Issuance of common stock for settlement of RSUs, shares		43
Issuance of common stock for settlement of RSUs. value	0
Shares withheld related to net share settlement, shares		(21)
Shares withheld related to net share settlement, value	(3,246)		(1,702)		(1,544)
Share-based compensation, related to employee share-based awards	3,723		3,723
Share repurchases, shares		(13)
Share repurchases, value	(2,070)				(2,070)
Other comprehensive income (loss)	476			476
Net income	15,934				15,934
Common stock, shares outstanding ending (in shares) at Dec. 31, 2017		2,906
Total stockholders' equity, ending at Dec. 31, 2017	74,347	$ 0	40,584	(227)	33,990
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Impact of the adoption of new accounting pronouncements	141			(31)	172
Issuance of common stock for cash upon exercise of stock options, shares		2
Issuance of common stock for cash upon exercise of stock options, value	15		15
Issuance of common stock for settlement of RSUs, shares		44
Issuance of common stock for settlement of RSUs. value	0
Shares withheld related to net share settlement, shares		(19)
Shares withheld related to net share settlement, value	(3,208)		(1,845)		(1,363)
Share-based compensation, related to employee share-based awards	4,152		4,152
Share repurchases, shares		(79)
Share repurchases, value	(12,930)				(12,930)
Other comprehensive income (loss)	(502)			(502)
Net income	22,112				22,112
Common stock, shares outstanding ending (in shares) at Dec. 31, 2018		2,854
Total stockholders' equity, ending at Dec. 31, 2018	$ 84,127	$ 0	$ 42,906	$ (760)	$ 41,981

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities
Net income	$ 22,112	$ 15,934	$ 10,217
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,315	3,025	2,342
Share-based compensation	4,152	3,723	3,218
Deferred income taxes	286	(377)	(457)
Other	(64)	24	30
Changes in assets and liabilities:
Accounts receivable	(1,892)	(1,609)	(1,489)
Prepaid expenses and other current assets	(690)	(192)	(159)
Other assets	(159)	154	14
Accounts payable	221	43	14
Partners payable	157	95	67
Accrued expenses and other current liabilities	1,417	309	1,014
Deferred revenue and deposits	53	4	35
Other liabilities	(634)	3,083	1,262
Net cash provided by operating activities	29,274	24,216	16,108
Cash flows from investing activities
Purchases of property and equipment, net	(13,915)	(6,733)	(4,491)
Purchases of marketable securities	(14,656)	(25,682)	(22,341)
Sales of marketable securities	12,358	9,444	13,894
Maturities of marketable securities	4,772	2,988	1,261
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets	(137)	(122)	(123)
Other investing activities, net	(25)	(13)	8
Net cash used in investing activities	(11,603)	(20,118)	(11,792)
Cash flows from financing activities
Taxes paid related to net share settlement of equity awards	(3,208)	(3,246)	(6)
Principal payments on capital lease and other financing obligations	0	0	(312)
Repurchases of Class A common stock	(12,879)	(1,976)	0
Net change in overdraft in cash pooling entities	500	0	0
Other financing activities, net	15	(13)	8
Net cash used in financing activities	(15,572)	(5,235)	(310)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(179)	232	(63)
Net increase (decrease) in cash, cash equivalents, and restricted cash	1,920	(905)	3,943
Cash, cash equivalents, and restricted cash at beginning of the period	8,204	9,109	5,166
Cash, cash equivalents, and restricted cash at end of the period	10,124	8,204	9,109
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Total cash, cash equivalents, and restricted cash	8,204	9,109	5,166
Cash paid during the period for:
Interest	1	0	11
Income taxes, net	3,762	2,117	1,210
Non-cash investing and financing activities:
Net change in prepaids and liabilities related to property and equipment additions	918	495	136
Settlement of acquisition-related contingent consideration liability	0	102	33
Change in unsettled repurchases of Class A common stock	$ 51	$ 94	$ 0

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Organization and Description of Business

Facebook was incorporated in Delaware in July 2004. Our mission is to give people the power to build community and bring the world closer together. We generate substantially all of our revenue from advertising.

Basis of Presentation

We prepared the consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts of Facebook, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

Use of Estimates

Conformity with GAAP requires the use of estimates and judgments that affect the reported amounts in the consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, those related to income taxes, loss contingencies, fair value of acquired intangible assets and goodwill, collectability of accounts receivable, fair value of financial instruments, leases, useful lives of intangible assets and property and equipment, and revenue recognition. These estimates are based on management's knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ materially from those estimates.

Revenue Recognition

On January 1, 2018, we adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition (Topic 605), using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with our historic accounting under Topic 605. The impact of adopting the new revenue standard was not material to our condensed consolidated financial statements and there was no adjustment to beginning retained earnings on January 1, 2018.

Under Topic 606, revenue is 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.

We determine revenue recognition through the following steps:


•	identification of the contract, or contracts, with a customer;


•	identification of the performance obligations in the contract;


•	determination of the transaction price;


•	allocation of the transaction price to the performance obligations in the contract; and


•	recognition of revenue when, or as, we satisfy a performance obligation.

Revenue excludes sales and usage-based taxes where it has been determined that we are acting as a pass-through agent.

Revenue disaggregated by revenue source for the years ended December 31, 2018, 2017 and 2016 consists of the following (in millions):



	Year Ended December 31,
	2018		2017⁽¹⁾		2016 ⁽¹⁾
Advertising	$	55,013	$	39,942	$	26,885
Payments and other fees	825		711		753
Total revenue	$	55,838	$	40,653	$	27,638

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

Revenue disaggregated by geography, based on the billing address of our customer, consists of the following (in millions):



	Year Ended December 31,
	2018		2017⁽¹⁾		2016 ⁽¹⁾
Revenue:
US & Canada⁽²⁾	$	25,727	$	19,065	$	13,432
Europe⁽³⁾	13,631		10,126		6,792
Asia-Pacific	11,733		7,921		5,037
Rest of World⁽³⁾	4,747		3,541		2,377
Total revenue	$	55,838	$	40,653	$	27,638

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

^{(2) United States revenue was}^{$24.10 billion}^,^{$17.73 billion}^{, and}^{$12.58 billion}^{for the}^{years ended}^{December 31, 2018}^,²⁰¹⁷^{, and}²⁰¹⁶^.

^{(3) Europe includes Russia and Turkey, and Rest of World includes Africa, Latin America, and the Middle East.}

Advertising

Advertising revenue is generated by displaying ad products on Facebook, Instagram, Messenger, and third-party affiliated websites or mobile applications. Marketers pay for ad products either directly or through their relationships with advertising agencies or resellers, based on the number of impressions delivered or the number of actions, such as clicks, taken by our users.

Revenue is 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. We recognize revenue from the display of impression-based ads in the contracted period in which the impressions are delivered. Impressions are considered delivered when an ad is displayed to users. We recognize revenue from the delivery of action-based ads in the period in which a user takes the action the marketer contracted for. For advertising revenue arrangements where we are not the principal, we recognize revenue on a net basis.

We may accept a lower consideration than the amount promised per the contract for certain revenue transactions and certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration when estimating the amount of revenue to recognize. We believe that there will not be significant changes to our estimates of variable consideration.

Payments and Other Fees

Payments revenue is comprised of the net fee we receive from developers using our Payments infrastructure.

Other fees revenue consists primarily of revenue from the delivery of consumer hardware devices, as well as revenue from various other sources.

Deferred Revenue and Deposits

Deferred revenue consists of billings and payments from marketers in advance of revenue recognition. Deposits relate to unused balances held on behalf of our users who primarily use these balances to make purchases in games on our platform. Once this balance is utilized by a user, approximately 70% of this amount would then be payable to the developer and the balance would be recognized as revenue. The increase in the deferred revenue balance for the year ended December 31, 2018 was driven by prepayments from marketers, partially offset by revenue recognized that was included in the deferred revenue balance at the beginning of the period.

Our payment terms vary by the products or services offered. The term between billings 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.

Deferred revenue and deposits consists of the following (in millions):



	December 31,
	2018		2017
Deferred revenue	$	117	$	68
Deposits	30		30
Total deferred revenue and deposits	$	147	$	98

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 marketing and sales on our consolidated statements of income.

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.

Cost of Revenue

Our cost of revenue consists primarily of expenses associated with the delivery and distribution of our products. These include expenses related to the operation of our data centers, such as facility and server equipment depreciation, salaries, benefits, and share-based compensation for employees on our operations teams, and energy and bandwidth costs. Cost of revenue also includes costs associated with partner arrangements, including traffic acquisition and content acquisition costs, credit card and other transaction fees related to processing customer transactions, and cost of consumer hardware device inventory sold.

Content acquisition costs

We license and pay to produce content in order to increase engagement on the platform. For licensed content, we capitalize the fee per title and record a corresponding liability at the gross amount of the liability when the license period begins, the cost of the title is known and the title is accepted and available for viewing. The amounts capitalized are limited to estimated net realizable value or fair value on a per title basis. The portion available for viewing within one year is recognized as prepaid expenses and other current assets and the remaining portion as other assets on the consolidated balance sheets. For original content, we capitalize costs associated with the production, including development costs and direct costs, if those amounts are recoverable. Capitalized original content costs are included in other assets on the consolidated balance sheets. Capitalized costs are amortized in cost of revenue on the consolidated statements of income based on historical and estimated viewing patterns.

Capitalized content costs are reviewed when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than amortized cost. If such changes are identified, capitalized content assets will be stated at the lower of unamortized cost, net realizable value or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off.

Capitalized content acquisition costs have not been material to date.

Income Taxes

We record provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred income tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as for loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We recognize the deferred income tax effects of a change in tax rates in the period of the enactment.

We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance.

We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. These uncertain tax positions include our estimates for transfer pricing that have been developed based upon analyses of appropriate arms-length prices. Similarly, our estimates related to uncertain tax positions concerning research tax credits are based on an assessment of whether our available documentation corroborating the nature of our activities supporting the tax credits will be sufficient. Although we believe that we have adequately reserved for our uncertain tax positions (including net interest and penalties), we can provide no assurance that the final tax outcome of these matters will not be materially different. We make adjustments to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial position, results of operations, and cash flows.

On December 22, 2017, the 2017 Tax Cuts and Jobs Act (Tax Act) was enacted into law and the new legislation contains several key tax provisions that affected us, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, re-measuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As a result, we previously provided a provisional estimate of the effect of the Tax Act in our financial statements. In the fourth quarter of 2018, we completed our analysis to determine the effect of the Tax Act and recorded immaterial adjustments as of December 31, 2018. See Note 12 in these notes to the consolidated financial statements for additional information.

Advertising Expense

Advertising costs are expensed when incurred and are included in marketing and sales expenses in the accompanying consolidated statements of income. We incurred advertising expenses of $1.10 billion, $324 million, and $310 million for the years ended December 31, 2018, 2017, and 2016, respectively.

Cash and Cash Equivalents, Marketable Securities, and Restricted Cash

Cash and cash equivalents primarily consist of cash on deposit with banks and investments in money market funds with maturities of 90 days or less from the date of purchase.

We hold investments in marketable securities, consisting of U.S. government securities, U.S. government agency securities, and corporate debt securities. We classify our marketable securities as available-for-sale investments in our current assets because they represent investments of cash available for current operations. Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses, net of taxes, included in accumulated other comprehensive income (loss) in stockholders' equity. Unrealized losses are charged against interest and other income (expense), net when a decline in fair value is determined to be other-than-temporary. We have not recorded any such impairment charge in the periods presented. We determine realized gains or losses on sale of marketable securities on a specific identification method, and record such gains or losses as interest and other income (expense), net.

We also maintain a multi-currency notional cash pool for our participating entities with a third-party bank provider. Actual cash balances are not physically converted and are not commingled between participating legal entities. As part of the notional cash pool agreement, the bank extends overdraft credit to our participating entities as needed, provided that the overall notionally pooled balance of all accounts in the pool at the end of each day is at least zero. We classify these overdraft balances within accrued expenses and other current liabilities on the accompanying consolidated balance sheets.

We classify certain restricted cash balances within prepaid expenses and other current assets and other assets on the accompanying consolidated balance sheets based upon the term of the remaining restrictions.

Fair Value of Financial Instruments

We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1-Quoted prices in active markets for identical assets or liabilities.

Level 2-Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3-Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability.

Our valuation techniques used to measure the fair value of money market funds and marketable debt securities were derived from quoted market prices or alternative pricing sources and models utilizing market observable inputs.

Accounts Receivable and Allowances

Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers.

Property and Equipment

Property and equipment, which includes amounts recorded under capital leases, are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or the remaining lease term, whichever is shorter.

The estimated useful lives of property and equipment are described below:



Property and Equipment		Useful Life
Network equipment		Three to 25 years
Buildings		Three to 30 years
Computer software, office equipment and other		Two to five years
Leased equipment and leasehold improvements		Lesser of estimated useful life or remaining lease term

Land and assets held within construction in progress are not depreciated. Construction in progress is related to the construction or development of property and equipment that have not yet been placed in service for their intended use.

The cost of maintenance and repairs is expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in income from operations.

Lease Obligations

We enter into lease arrangements for office space, land, facilities, data centers, and equipment under non-cancelable capital and operating leases. Certain of the operating lease agreements contain rent holidays, rent escalation provisions, and purchase options. Rent holidays and rent escalation provisions are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease inception.

We record assets and liabilities for the estimated construction costs incurred by third parties under build-to-suit lease arrangements to the extent that we are involved in the construction of structural improvements or bear construction risk prior to commencement of a lease. As of December 31, 2018, we completed our build-to-suit lease arrangements and properly derecognized the associated assets on our consolidated balance sheet.

Loss Contingencies

We are involved in legal proceedings, claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is both 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 possible loss in the notes to the consolidated financial statements.

We review the developments in our contingencies that could affect the amount of the provisions that has been previously recorded, and the matters and related possible losses disclosed. We make adjustments to our provisions and changes to our disclosures accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Significant judgment is required to determine both the probability and the estimated amount.

Business Combinations

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Long-Lived Assets, Including Goodwill and Other Acquired Intangible Assets

We evaluate the recoverability of property and equipment and finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. We have not recorded any significant impairment charges during the years presented.

We review goodwill for impairment at least annually or more frequently if events or changes in circumstances would more likely than not reduce the fair value of our single reporting unit below its carrying value. As of December 31, 2018, no impairment of goodwill has been identified.

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. We routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we reduce the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life.

Foreign Currency

Generally, the functional currency of our international subsidiaries is the local currency. We translate the financial statements of these subsidiaries to U.S. dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenue, costs, and expenses. Translation gains and losses are recorded in accumulated other comprehensive (loss) income as a component of stockholders' equity. As of December 31, 2018 and 2017, we had a cumulative translation loss, net of tax of $466 million and $16 million, respectively. Net losses resulting from foreign exchange transactions were $213 million, $6 million, and $76 million for the years ended December 31, 2018, 2017, and 2016, respectively. These losses were recorded as interest and other income (expense), net in our consolidated statements of income.

Credit Risk and Concentration

Our financial instruments that are potentially subject to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, marketable securities, and accounts receivable. The majority of cash equivalents consists of short-term money market funds, which are managed by reputable financial institutions. Marketable securities consist of investments in U.S. government securities, U.S. government agency securities, and corporate debt securities. Our investment policy limits investment instruments to U.S. government securities, U.S. government agency securities, and corporate debt securities with the main objective of preserving capital and maintaining liquidity.

Accounts receivable are typically unsecured and are derived from revenue earned from customers across different industries and countries. We generated 43%, 44%, and 46% of our revenue for the years ended December 31, 2018, 2017, and 2016, respectively, from marketers and developers based in the United States, with the majority of revenue outside of the United States coming from customers located in western Europe, China, Canada, Australia, and Brazil.

We perform ongoing credit evaluations of our customers, and generally do not require collateral. We maintain an allowance for estimated credit losses. During the years ended December 31, 2018, 2017, and 2016, our bad debt expenses were $77 million, $48 million, and $66 million, respectively. In the event that accounts receivable collection cycles deteriorate, our operating results and financial position could be adversely affected.

No customer represented 10% or more of total revenue during the years ended December 31, 2018, 2017, and 2016.

Segments

Our chief operating decision-maker is our Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for operations, operating results, and planning for levels or components below the consolidated unit level. Accordingly, we have determined that we have a single reportable segment and operating segment structure.

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Topic 606, which supersedes the revenue recognition requirements in Topic 605. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. See Revenue Recognition above for further details.

In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers Other than Inventory (ASU 2016-16), which requires companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. We adopted the new standard effective January 1, 2018, using the modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the effective date, which was not material to our consolidated financial statements.

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statements of cash flows. We adopted the new standard effective January 1, 2018, using the retrospective transition approach. The reclassified restricted cash balances from investing activities to changes in cash, cash equivalents and restricted cash on the consolidated statements of cash flows were not material for all periods presented.

In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. We adopted the new standard effective January 1, 2018 on a prospective basis. The new standard did not have a material impact on our consolidated financial statements.

In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02), which allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The new standard is effective for us beginning January 1, 2019, with early adoption permitted. We elected to early adopt the new standard at the beginning of the third quarter of 2018 using the aggregate portfolio approach. The amount of stranded tax effects that were reclassified from accumulated other comprehensive loss to retained earnings was not material.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), as amended, which generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. We will adopt the new standard effective January 1, 2019 on a modified retrospective basis and will not restate comparative periods. We will elect the package of practical expedients permitted under the transition guidance, which allows us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease, and our initial direct costs for any leases that exist prior to adoption of the new standard. We will also elect to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term. We estimate approximately $6 billion would be recognized as total right-of-use assets and total lease liabilities on our consolidated balance sheet as of January 1, 2019. Other than disclosed, we do not expect the new standard to have a material impact on our remaining consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance will be effective for us in the first quarter of 2020 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements.

Earnings per Share

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Earnings per Share

We compute earnings per share (EPS) of Class A and Class B common stock using the two-class method required for participating securities. We consider restricted stock awards to be participating securities because holders of such shares have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares.

Undistributed earnings allocated to participating securities are subtracted from net income in determining net income attributable to common stockholders. Basic EPS is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of our Class A and Class B common stock outstanding, adjusted for outstanding shares that are subject to repurchase.

For the calculation of diluted EPS, net income attributable to common stockholders for basic EPS is adjusted by the effect of dilutive securities, such as awards under our equity compensation plans and inducement awards under separate non-plan restricted stock unit (RSU) award agreements. In addition, the computation of the diluted EPS of Class A common stock assumes the conversion of our Class B common stock to Class A common stock, while the diluted EPS of Class B common stock does not assume the conversion of those shares to Class A common stock. Diluted EPS attributable to common stockholders is computed by dividing the resulting net income attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding.

RSUs with anti-dilutive effect were excluded from the EPS calculation and they were not material for the years ended December 31, 2018, 2017, and 2016, respectively.

Basic and diluted EPS are the same for each class of common stock because they are entitled to the same liquidation and dividend rights.

The numerators and denominators of the basic and diluted EPS computations for our common stock are calculated as follows (in millions, except per share amounts):



	Year Ended December 31,
	2018					2017					2016
	Class A		Class B			Class A		Class B			Class A		Class B
Basic EPS:
Numerator
Net income	$	18,411	$	3,701		$	13,034	$	2,900		$	8,270	$	1,947
Less: Net income attributable to participating securities	1		—			12		2			24		5
Net income attributable to common stockholders	$	18,410	$	3,701		$	13,022	$	2,898		$	8,246	$	1,942
Denominator
Weighted average shares outstanding	2,406		484			2,375		528			2,323		548
Less: Shares subject to repurchase	—		—			2		—			6		2
Number of shares used for basic EPS computation	2,406		484			2,373		528			2,317		546
Basic EPS	$	7.65	$	7.65		$	5.49	$	5.49		$	3.56	$	3.56
Diluted EPS:
Numerator
Net income attributable to common stockholders	$	18,410	$	3,701		$	13,022	$	2,898		$	8,246	$	1,942
Reallocation of net income attributable to participating securities	1		—			14		—			29		—
Reallocation of net income as a result of conversion of Class B to Class A common stock	3,701		—			2,898		—			1,942		—
Reallocation of net income to Class B common stock	—		(16		)	—		(13		)	—		14
Net income attributable to common stockholders for diluted EPS	$	22,112	$	3,685		$	15,934	$	2,885		$	10,217	$	1,956
Denominator
Number of shares used for basic EPS computation	2,406		484			2,373		528			2,317		546
Conversion of Class B to Class A common stock	484		—			528		—			546		—
Weighted average effect of dilutive securities:
Employee stock options	2		2			4		4			6		6
RSUs	29		1			49		3			49		5
Shares subject to repurchase and other	—		—			2		—			7		3
Number of shares used for diluted EPS computation	2,921		487			2,956		535			2,925		560
Diluted EPS	$	7.57	$	7.57		$	5.39	$	5.39		$	3.49	$	3.49

Cash and Cash Equivalents, and Marketable Securities

12 Months Ended

Dec. 31, 2018

Cash and Cash Equivalents, and Marketable Securities [Abstract]

Cash and Cash Equivalents, and Marketable Securities

The following table sets forth the cash and cash equivalents, and marketable securities (in millions):



	December 31,
	2018		2017
Cash and cash equivalents:
Cash	$	2,713	$	2,212
Money market funds	6,792		5,268
U.S. government securities	90		66
U.S. government agency securities	54		25
Certificate of deposits and time deposits	369		440
Corporate debt securities	1		68
Total cash and cash equivalents	10,019		8,079
Marketable securities:
U.S. government securities	13,836		12,766
U.S. government agency securities	8,333		10,944
Corporate debt securities	8,926		9,922
Total marketable securities	31,095		33,632
Total cash and cash equivalents, and marketable securities	$	41,114	$	41,711

The gross unrealized losses on our marketable securities were $357 million and $289 million as of December 31, 2018 and 2017, respectively. The gross unrealized gains for both periods were not significant. In addition, gross unrealized losses that had been in a continuous loss position for 12 months or longer were $332 million and $169 million as of December 31, 2018 and 2017, respectively. As of December 31, 2018, we considered the decreases in market value on our marketable securities to be temporary in nature and did not consider any of our investments to be other-than-temporarily impaired.

The following table classifies our marketable securities by contractual maturities (in millions):



	December 31,
	2018		2017
Due in one year	$	9,746	$	7,976
Due after one year to five years	21,349		25,656
Total	$	31,095	$	33,632

Fair Value Measurement

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurement

The following table summarizes, for assets or liabilities measured at fair value, the respective fair value and the classification by level of input within the fair value hierarchy (in millions):



			Fair Value Measurement at Reporting Date Using
Description	December 31, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	6,792	$	6,792	$	—	$	—
U.S. government securities	90		90		—		—
U.S. government agency securities	54		54		—		—
Certificate of deposits and time deposits	369		—		369		—
Corporate debt securities	1		—		1		—
Marketable securities:
U.S. government securities	13,836		13,836		—		—
U.S. government agency securities	8,333		8,333		—		—
Corporate debt securities	8,926		—		8,926		—
Total cash equivalents and marketable securities	$	38,401	$	29,105	$	9,296	$	—



			Fair Value Measurement at Reporting Date Using
Description	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3
Cash equivalents:
Money market funds	$	5,268	$	5,268	$	—	$	—
U.S. government securities	66		66		—		—
U.S. government agency securities	25		25		—		—
Certificate of deposits and time deposits	440		—		440		—
Corporate debt securities	68		—		68		—
Marketable securities:
U.S. government securities	12,766		12,766		—		—
U.S. government agency securities	10,944		10,944		—		—
Corporate debt securities	9,922		—		9,922		—
Total cash equivalents and marketable securities	$	39,499	$	29,069	$	10,430	$	—

We classify our cash equivalents and marketable securities within Level 1 or Level 2 because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consists of the following (in millions):



	December 31,
	2018			2017
Land	$	899		$	798
Buildings	7,401			4,909
Leasehold improvements	1,841			959
Network equipment	13,017			7,998
Computer software, office equipment and other	1,187			681
Construction in progress	7,228			2,992
Total	31,573			18,337
Less: Accumulated depreciation	(6,890		)	(4,616		)
Property and equipment, net	$	24,683		$	13,721

Depreciation expense on property and equipment was $3.68 billion, $2.33 billion, and $1.59 billion during 2018, 2017, and 2016, respectively.

Property and equipment as of December 31, 2018 and 2017 includes $1.06 billion and $533 million, respectively, acquired under capital lease agreements, of which a substantial majority, is included in network equipment. Accumulated depreciation of property and equipment acquired under these capital leases was $217 million and $101 million at December 31, 2018 and 2017, respectively.

Construction in progress includes costs mostly related to construction of data centers, network equipment infrastructure to support our data centers around the world, and office buildings. The construction of office buildings as of December 31, 2017 included our build-to-suit lease arrangements which were completed and derecognized during 2018.

No interest was capitalized during the years ended December 31, 2018, 2017 and 2016.

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

During the year ended December 31, 2018, we purchased certain intangible assets and completed several business acquisitions that were not material to our consolidated financial statements, either individually or in the aggregate. Accordingly, pro forma historical results of operations related to these business acquisitions during the year ended December 31, 2018 have not been presented. We have included the financial results of these business acquisitions in our consolidated financial statements from their respective dates of acquisition.

Goodwill generated from all business acquisitions completed during the year ended December 31, 2018 was primarily attributable to expected synergies from future growth and potential monetization opportunities. The amount of goodwill generated during this period that was deductible for tax purposes was not material.

The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows (in millions):



Balance as of December 31, 2016	$	18,122
Goodwill acquired	90
Effect of currency translation adjustment	9
Balance as of December 31, 2017	$	18,221
Goodwill acquired	88
Effect of currency translation adjustment	(8		)
Balance as of December 31, 2018	$	18,301

Intangible assets consist of the following (in millions):



		December 31, 2018							December 31, 2017
	Weighted-Average Remaining Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount

Acquired users	2.8	$	2,056	$	(1,260	)	$	796	$	2,056	$	(971	)	$	1,085
Acquired technology	1.2	1,002		(871		)	131		972		(711		)	261
Acquired patents	5.2	805		(565		)	240		785		(499		)	286
Trade names	1.4	629		(517		)	112		629		(406		)	223
Other	2.4	162		(147		)	15		162		(133		)	29
Total intangible assets	2.9	$	4,654	$	(3,360	)	$	1,294	$	4,604	$	(2,720	)	$	1,884

Amortization expense of intangible assets for the years ended December 31, 2018, 2017, and 2016 was $640 million, $692 million, and $751 million, respectively.

As of December 31, 2018, expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions):



2019	$	553
2020	378
2021	273
2022	33
2023	26
Thereafter	31
Total	$	1,294

Liabilities

12 Months Ended

Dec. 31, 2018

Accounts Payable and Accrued Liabilities [Abstract]

Liabilities

The components of accrued expenses and other current liabilities are as follows (in millions):



	December 31,
	2018		2017
Accrued compensation and benefits	$	1,203	$	790
Accrued property and equipment	1,531		685
Overdraft in cash pooling entities	500		—
Accrued taxes	491		340
Other current liabilities	1,784		1,077
Accrued expenses and other current liabilities	$	5,509	$	2,892

The components of other liabilities are as follows (in millions):



	December 31,
	2018		2017
Income tax payable	$	4,655	$	5,372
Deferred tax liabilities	673		50
Other liabilities	862		995
Other liabilities	$	6,190	$	6,417

Long-term Debt	12 Months Ended
Long-term Debt	Dec. 31, 2018
Debt Disclosure [Abstract]
Long-term Debt	Long-term Debt In May 2016, we entered into a $2.0 billion senior unsecured revolving credit facility, and any amounts outstanding under this facility will be due and payable on May 20, 2021. As of December 31, 2018, no amounts had been drawn down and we were in compliance with the covenants under this facility.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments

Leases

We have entered into various non-cancelable operating lease agreements for certain of our offices, data centers, land, and colocations with original lease periods expiring between 2019 and 2093. We are committed to pay a portion of the related actual operating expenses under certain of these lease agreements. Certain of these arrangements have free rent periods or escalating rent payment provisions, and we recognize rent expense under such arrangements on a straight-line basis.

The following is a schedule, by years, of the future minimum lease payments required under non-cancelable operating leases as of December 31, 2018 (in millions):



	Operating Leases
2019	$	698
2020	946
2021	1,055
2022	1,048
2023	1,054
Thereafter	9,850
Total minimum lease payments	$	14,651

Operating lease expense was $629 million, $363 million, and $269 million for the years ended December 31, 2018, 2017 and 2016, respectively. We fully repaid all our capital lease obligations during 2016.

Guarantee

In 2018, we established a multi-currency notional cash pool for certain of our entities with a third-party bank provider. Actual cash balances are not physically converted and are not commingled between participating legal entities. As part of the notional cash pool agreement, the bank extends overdraft credit to our participating entities as needed, provided that the overall notionally pooled balance of all accounts in the pool at the end of each day is at least zero. In the unlikely event of a default by our collective entities participating in the pool, any overdraft balances incurred would be guaranteed by Facebook, Inc.

Other contractual commitments

We also have $6.17 billion of non-cancelable contractual commitments as of December 31, 2018, primarily related to network infrastructure and our data center operations. These commitments are primarily due within five years.

Contingencies

Legal Matters

Beginning on March 20, 2018, multiple putative class actions and derivative actions were filed in state and federal courts in the United States and elsewhere against us and certain of our directors and officers alleging violations of securities laws, breach of fiduciary duties, and other causes of action in connection with our platform and user data practices as well as the misuse of certain data by a developer that shared such data with third parties in violation of our terms and policies, and seeking unspecified damages and injunctive relief. Beginning on July 27, 2018, two putative class actions were filed in federal court in the United States against us and certain of our directors and officers alleging violations of securities laws in connection with the disclosure of our earnings results for the second quarter of 2018, and seeking unspecified damages. These two actions subsequently were transferred and consolidated in the U.S. District Court for the Northern District of California with the putative securities class action described above relating to our platform and user data practices. We believe these lawsuits are without merit, and we are vigorously defending them. In addition, our platform and user data practices, as well as the events surrounding the misuse of certain data by a developer, became the subject of U.S. Federal Trade Commission, Securities and Exchange Commission, state attorneys general, and other government inquiries in the United States, Europe, and other jurisdictions.

Beginning on September 28, 2018, multiple putative class actions were filed in state and federal courts in the United States and elsewhere against us alleging violations of consumer protection laws and other causes of action in connection with a third-party cyber-attack that exploited a vulnerability in Facebook’s code to steal user access tokens and access certain profile information from user accounts on Facebook, and seeking unspecified damages and injunctive relief. We believe these lawsuits are without merit, and we are vigorously defending them. In addition, the events surrounding this cyber-attack became the subject of Irish Data Protection Commission, U.S. Federal Trade Commission and other government inquiries in the United States, Europe, and other jurisdictions.

In addition, from time to time, we are subject to litigation and other proceedings involving law enforcement and other regulatory agencies, including in particular in Brazil and Europe, in order to ascertain the precise scope of our legal obligations to comply with the requests of those agencies, including our obligation to disclose user information in particular circumstances. A number of such instances have resulted in the assessment of fines and penalties against us. We believe we have multiple legal grounds to satisfy these requests or prevail against associated fines and penalties, and we intend to vigorously defend such fines and penalties.

Although we believe that it is reasonably possible that we may incur a substantial loss in some of the cases, actions, or inquiries described above, we are currently unable to estimate the amount of such losses or a range of possible losses.

We are also party to various other legal proceedings, claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business. With respect to these matters, we evaluate the developments on a regular basis and accrue a liability when we believe a loss is probable and the amount can be reasonably estimated.

We believe that the amount or any estimable range of reasonably possible or probable loss will not, either individually or in the aggregate, have a material adverse effect on our business and consolidated financial statements. However, the outcome of these matters is inherently uncertain. Therefore, if one or more of these matters were resolved against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected.

For information regarding income tax contingencies, see Note 12—Income Taxes.

Indemnifications

In the normal course of business, to facilitate transactions of services and products, we have agreed to indemnify certain parties with respect to certain matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, we have entered into indemnification agreements with our officers, directors, and certain employees, and our certificate of incorporation and bylaws contain similar indemnification obligations.

It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by us under these agreements have not had a material impact on our consolidated financial statements. In our opinion, as of December 31, 2018, there was not at least a reasonable possibility we had incurred a material loss with respect to indemnification of such parties. We have not recorded any liability for costs related to indemnification through December 31, 2018.

Stockholders' Equity

12 Months Ended

Dec. 31, 2018

Equity [Abstract]

Stockholders' Equity

Common Stock

Our certificate of incorporation authorizes the issuance of Class A common stock and Class B common stock. As of December 31, 2018, we are authorized to issue 5,000 million shares of Class A common stock and 4,141 million shares of Class B common stock, each with a par value of $0.000006 per share. Holders of our Class A common stock and Class B common stock are entitled to dividends when, as and if, declared by our board of directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. As of December 31, 2018, we have not declared any dividends and our credit facility contains restrictions on our ability to pay dividends. The holder of each share of Class A common stock is entitled to one vote, while the holder of each share of Class B common stock is entitled to ten votes. Shares of our Class B common stock are convertible into an equivalent number of shares of our Class A common stock and generally convert into shares of our Class A common stock upon transfer. Class A common stock and Class B common stock are referred to as common stock throughout the notes to these financial statements, unless otherwise noted.

As of December 31, 2018, there were 2,385 million shares and 469 million shares of Class A common stock and Class B common stock, respectively, issued and outstanding.

Share Repurchase Program

Our board of directors has authorized a share repurchase program that commenced in 2017 and does not have an expiration date. During the second quarter of 2018, we completed repurchases under the original authorization to purchase up to $6.0 billion of our Class A common stock. In April 2018, the authorization for the repurchase of our Class A common stock was increased by an additional $9.0 billion, and we completed repurchases under this authorization during the fourth quarter of 2018. During the year ended December 31, 2018, we repurchased and subsequently retired 79 million shares of our Class A common stock for $12.93 billion.

In December 2018, our board of directors authorized an additional $9.0 billion of repurchases under this program. The timing and actual number of shares repurchased under this program depend on a variety of factors, including price, general business and market conditions, and other investment opportunities, and shares may be repurchased through open market purchases or privately negotiated transactions, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. As of December 31, 2018, $9.0 billion remained available and authorized for repurchases.

Share-based Compensation Plans

We maintain two share-based employee compensation plans: the 2012 Equity Incentive Plan, which was amended in each of June 2016 and February 2018 (Amended 2012 Plan), and the 2005 Stock Plan (collectively, Stock Plans). Our Amended 2012 Plan serves as the successor to our 2005 Stock Plan and provides for the issuance of incentive and nonstatutory stock options, restricted stock awards, stock appreciation rights, RSUs, performance shares, and stock bonuses to qualified employees, directors and consultants. Outstanding awards under the 2005 Stock Plan continue to be subject to the terms and conditions of the 2005 Stock Plan. Shares that are withheld in connection with the net settlement of RSUs or forfeited under our Stock Plans are added to the reserves of the Amended 2012 Plan. We account for forfeitures as they occur.

As of December 31, 2018, there were 83 million shares reserved for future issuance under our Amended 2012 Plan. The number of shares reserved for issuance under our Amended 2012 Plan increases automatically on January 1 of each of the calendar years during the term of the Amended 2012 Plan, which will continue through April 2026 unless terminated earlier by our board of directors or a committee thereof, by a number of shares of Class A common stock equal to the lesser of (i) 2.5% of the total issued and outstanding shares of our Class A common stock as of the immediately preceding December 31st or (ii) a number of shares determined by our board of directors. Pursuant to this automatic increase provision, our board of directors approved an increase of 60 million shares reserved for issuance effective January 1, 2019.

The following table summarizes the activities of stock option awards under the Stock Plans for the year ended December 31, 2018:



	Shares Subject to Options Outstanding
	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value⁽¹⁾
	(in thousands)				(in years)	(in millions)
Balance as of December 31, 2017	3,078		$	10.06
Stock options exercised	(1,941	)	$	7.90
Balances at December 31, 2018	1,137		$	13.74	1.7	$	133
Stock options exercisable as of December 31, 2018	1,137		$	13.74	1.7	$	133


(1)	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the official closing price of our Class A common stock of $131.09, as reported on the Nasdaq Global Select Market on December 31, 2018.

There were no options granted, forfeited, or canceled for the year ended December 31, 2018. The aggregate intrinsic value of the options exercised in the years ended December 31, 2018, 2017, and 2016 was $315 million, $359 million, and $309 million, respectively. The total grant date fair value of stock options vested during the years ended December 31, 2018, 2017, and 2016 was not material.

The following table summarizes the activities for our unvested RSUs for the year ended December 31, 2018:



	Unvested RSUs⁽¹⁾
	Number of Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested at December 31, 2017	81,214		$	110.49
Granted	38,283		$	168.38
Vested	(43,396	)	$	106.59
Forfeited	(8,803	)	$	119.25
Unvested at December 31, 2018	67,298		$	144.77


(1)	Unvested shares at December 31, 2017 included an inducement award issued in connection with the WhatsApp acquisition in 2014, which was subject to the terms, restrictions, and conditions of a separate non-plan RSU award agreement. This inducement award was no longer outstanding as of December 31, 2018.

The fair value as of the respective vesting dates of RSUs that vested during the years ended December 31, 2018, 2017, and 2016 was $7.57 billion, $6.76 billion, and $4.92 billion, respectively.

As of December 31, 2018, there was $8.96 billion of unrecognized share-based compensation expense, which was related to RSUs. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately three years based on vesting under the award service conditions.

Interest and other income (expense), net

12 Months Ended

Dec. 31, 2018

Nonoperating Income (Expense) [Abstract]

Interest and other income (expense), net

The following table presents the detail of interest and other income (expense), net, for the periods presented (in millions):



	Year Ended December 31,
	2018			2017			2016
Interest income	$	661		$	398		$	176
Interest expense	(9		)	(6		)	(10		)
Foreign currency exchange losses, net	(213		)	(6		)	(76		)
Other	9			5			1
Interest and other income (expense), net	$	448		$	391		$	91

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

The components of income before provision for income taxes for the years ended December 31, 2018, 2017, and 2016 are as follows (in millions):



	Year Ended December 31,
	2018		2017		2016
Domestic	$	8,800	$	7,079	$	6,368
Foreign	16,561		13,515		6,150
Income before provision for income taxes	$	25,361	$	20,594	$	12,518

The provision for income taxes consisted of the following (in millions):



	Year Ended December 31,
	2018			2017			2016
Current:
Federal	$	1,747		$	4,455		$	2,384
State	176			190			179
Foreign	1,031			389			195
Total current tax expense	2,954			5,034			2,758
Deferred:
Federal	316			(296		)	(414		)
State	34			(33		)	(18		)
Foreign	(55		)	(45		)	(25		)
Total deferred tax expense/(benefits)	295			(374		)	(457		)
Provision for income taxes	$	3,249		$	4,660		$	2,301

A reconciliation of the U.S. federal statutory income tax rate of 21.0% to our effective tax rate is as follows (in percentages):



	Year Ended December 31,
	2018		2017		2016
U.S. federal statutory income tax rate	21.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	0.7		0.6		1.0
Research tax credits	(1.0	)	(0.9	)	(0.7	)
Share-based compensation	0.3		0.4		1.0
Excess tax benefits related to share-based compensation	(2.6	)	(5.8	)	(7.0	)
Effect of non-U.S. operations	(5.9	)	(18.6	)	(12.8	)
Effect of U.S. tax law change ⁽¹⁾	—		11.0		—
Other	0.3		0.9		1.9
Effective tax rate	12.8	%	22.6	%	18.4	%


(1)	Due to the Tax Act which was enacted in December 2017, provisional one-time mandatory transition tax on accumulated foreign earnings was accrued as of December 31, 2017. In addition, deferred taxes were derecognized for previous estimated tax liabilities that would arise upon repatriation of a portion of these earnings in the foreign jurisdictions.

Our deferred tax assets (liabilities) are as follows (in millions):



	December 31,
	2018			2017
Deferred tax assets:
Net operating loss carryforward	$	1,825		$	1,300
Tax credit carryforward	668			509
Share-based compensation	270			385
Accrued expenses and other liabilities	487			381
Other	153			131
Total deferred tax assets	3,403			2,706
Less: valuation allowance	(600		)	(438		)
Deferred tax assets, net of valuation allowance	2,803			2,268

Deferred tax liabilities:
Depreciation and amortization	(1,401		)	(622		)
Purchased intangible assets	(195		)	(309		)
Deferred taxes on foreign income	—			(88		)
Total deferred tax liabilities	(1,596		)	(1,019		)
Net deferred tax assets	$	1,207		$	1,249

The Tax Act reduces the U.S. statutory corporate tax rate from 35% to 21% for our tax years beginning in 2018, which resulted in the re-measurement of the federal portion of our deferred tax assets as of December 31, 2017 from the 35% to 21% tax rate. The valuation allowance was approximately $600 million and $438 million as of December 31, 2018 and 2017, respectively, mostly related to state tax credits that we do not believe will ultimately be realized.

In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As a result, we previously provided a provisional estimate of the effect of the Tax Act in our financial statements. In the fourth quarter of 2018, we completed our analysis to determine the effect of the Tax Act and recorded immaterial adjustments as of December 31, 2018.

As of December 31, 2018, the U.S. federal and state net operating loss carryforwards were $7.88 billion and $2.22 billion, which will begin to expire in 2033 and 2032, respectively, if not utilized. We have federal tax credit carryforwards of $290 million, which will begin to expire in 2033, if not utilized, and state tax credit carryforwards of $1.91 billion, most of which do not expire.

Utilization of our net operating loss and tax credit carryforwards may be subject to substantial annual limitations due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such annual limitations could result in the expiration of the net operating loss and tax credit carryforwards before their utilization. The events that may cause ownership changes include, but are not limited to, a cumulative stock ownership change of greater than 50% over a three-year period.

The Tax Act imposes a mandatory transition tax on accumulated foreign earnings and generally eliminates US taxes on foreign subsidiary distribution. As a result, earnings in foreign jurisdictions are available for distribution to the U.S. without incremental U.S. taxes.

The following table reflects changes in the gross unrecognized tax benefits (in millions):



	Year Ended December 31,
	2018			2017			2016
Gross unrecognized tax benefits-beginning of period	$	3,870		$	3,309		$	3,017
Increases related to prior year tax positions	457			72			32
Decreases related to prior year tax positions	(396		)	(34		)	(36		)
Increases related to current year tax positions	831			536			307
Decreases related to settlements of prior year tax positions	(84		)	(13		)	(11		)
Gross unrecognized tax benefits-end of period	$	4,678		$	3,870		$	3,309

During all years presented, we recognized interest and penalties related to unrecognized tax benefits within the provision for income taxes on the consolidated statements of income. The amount of interest and penalties accrued as of December 31, 2018 and 2017 was $340 million and $154 million, respectively.

If the balance of gross unrecognized tax benefits of $4.68 billion as of December 31, 2018 were realized in a future period, this would result in a tax benefit of $2.94 billion within our provision of income taxes at such time.

On July 27, 2015, the United States Tax Court (Tax Court) issued an opinion in Altera Corp. v. Commissioner (Tax Court Opinion), which concluded that related parties in a cost sharing arrangement are not required to share expenses related to share-based compensation. The Tax Court Opinion was appealed by the Commissioner to the Ninth Circuit Court of Appeals (Ninth Circuit). On July 24, 2018, the Ninth Circuit issued an opinion (Ninth Circuit Opinion) that reversed the Tax Court Opinion. The Ninth Circuit Opinion was subsequently withdrawn and the case is being reheard. Since the Ninth Circuit Opinion was withdrawn, we continue to treat our share-based compensation expense in accordance with the Tax Court Opinion. We also continue to monitor developments in this case and any impact the final opinion could have on our consolidated financial statements.

We are subject to taxation in the United States and various other state and foreign jurisdictions. The material jurisdictions in which we are subject to potential examination include the United States and Ireland. We are under examination by the Internal Revenue Service (IRS) for our 2014 through 2016 tax years and by the Ireland tax authorities for our 2012 through 2015 tax years. Our 2017 tax year remains open to examination by the IRS. Our 2016 and subsequent tax years remain open to examination in Ireland.

In July 2016, we received a Statutory Notice of Deficiency (Notice) from the IRS related to transfer pricing with our foreign subsidiaries in conjunction with the examination of the 2010 tax year. While the Notice applies only to the 2010 tax year, the IRS states that it will also apply its position for tax years subsequent to 2010, which, if the IRS prevails in its position, could result in an additional federal tax liability of an estimated, aggregate amount of approximately up to $5.0 billion in excess of the amounts in our originally filed U.S. return, plus interest and any penalties asserted. We do not agree with the position of the IRS and have filed a petition in the Tax Court challenging the Notice. As of December 31, 2018, we have not resolved this matter, and proceedings continue in the Tax Court. In March 2018, we received a second Notice from the IRS in conjunction with the examination of our 2011 through 2013 tax years. The IRS applied its position from the 2010 tax year to each of these years and also proposed new adjustments related to other transfer pricing with our foreign subsidiaries and certain tax credits that we claimed. If the IRS prevails in its position for these new adjustments, this could result in an additional federal tax liability of up to approximately $680 million in excess of the amounts in our originally filed U.S. return, plus interest and any penalties asserted. We do not agree with the positions of the IRS in the second Notice and have filed a petition in the Tax Court challenging the second Notice. We have previously accrued an estimated unrecognized tax benefit consistent with the guidance in ASC 740 that is lower than the potential additional federal tax liability from the positions taken by the IRS in the two Notices. In addition, if the IRS prevails in its positions related to transfer pricing with our foreign subsidiaries, the additional tax that we would owe would be partially offset by a reduction in the tax that we owe under the mandatory transition tax on accumulated foreign earnings from the Tax Act.

We believe that adequate amounts have been reserved in accordance with ASC 740 for any adjustments to the provision for income taxes or other tax items that may ultimately result from these examinations. The timing of the resolution, settlement, and closure of any audits is highly uncertain, and it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months. Given the number of years remaining that are subject to examination, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits. If the taxing authorities prevail in the assessment of additional tax due, the assessed tax, interest, and penalties, if any, could have a material adverse impact on our financial position, results of operations, and cash flows.

Geographical Information

12 Months Ended

Dec. 31, 2018

Segments, Geographical Areas [Abstract]

Geographical Information

The following table sets forth property and equipment, net by geographic area (in millions):



	December 31,
	2018		2017
Property and equipment, net:
United States	$	18,950	$	10,406
Rest of the world⁽¹⁾	5,733		3,315
Total property and equipment, net	$	24,683	$	13,721

(1) No individual country, other than disclosed above, exceeded 10% of our total property and equipment, net for any period presented.

For information regarding revenue disaggregated by geography, see Note 1—Summary of Significant Accounting Policies, Revenue Recognition.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation

We prepared the consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts of Facebook, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

Use of Estimates

Conformity with GAAP requires the use of estimates and judgments that affect the reported amounts in the consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, those related to income taxes, loss contingencies, fair value of acquired intangible assets and goodwill, collectability of accounts receivable, fair value of financial instruments, leases, useful lives of intangible assets and property and equipment, and revenue recognition. These estimates are based on management's knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ materially from those estimates.

Revenue Recognition

Under Topic 606, revenue is 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.

We determine revenue recognition through the following steps:


•	identification of the contract, or contracts, with a customer;


•	identification of the performance obligations in the contract;


•	determination of the transaction price;


•	allocation of the transaction price to the performance obligations in the contract; and


•	recognition of revenue when, or as, we satisfy a performance obligation.

Revenue excludes sales and usage-based taxes where it has been determined that we are acting as a pass-through agent.

Advertising

Advertising revenue is generated by displaying ad products on Facebook, Instagram, Messenger, and third-party affiliated websites or mobile applications. Marketers pay for ad products either directly or through their relationships with advertising agencies or resellers, based on the number of impressions delivered or the number of actions, such as clicks, taken by our users.

Revenue is 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. We recognize revenue from the display of impression-based ads in the contracted period in which the impressions are delivered. Impressions are considered delivered when an ad is displayed to users. We recognize revenue from the delivery of action-based ads in the period in which a user takes the action the marketer contracted for. For advertising revenue arrangements where we are not the principal, we recognize revenue on a net basis.

We may accept a lower consideration than the amount promised per the contract for certain revenue transactions and certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration when estimating the amount of revenue to recognize. We believe that there will not be significant changes to our estimates of variable consideration.

Payments and Other Fees

Payments revenue is comprised of the net fee we receive from developers using our Payments infrastructure.

Other fees revenue consists primarily of revenue from the delivery of consumer hardware devices, as well as revenue from various other sources.

Deferred Revenue and Deposits

Deferred revenue consists of billings and payments from marketers in advance of revenue recognition. Deposits relate to unused balances held on behalf of our users who primarily use these balances to make purchases in games on our platform. Once this balance is utilized by a user, approximately 70% of this amount would then be payable to the developer and the balance would be recognized as revenue. The increase in the deferred revenue balance for the year ended December 31, 2018 was driven by prepayments from marketers, partially offset by revenue recognized that was included in the deferred revenue balance at the beginning of the period.

Our payment terms vary by the products or services offered. The term between billings 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.

Deferred revenue and deposits consists of the following (in millions):



	December 31,
	2018		2017
Deferred revenue	$	117	$	68
Deposits	30		30
Total deferred revenue and deposits	$	147	$	98

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 marketing and sales on our consolidated statements of income.

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.

Cost of Revenue

Our cost of revenue consists primarily of expenses associated with the delivery and distribution of our products. These include expenses related to the operation of our data centers, such as facility and server equipment depreciation, salaries, benefits, and share-based compensation for employees on our operations teams, and energy and bandwidth costs. Cost of revenue also includes costs associated with partner arrangements, including traffic acquisition and content acquisition costs, credit card and other transaction fees related to processing customer transactions, and cost of consumer hardware device inventory sold.

Content acquisition costs

We license and pay to produce content in order to increase engagement on the platform. For licensed content, we capitalize the fee per title and record a corresponding liability at the gross amount of the liability when the license period begins, the cost of the title is known and the title is accepted and available for viewing. The amounts capitalized are limited to estimated net realizable value or fair value on a per title basis. The portion available for viewing within one year is recognized as prepaid expenses and other current assets and the remaining portion as other assets on the consolidated balance sheets. For original content, we capitalize costs associated with the production, including development costs and direct costs, if those amounts are recoverable. Capitalized original content costs are included in other assets on the consolidated balance sheets. Capitalized costs are amortized in cost of revenue on the consolidated statements of income based on historical and estimated viewing patterns.

Capitalized content costs are reviewed when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than amortized cost. If such changes are identified, capitalized content assets will be stated at the lower of unamortized cost, net realizable value or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off.

Income Taxes

We record provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred income tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as for loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We recognize the deferred income tax effects of a change in tax rates in the period of the enactment.

We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance.

We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. These uncertain tax positions include our estimates for transfer pricing that have been developed based upon analyses of appropriate arms-length prices. Similarly, our estimates related to uncertain tax positions concerning research tax credits are based on an assessment of whether our available documentation corroborating the nature of our activities supporting the tax credits will be sufficient. Although we believe that we have adequately reserved for our uncertain tax positions (including net interest and penalties), we can provide no assurance that the final tax outcome of these matters will not be materially different. We make adjustments to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial position, results of operations, and cash flows.

On December 22, 2017, the 2017 Tax Cuts and Jobs Act (Tax Act) was enacted into law and the new legislation contains several key tax provisions that affected us, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, re-measuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As a result, we previously provided a provisional estimate of the effect of the Tax Act in our financial statements. In the fourth quarter of 2018, we completed our analysis to determine the effect of the Tax Act and recorded immaterial adjustments as of December 31, 2018.

Advertising Expense

Advertising costs are expensed when incurred and are included in marketing and sales expenses in the accompanying consolidated statements of income.

Cash and Cash Equivalents, and Marketable Securities, and Restricted Cash

Cash and Cash Equivalents, Marketable Securities, and Restricted Cash

Cash and cash equivalents primarily consist of cash on deposit with banks and investments in money market funds with maturities of 90 days or less from the date of purchase.

We hold investments in marketable securities, consisting of U.S. government securities, U.S. government agency securities, and corporate debt securities. We classify our marketable securities as available-for-sale investments in our current assets because they represent investments of cash available for current operations. Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses, net of taxes, included in accumulated other comprehensive income (loss) in stockholders' equity. Unrealized losses are charged against interest and other income (expense), net when a decline in fair value is determined to be other-than-temporary. We have not recorded any such impairment charge in the periods presented. We determine realized gains or losses on sale of marketable securities on a specific identification method, and record such gains or losses as interest and other income (expense), net.

We also maintain a multi-currency notional cash pool for our participating entities with a third-party bank provider. Actual cash balances are not physically converted and are not commingled between participating legal entities. As part of the notional cash pool agreement, the bank extends overdraft credit to our participating entities as needed, provided that the overall notionally pooled balance of all accounts in the pool at the end of each day is at least zero. We classify these overdraft balances within accrued expenses and other current liabilities on the accompanying consolidated balance sheets.

We classify certain restricted cash balances within prepaid expenses and other current assets and other assets on the accompanying consolidated balance sheets based upon the term of the remaining restrictions.

Fair Value of Financial Instruments

We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1-Quoted prices in active markets for identical assets or liabilities.

Level 2-Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3-Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability.

Our valuation techniques used to measure the fair value of money market funds and marketable debt securities were derived from quoted market prices or alternative pricing sources and models utilizing market observable inputs.

Accounts Receivable and Allowances

Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers.

Property and Equipment

Property and equipment, which includes amounts recorded under capital leases, are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or the remaining lease term, whichever is shorter.

The estimated useful lives of property and equipment are described below:



Property and Equipment		Useful Life
Network equipment		Three to 25 years
Buildings		Three to 30 years
Computer software, office equipment and other		Two to five years
Leased equipment and leasehold improvements		Lesser of estimated useful life or remaining lease term

Land and assets held within construction in progress are not depreciated. Construction in progress is related to the construction or development of property and equipment that have not yet been placed in service for their intended use.

The cost of maintenance and repairs is expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in income from operations.

Lease Obligations

We enter into lease arrangements for office space, land, facilities, data centers, and equipment under non-cancelable capital and operating leases. Certain of the operating lease agreements contain rent holidays, rent escalation provisions, and purchase options. Rent holidays and rent escalation provisions are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease inception.

We record assets and liabilities for the estimated construction costs incurred by third parties under build-to-suit lease arrangements to the extent that we are involved in the construction of structural improvements or bear construction risk prior to commencement of a lease.

Loss Contingencies

We are involved in legal proceedings, claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is both 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 possible loss in the notes to the consolidated financial statements.

We review the developments in our contingencies that could affect the amount of the provisions that has been previously recorded, and the matters and related possible losses disclosed. We make adjustments to our provisions and changes to our disclosures accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Significant judgment is required to determine both the probability and the estimated amount.

Business Combinations

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Long-Lived Assets, Including Goodwill and Other Acquired Intangible Assets

We evaluate the recoverability of property and equipment and finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. We have not recorded any significant impairment charges during the years presented.

We review goodwill for impairment at least annually or more frequently if events or changes in circumstances would more likely than not reduce the fair value of our single reporting unit below its carrying value. As of December 31, 2018, no impairment of goodwill has been identified.

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. We routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we reduce the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life.

Foreign Currency

Generally, the functional currency of our international subsidiaries is the local currency. We translate the financial statements of these subsidiaries to U.S. dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenue, costs, and expenses. Translation gains and losses are recorded in accumulated other comprehensive (loss) income as a component of stockholders' equity. As of December 31, 2018 and 2017, we had a cumulative translation loss, net of tax of $466 million and $16 million, respectively. Net losses resulting from foreign exchange transactions were $213 million, $6 million, and $76 million for the years ended December 31, 2018, 2017, and 2016, respectively. These losses were recorded as interest and other income (expense), net in our consolidated statements of income.

Credit Risk and Concentration

Our financial instruments that are potentially subject to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, marketable securities, and accounts receivable. The majority of cash equivalents consists of short-term money market funds, which are managed by reputable financial institutions. Marketable securities consist of investments in U.S. government securities, U.S. government agency securities, and corporate debt securities. Our investment policy limits investment instruments to U.S. government securities, U.S. government agency securities, and corporate debt securities with the main objective of preserving capital and maintaining liquidity.

Accounts receivable are typically unsecured and are derived from revenue earned from customers across different industries and countries. We generated 43%, 44%, and 46% of our revenue for the years ended December 31, 2018, 2017, and 2016, respectively, from marketers and developers based in the United States, with the majority of revenue outside of the United States coming from customers located in western Europe, China, Canada, Australia, and Brazil.

We perform ongoing credit evaluations of our customers, and generally do not require collateral. We maintain an allowance for estimated credit losses. During the years ended December 31, 2018, 2017, and 2016, our bad debt expenses were $77 million, $48 million, and $66 million, respectively. In the event that accounts receivable collection cycles deteriorate, our operating results and financial position could be adversely affected.

Segments

Our chief operating decision-maker is our Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for operations, operating results, and planning for levels or components below the consolidated unit level. Accordingly, we have determined that we have a single reportable segment and operating segment structure.

Recent Accounting Pronouncements Adopted and Not Yet Adopted

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Topic 606, which supersedes the revenue recognition requirements in Topic 605. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. See Revenue Recognition above for further details.

In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers Other than Inventory (ASU 2016-16), which requires companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. We adopted the new standard effective January 1, 2018, using the modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the effective date, which was not material to our consolidated financial statements.

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statements of cash flows. We adopted the new standard effective January 1, 2018, using the retrospective transition approach. The reclassified restricted cash balances from investing activities to changes in cash, cash equivalents and restricted cash on the consolidated statements of cash flows were not material for all periods presented.

In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. We adopted the new standard effective January 1, 2018 on a prospective basis. The new standard did not have a material impact on our consolidated financial statements.

In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02), which allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The new standard is effective for us beginning January 1, 2019, with early adoption permitted. We elected to early adopt the new standard at the beginning of the third quarter of 2018 using the aggregate portfolio approach. The amount of stranded tax effects that were reclassified from accumulated other comprehensive loss to retained earnings was not material.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), as amended, which generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. We will adopt the new standard effective January 1, 2019 on a modified retrospective basis and will not restate comparative periods. We will elect the package of practical expedients permitted under the transition guidance, which allows us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease, and our initial direct costs for any leases that exist prior to adoption of the new standard. We will also elect to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term. We estimate approximately $6 billion would be recognized as total right-of-use assets and total lease liabilities on our consolidated balance sheet as of January 1, 2019. Other than disclosed, we do not expect the new standard to have a material impact on our remaining consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance will be effective for us in the first quarter of 2020 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Disaggregation of Revenue

Revenue disaggregated by revenue source for the years ended December 31, 2018, 2017 and 2016 consists of the following (in millions):



	Year Ended December 31,
	2018		2017⁽¹⁾		2016 ⁽¹⁾
Advertising	$	55,013	$	39,942	$	26,885
Payments and other fees	825		711		753
Total revenue	$	55,838	$	40,653	$	27,638

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

Revenue disaggregated by geography, based on the billing address of our customer, consists of the following (in millions):



	Year Ended December 31,
	2018		2017⁽¹⁾		2016 ⁽¹⁾
Revenue:
US & Canada⁽²⁾	$	25,727	$	19,065	$	13,432
Europe⁽³⁾	13,631		10,126		6,792
Asia-Pacific	11,733		7,921		5,037
Rest of World⁽³⁾	4,747		3,541		2,377
Total revenue	$	55,838	$	40,653	$	27,638

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

^{(2) United States revenue was}^{$24.10 billion}^,^{$17.73 billion}^{, and}^{$12.58 billion}^{for the}^{years ended}^{December 31, 2018}^,²⁰¹⁷^{, and}²⁰¹⁶^.

^{(3) Europe includes Russia and Turkey, and Rest of World includes Africa, Latin America, and the Middle East.}

Deferred Revenue and Deposits

Deferred revenue and deposits consists of the following (in millions):



	December 31,
	2018		2017
Deferred revenue	$	117	$	68
Deposits	30		30
Total deferred revenue and deposits	$	147	$	98

Estimated Useful Lives of Property and Equipment

The estimated useful lives of property and equipment are described below:



Property and Equipment		Useful Life
Network equipment		Three to 25 years
Buildings		Three to 30 years
Computer software, office equipment and other		Two to five years
Leased equipment and leasehold improvements		Lesser of estimated useful life or remaining lease term

Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Numerators and Denominators of Basic and Diluted EPS Computations for Common Stock

The numerators and denominators of the basic and diluted EPS computations for our common stock are calculated as follows (in millions, except per share amounts):



	Year Ended December 31,
	2018					2017					2016
	Class A		Class B			Class A		Class B			Class A		Class B
Basic EPS:
Numerator
Net income	$	18,411	$	3,701		$	13,034	$	2,900		$	8,270	$	1,947
Less: Net income attributable to participating securities	1		—			12		2			24		5
Net income attributable to common stockholders	$	18,410	$	3,701		$	13,022	$	2,898		$	8,246	$	1,942
Denominator
Weighted average shares outstanding	2,406		484			2,375		528			2,323		548
Less: Shares subject to repurchase	—		—			2		—			6		2
Number of shares used for basic EPS computation	2,406		484			2,373		528			2,317		546
Basic EPS	$	7.65	$	7.65		$	5.49	$	5.49		$	3.56	$	3.56
Diluted EPS:
Numerator
Net income attributable to common stockholders	$	18,410	$	3,701		$	13,022	$	2,898		$	8,246	$	1,942
Reallocation of net income attributable to participating securities	1		—			14		—			29		—
Reallocation of net income as a result of conversion of Class B to Class A common stock	3,701		—			2,898		—			1,942		—
Reallocation of net income to Class B common stock	—		(16		)	—		(13		)	—		14
Net income attributable to common stockholders for diluted EPS	$	22,112	$	3,685		$	15,934	$	2,885		$	10,217	$	1,956
Denominator
Number of shares used for basic EPS computation	2,406		484			2,373		528			2,317		546
Conversion of Class B to Class A common stock	484		—			528		—			546		—
Weighted average effect of dilutive securities:
Employee stock options	2		2			4		4			6		6
RSUs	29		1			49		3			49		5
Shares subject to repurchase and other	—		—			2		—			7		3
Number of shares used for diluted EPS computation	2,921		487			2,956		535			2,925		560
Diluted EPS	$	7.57	$	7.57		$	5.39	$	5.39		$	3.49	$	3.49

Cash and Cash Equivalents, and Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2018

Cash and Cash Equivalents, and Marketable Securities [Abstract]

Cash, Cash Equivalents and Marketable Securities

The following table sets forth the cash and cash equivalents, and marketable securities (in millions):



	December 31,
	2018		2017
Cash and cash equivalents:
Cash	$	2,713	$	2,212
Money market funds	6,792		5,268
U.S. government securities	90		66
U.S. government agency securities	54		25
Certificate of deposits and time deposits	369		440
Corporate debt securities	1		68
Total cash and cash equivalents	10,019		8,079
Marketable securities:
U.S. government securities	13,836		12,766
U.S. government agency securities	8,333		10,944
Corporate debt securities	8,926		9,922
Total marketable securities	31,095		33,632
Total cash and cash equivalents, and marketable securities	$	41,114	$	41,711

Marketable Securities by Contractual Maturities

The following table classifies our marketable securities by contractual maturities (in millions):



	December 31,
	2018		2017
Due in one year	$	9,746	$	7,976
Due after one year to five years	21,349		25,656
Total	$	31,095	$	33,632

Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes, for assets or liabilities measured at fair value, the respective fair value and the classification by level of input within the fair value hierarchy (in millions):



			Fair Value Measurement at Reporting Date Using
Description	December 31, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	6,792	$	6,792	$	—	$	—
U.S. government securities	90		90		—		—
U.S. government agency securities	54		54		—		—
Certificate of deposits and time deposits	369		—		369		—
Corporate debt securities	1		—		1		—
Marketable securities:
U.S. government securities	13,836		13,836		—		—
U.S. government agency securities	8,333		8,333		—		—
Corporate debt securities	8,926		—		8,926		—
Total cash equivalents and marketable securities	$	38,401	$	29,105	$	9,296	$	—



			Fair Value Measurement at Reporting Date Using
Description	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3
Cash equivalents:
Money market funds	$	5,268	$	5,268	$	—	$	—
U.S. government securities	66		66		—		—
U.S. government agency securities	25		25		—		—
Certificate of deposits and time deposits	440		—		440		—
Corporate debt securities	68		—		68		—
Marketable securities:
U.S. government securities	12,766		12,766		—		—
U.S. government agency securities	10,944		10,944		—		—
Corporate debt securities	9,922		—		9,922		—
Total cash equivalents and marketable securities	$	39,499	$	29,069	$	10,430	$	—

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consists of the following (in millions):



	December 31,
	2018			2017
Land	$	899		$	798
Buildings	7,401			4,909
Leasehold improvements	1,841			959
Network equipment	13,017			7,998
Computer software, office equipment and other	1,187			681
Construction in progress	7,228			2,992
Total	31,573			18,337
Less: Accumulated depreciation	(6,890		)	(4,616		)
Property and equipment, net	$	24,683		$	13,721

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows (in millions):



Balance as of December 31, 2016	$	18,122
Goodwill acquired	90
Effect of currency translation adjustment	9
Balance as of December 31, 2017	$	18,221
Goodwill acquired	88
Effect of currency translation adjustment	(8		)
Balance as of December 31, 2018	$	18,301

Schedule of Finite-Lived Intangible Assets

Intangible assets consist of the following (in millions):



		December 31, 2018							December 31, 2017
	Weighted-Average Remaining Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount

Acquired users	2.8	$	2,056	$	(1,260	)	$	796	$	2,056	$	(971	)	$	1,085
Acquired technology	1.2	1,002		(871		)	131		972		(711		)	261
Acquired patents	5.2	805		(565		)	240		785		(499		)	286
Trade names	1.4	629		(517		)	112		629		(406		)	223
Other	2.4	162		(147		)	15		162		(133		)	29
Total intangible assets	2.9	$	4,654	$	(3,360	)	$	1,294	$	4,604	$	(2,720	)	$	1,884

Estimated Amortization Expense for Unamortized Acquired Intangible Assets

As of December 31, 2018, expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in millions):



2019	$	553
2020	378
2021	273
2022	33
2023	26
Thereafter	31
Total	$	1,294

Liabilities (Tables)

12 Months Ended

Dec. 31, 2018

Accounts Payable and Accrued Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities are as follows (in millions):



	December 31,
	2018		2017
Accrued compensation and benefits	$	1,203	$	790
Accrued property and equipment	1,531		685
Overdraft in cash pooling entities	500		—
Accrued taxes	491		340
Other current liabilities	1,784		1,077
Accrued expenses and other current liabilities	$	5,509	$	2,892

Other Liabilities

The components of other liabilities are as follows (in millions):



	December 31,
	2018		2017
Income tax payable	$	4,655	$	5,372
Deferred tax liabilities	673		50
Other liabilities	862		995
Other liabilities	$	6,190	$	6,417

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments for Operating Leases

The following is a schedule, by years, of the future minimum lease payments required under non-cancelable operating leases as of December 31, 2018 (in millions):



	Operating Leases
2019	$	698
2020	946
2021	1,055
2022	1,048
2023	1,054
Thereafter	9,850
Total minimum lease payments	$	14,651

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2018

Equity [Abstract]

Stock Option Activity under Stock Plans

The following table summarizes the activities of stock option awards under the Stock Plans for the year ended December 31, 2018:



	Shares Subject to Options Outstanding
	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value⁽¹⁾
	(in thousands)				(in years)	(in millions)
Balance as of December 31, 2017	3,078		$	10.06
Stock options exercised	(1,941	)	$	7.90
Balances at December 31, 2018	1,137		$	13.74	1.7	$	133
Stock options exercisable as of December 31, 2018	1,137		$	13.74	1.7	$	133


(1)	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the official closing price of our Class A common stock of $131.09, as reported on the Nasdaq Global Select Market on December 31, 2018.

Restricted Stock Units Award Activity

The following table summarizes the activities for our unvested RSUs for the year ended December 31, 2018:



	Unvested RSUs⁽¹⁾
	Number of Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested at December 31, 2017	81,214		$	110.49
Granted	38,283		$	168.38
Vested	(43,396	)	$	106.59
Forfeited	(8,803	)	$	119.25
Unvested at December 31, 2018	67,298		$	144.77


(1)	Unvested shares at December 31, 2017 included an inducement award issued in connection with the WhatsApp acquisition in 2014, which was subject to the terms, restrictions, and conditions of a separate non-plan RSU award agreement. This inducement award was no longer outstanding as of December 31, 2018.

Interest and other income (expense), net (Tables)

12 Months Ended

Dec. 31, 2018

Nonoperating Income (Expense) [Abstract]

Schedule of Interest and Other Income, Net

The following table presents the detail of interest and other income (expense), net, for the periods presented (in millions):



	Year Ended December 31,
	2018			2017			2016
Interest income	$	661		$	398		$	176
Interest expense	(9		)	(6		)	(10		)
Foreign currency exchange losses, net	(213		)	(6		)	(76		)
Other	9			5			1
Interest and other income (expense), net	$	448		$	391		$	91

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Components of Income Before Provision for Income Taxes

The components of income before provision for income taxes for the years ended December 31, 2018, 2017, and 2016 are as follows (in millions):



	Year Ended December 31,
	2018		2017		2016
Domestic	$	8,800	$	7,079	$	6,368
Foreign	16,561		13,515		6,150
Income before provision for income taxes	$	25,361	$	20,594	$	12,518

Schedule of Provision for Income Taxes

The provision for income taxes consisted of the following (in millions):



	Year Ended December 31,
	2018			2017			2016
Current:
Federal	$	1,747		$	4,455		$	2,384
State	176			190			179
Foreign	1,031			389			195
Total current tax expense	2,954			5,034			2,758
Deferred:
Federal	316			(296		)	(414		)
State	34			(33		)	(18		)
Foreign	(55		)	(45		)	(25		)
Total deferred tax expense/(benefits)	295			(374		)	(457		)
Provision for income taxes	$	3,249		$	4,660		$	2,301

Reconciliation of U.S. Federal Statutory Income Tax Rate to Effective Tax Rate

A reconciliation of the U.S. federal statutory income tax rate of 21.0% to our effective tax rate is as follows (in percentages):



	Year Ended December 31,
	2018		2017		2016
U.S. federal statutory income tax rate	21.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	0.7		0.6		1.0
Research tax credits	(1.0	)	(0.9	)	(0.7	)
Share-based compensation	0.3		0.4		1.0
Excess tax benefits related to share-based compensation	(2.6	)	(5.8	)	(7.0	)
Effect of non-U.S. operations	(5.9	)	(18.6	)	(12.8	)
Effect of U.S. tax law change ⁽¹⁾	—		11.0		—
Other	0.3		0.9		1.9
Effective tax rate	12.8	%	22.6	%	18.4	%


(1)	Due to the Tax Act which was enacted in December 2017, provisional one-time mandatory transition tax on accumulated foreign earnings was accrued as of December 31, 2017. In addition, deferred taxes were derecognized for previous estimated tax liabilities that would arise upon repatriation of a portion of these earnings in the foreign jurisdictions.

Schedule of Deferred Tax Assets and Liabilities

Our deferred tax assets (liabilities) are as follows (in millions):



	December 31,
	2018			2017
Deferred tax assets:
Net operating loss carryforward	$	1,825		$	1,300
Tax credit carryforward	668			509
Share-based compensation	270			385
Accrued expenses and other liabilities	487			381
Other	153			131
Total deferred tax assets	3,403			2,706
Less: valuation allowance	(600		)	(438		)
Deferred tax assets, net of valuation allowance	2,803			2,268

Deferred tax liabilities:
Depreciation and amortization	(1,401		)	(622		)
Purchased intangible assets	(195		)	(309		)
Deferred taxes on foreign income	—			(88		)
Total deferred tax liabilities	(1,596		)	(1,019		)
Net deferred tax assets	$	1,207		$	1,249

Schedule of Gross Unrecognized Tax Benefits Roll Forward

The following table reflects changes in the gross unrecognized tax benefits (in millions):



	Year Ended December 31,
	2018			2017			2016
Gross unrecognized tax benefits-beginning of period	$	3,870		$	3,309		$	3,017
Increases related to prior year tax positions	457			72			32
Decreases related to prior year tax positions	(396		)	(34		)	(36		)
Increases related to current year tax positions	831			536			307
Decreases related to settlements of prior year tax positions	(84		)	(13		)	(11		)
Gross unrecognized tax benefits-end of period	$	4,678		$	3,870		$	3,309

Geographical Information (Tables)

12 Months Ended

Dec. 31, 2018

Segments, Geographical Areas [Abstract]

Revenue and Property and Equipment by Geographic Area

The following table sets forth property and equipment, net by geographic area (in millions):



	December 31,
	2018		2017
Property and equipment, net:
United States	$	18,950	$	10,406
Rest of the world⁽¹⁾	5,733		3,315
Total property and equipment, net	$	24,683	$	13,721

(1) No individual country, other than disclosed above, exceeded 10% of our total property and equipment, net for any period presented.

Summary of Significant Accounting Policies - Disaggregated Revenue (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disaggregation of Revenue [Line Items]
Revenue	$ 55,838	$ 40,653	$ 27,638
Advertising
Disaggregation of Revenue [Line Items]
Revenue	55,013	39,942	26,885
Payments and other fees
Disaggregation of Revenue [Line Items]
Revenue	825	711	753
US & Canada
Disaggregation of Revenue [Line Items]
Revenue	25,727	19,065	13,432
Europe
Disaggregation of Revenue [Line Items]
Revenue	13,631	10,126	6,792
Asia-Pacific
Disaggregation of Revenue [Line Items]
Revenue	11,733	7,921	5,037
Rest Of World
Disaggregation of Revenue [Line Items]
Revenue	4,747	3,541	2,377
UNITED STATES
Disaggregation of Revenue [Line Items]
Revenue	$ 24,100	$ 17,730	$ 12,580
Total Revenue \| Geographic concentration risk \| UNITED STATES
Disaggregation of Revenue [Line Items]
Concentration risk percentage	43.00%	44.00%	46.00%

Summary of Significant Accounting Policies - Deferred Revenue and Deposits (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Deferred revenue	$ 117	$ 68
Deposits	30	30
Total deferred revenue and deposits	$ 147	$ 98

Summary of Significant Accounting Policies - Narrative (Details)	12 Months Ended
	Dec. 31, 2018 USD ($) segment	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Jan. 01, 2019 USD ($)
Summary of Accounting Policies
Percentage of balance payable	70.00%
Advertising expense	$ 1,100,000,000	$ 324,000,000	$ 310,000,000
Goodwill impairment	0
Cumulative translation loss, net of tax	466,000,000	16,000,000
Foreign currency exchange losses, net	213,000,000	6,000,000	76,000,000
Revenue	55,838,000,000	40,653,000,000	27,638,000,000
Bad debt expense	$ 77,000,000	48,000,000	66,000,000
Number of reporting segments \| segment	1
Number of operating segments \| segment	1
Network equipment \| Minimum
Summary of Accounting Policies
Useful life of property and equipment	3 years
Network equipment \| Maximum
Summary of Accounting Policies
Useful life of property and equipment	25 years
Buildings \| Minimum
Summary of Accounting Policies
Useful life of property and equipment	3 years
Buildings \| Maximum
Summary of Accounting Policies
Useful life of property and equipment	30 years
Computer software, office equipment and other \| Minimum
Summary of Accounting Policies
Useful life of property and equipment	2 years
Computer software, office equipment and other \| Maximum
Summary of Accounting Policies
Useful life of property and equipment	5 years
UNITED STATES
Summary of Accounting Policies
Revenue	$ 24,100,000,000	$ 17,730,000,000	$ 12,580,000,000
Sales revenue \| Geographic concentration risk \| UNITED STATES
Summary of Accounting Policies
Concentration risk percentage	43.00%	44.00%	46.00%
Scenario, Forecast \| Accounting Standards Update 2016-02
Summary of Accounting Policies
Lease asset				$ 6,000,000,000
Lease liability				$ 6,000,000,000

Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Numerator
Net income	$ 22,112	$ 15,934	$ 10,217
Less: Net income attributable to participating securities	1	14	29
Net income attributable to Class A and Class B common stockholders	$ 22,111	$ 15,920	$ 10,188
Denominator
Number of shares used for basic EPS computation (in shares)	2,890	2,901	2,863
Basic EPS (in dollars per share)	$ 7.65	$ 5.49	$ 3.56
Numerator
Net income attributable to common stockholders	$ 22,111	$ 15,920	$ 10,188
Denominator
Number of shares used for basic EPS computation (in shares)	2,890	2,901	2,863
Number of shares used for diluted EPS computation (in shares)	2,921	2,956	2,925
Diluted EPS (in dollars per share)	$ 7.57	$ 5.39	$ 3.49
Class A Common Stock
Numerator
Net income	$ 18,411	$ 13,034	$ 8,270
Less: Net income attributable to participating securities	1	12	24
Net income attributable to Class A and Class B common stockholders	$ 18,410	$ 13,022	$ 8,246
Denominator
Weighted average shares outstanding (in shares)	2,406	2,375	2,323
Less: Shares subject to repurchase (in shares)	0	2	6
Number of shares used for basic EPS computation (in shares)	2,406	2,373	2,317
Basic EPS (in dollars per share)	$ 7.65	$ 5.49	$ 3.56
Numerator
Net income attributable to common stockholders	$ 18,410	$ 13,022	$ 8,246
Reallocation of net income attributable to participating securities	1	14	29
Reallocation of net income as a result of conversion of Class B to Class A common stock	3,701	2,898	1,942
Reallocation of net income to Class B common stock	0	0	0
Net income attributable to common stockholders for diluted EPS	$ 22,112	$ 15,934	$ 10,217
Denominator
Number of shares used for basic EPS computation (in shares)	2,406	2,373	2,317
Conversion of Class B to Class A common stock (in shares)	484	528	546
Shares subject to repurchase and other (in shares)	0	2	7
Number of shares used for diluted EPS computation (in shares)	2,921	2,956	2,925
Diluted EPS (in dollars per share)	$ 7.57	$ 5.39	$ 3.49
Class A Common Stock \| Employee Stock Option
Denominator
Share based payment arrangements (in shares)	2	4	6
Class A Common Stock \| Restricted Stock Units (RSUs)
Denominator
Share based payment arrangements (in shares)	29	49	49
Class B Common Stock
Numerator
Net income	$ 3,701	$ 2,900	$ 1,947
Less: Net income attributable to participating securities	0	2	5
Net income attributable to Class A and Class B common stockholders	$ 3,701	$ 2,898	$ 1,942
Denominator
Weighted average shares outstanding (in shares)	484	528	548
Less: Shares subject to repurchase (in shares)	0	0	2
Number of shares used for basic EPS computation (in shares)	484	528	546
Basic EPS (in dollars per share)	$ 7.65	$ 5.49	$ 3.56
Numerator
Net income attributable to common stockholders	$ 3,701	$ 2,898	$ 1,942
Reallocation of net income attributable to participating securities	0	0	0
Reallocation of net income as a result of conversion of Class B to Class A common stock	0	0	0
Reallocation of net income to Class B common stock	(16)	(13)	14
Net income attributable to common stockholders for diluted EPS	$ 3,685	$ 2,885	$ 1,956
Denominator
Number of shares used for basic EPS computation (in shares)	484	528	546
Conversion of Class B to Class A common stock (in shares)	0	0	0
Shares subject to repurchase and other (in shares)	0	0	3
Number of shares used for diluted EPS computation (in shares)	487	535	560
Diluted EPS (in dollars per share)	$ 7.57	$ 5.39	$ 3.49
Class B Common Stock \| Employee Stock Option
Denominator
Share based payment arrangements (in shares)	2	4	6
Class B Common Stock \| Restricted Stock Units (RSUs)
Denominator
Share based payment arrangements (in shares)	1	3	5

Cash and Cash Equivalents, and Marketable Securities (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	$ 10,019	$ 8,079	$ 8,903
Marketable securities	31,095	33,632
Total cash and cash equivalents, and marketable securities	41,114	41,711
Gross unrealized loss on marketable securities	(357)	(289)
Gross unrealized loss on securities in continuous loss position for 12 months or longer	(332)	(169)
Cash
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	2,713	2,212
Money market funds
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	6,792	5,268
U.S. government securities
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	90	66
U.S. government agency securities
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	54	25
Certificate of deposits and time deposits
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	369	440
Corporate debt securities
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	1	68
U.S. government securities
Cash, Cash Equivalents and Marketable Securities
Marketable securities	13,836	12,766
U.S. government agency securities
Cash, Cash Equivalents and Marketable Securities
Marketable securities	8,333	10,944
Corporate debt securities
Cash, Cash Equivalents and Marketable Securities
Marketable securities	$ 8,926	$ 9,922

Cash and Cash Equivalents, and Marketable Securities - Contractual Maturities of Debt Securities (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Cash and Cash Equivalents, and Marketable Securities [Abstract]
Due in one year	$ 9,746	$ 7,976
Due after one year to five years	21,349	25,656
Total	$ 31,095	$ 33,632

Fair Value Measurement (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	$ 31,095	$ 33,632
Total cash equivalents and marketable securities	38,401	39,499
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total cash equivalents and marketable securities	29,105	29,069
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total cash equivalents and marketable securities	9,296	10,430
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total cash equivalents and marketable securities	0	0
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	6,792	5,268
Money market funds \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	6,792	5,268
Money market funds \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	0	0
Money market funds \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	0	0
U.S. government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	90	66
U.S. government securities \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	90	66
U.S. government securities \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	0	0
U.S. government securities \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	0	0
U.S. government agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	54	25
U.S. government agency securities \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	54	25
U.S. government agency securities \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	0	0
U.S. government agency securities \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	0	0
Certificate of deposits and time deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	369	440
Certificate of deposits and time deposits \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	0	0
Certificate of deposits and time deposits \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	369	440
Certificate of deposits and time deposits \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	0	0
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	1	68
Corporate debt securities \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	0	0
Corporate debt securities \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	1	68
Corporate debt securities \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents	0	0
U.S. government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	13,836	12,766
U.S. government securities \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	13,836	12,766
U.S. government securities \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	0	0
U.S. government securities \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	0	0
U.S. government agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	8,333	10,944
U.S. government agency securities \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	8,333	10,944
U.S. government agency securities \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	0	0
U.S. government agency securities \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	0	0
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	8,926	9,922
Corporate debt securities \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	0	0
Corporate debt securities \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	8,926	9,922
Corporate debt securities \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Marketable securities	$ 0	$ 0

Property and Equipment (Detail) - USD ($)	12 Months Ended
Property and Equipment (Detail) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment
Property and equipment, gross	$ 31,573,000,000	$ 18,337,000,000
Less: Accumulated depreciation	(6,890,000,000)	(4,616,000,000)
Property and equipment, net	24,683,000,000	13,721,000,000
Depreciation expense	3,680,000,000	2,330,000,000	$ 1,590,000,000
Assets acquired under capital lease agreements	1,060,000,000	533,000,000
Accumulated depreciation of property and equipment acquired under capital leases	217,000,000	101,000,000
Interest costs capitalized	0	0	$ 0
Land
Property, Plant and Equipment
Property and equipment, gross	899,000,000	798,000,000
Buildings
Property, Plant and Equipment
Property and equipment, gross	7,401,000,000	4,909,000,000
Leasehold improvements
Property, Plant and Equipment
Property and equipment, gross	1,841,000,000	959,000,000
Network equipment
Property, Plant and Equipment
Property and equipment, gross	13,017,000,000	7,998,000,000
Computer software, office equipment and other
Property, Plant and Equipment
Property and equipment, gross	1,187,000,000	681,000,000
Construction in progress
Property, Plant and Equipment
Property and equipment, gross	$ 7,228,000,000	$ 2,992,000,000

Goodwill and Intangible Assets - Change in Carrying Amount (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Goodwill [Roll Forward]
Goodwill beginning	$ 18,221	$ 18,122
Goodwill acquired	88	90
Effect of currency translation adjustment	(8)	9
Goodwill ending	$ 18,301	$ 18,221

Goodwill and Intangible Assets - Intangible Assets (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 640	$ 692	$ 751
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Remaining Useful Lives (in years)	2 years 10 months 23 days
Gross Carrying Amount	$ 4,654	4,604
Accumulated Amortization	(3,360)	(2,720)
Net Carrying Amount	$ 1,294	1,884
Acquired users
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Remaining Useful Lives (in years)	2 years 9 months 17 days
Gross Carrying Amount	$ 2,056	2,056
Accumulated Amortization	(1,260)	(971)
Net Carrying Amount	$ 796	1,085
Acquired technology
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Remaining Useful Lives (in years)	1 year 2 months 11 days
Gross Carrying Amount	$ 1,002	972
Accumulated Amortization	(871)	(711)
Net Carrying Amount	$ 131	261
Acquired patents
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Remaining Useful Lives (in years)	5 years 2 months 12 days
Gross Carrying Amount	$ 805	785
Accumulated Amortization	(565)	(499)
Net Carrying Amount	$ 240	286
Trade names
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Remaining Useful Lives (in years)	1 year 4 months 23 days
Gross Carrying Amount	$ 629	629
Accumulated Amortization	(517)	(406)
Net Carrying Amount	$ 112	223
Other
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Remaining Useful Lives (in years)	2 years 4 months 23 days
Gross Carrying Amount	$ 162	162
Accumulated Amortization	(147)	(133)
Net Carrying Amount	$ 15	$ 29

Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
2019	$ 553
2020	378
2021	273
2022	33
2023	26
Thereafter	31
Net Carrying Amount	$ 1,294	$ 1,884

Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Accrued Liabilities and Other Current Liabilities [Abstract]
Accrued compensation and benefits	$ 1,203	$ 790
Accrued property and equipment	1,531	685
Overdraft in cash pooling entities	500	0
Accrued taxes	491	340
Other current liabilities	1,784	1,077
Accrued expenses and other current liabilities	5,509	2,892
Other Liabilities [Abstract]
Income tax payable	4,655	5,372
Deferred tax liabilities	673	50
Other liabilities	862	995
Other liabilities	$ 6,190	$ 6,417

Long-term Debt - Borrowings (Details) - Revolving Credit Facility - USD ($)	Dec. 31, 2018	May 31, 2016
Debt Instrument
Line of credit facility, maximum borrowing capacity		$ 2,000,000,000.0
Line of credit facility, amount outstanding	$ 0

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Commitments and Contingencies (Details) $ in Millions		12 Months Ended
Commitments and Contingencies (Details) $ in Millions	Jul. 27, 2018 claim	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Operating Leases
2019		$ 698
2020		946
2021		1,055
2022		1,048
2023		1,054
Thereafter		9,850
Total minimum lease payments		14,651
Operating lease expense		629	$ 363	$ 269
Other contractual commitments
Non-cancelable contractual commitment		$ 6,170
Contractual obligation, period		5 years
Number of class actions filed \| claim	2

Stockholders' Equity - Common Stock (Details)	Dec. 31, 2018 vote $ / shares shares	Dec. 31, 2017 $ / shares shares
Class of Stock
Common stock, par value (in dollars per share) \| $ / shares	$ 0.000006	$ 0.000006
Class A Common Stock
Class of Stock
Common stock, shares authorized (in shares)	5,000,000,000	5,000,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.000006
Common stock, number of votes by class \| vote	1
Common stock, shares, issued (in shares)	2,385,000,000	2,397,000,000
Common stock, shares, outstanding (in shares)	2,385,000,000	2,397,000,000
Class B Common Stock
Class of Stock
Common stock, shares authorized (in shares)	4,141,000,000	4,141,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.000006
Common stock, number of votes by class \| vote	10
Common stock, shares, issued (in shares)	469,000,000	509,000,000
Common stock, shares, outstanding (in shares)	469,000,000	509,000,000

Stockholders' Equity - Share Repurchase Program (Details) - USD ($) shares in Millions	12 Months Ended
	Dec. 31, 2018	Jun. 30, 2018	Apr. 30, 2018
Equity [Abstract]
Share repurchase program, authorized amount	$ 9,000,000,000.0	$ 6,000,000,000.0	$ 9,000,000,000.0
Shares repurchased (in shares)	79
Shares repurchased	$ 12,930,000,000
Shares available for repurchase	$ 9,000,000,000

Stockholders' Equity - Share-based Compensation Plans (Detail)		12 Months Ended
	Jan. 01, 2019 shares	Dec. 31, 2018 plans shares
Share-based Compensation Arrangement by Share-based Payment Award
Share-based employee compensation plans, number \| plans		2
2012 Plan
Share-based Compensation Arrangement by Share-based Payment Award
2012 equity incentive plan shares reserved for future issuance (in shares)		83,000,000
Shares reserved for issuance increase percentage		2.50%
Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award
Shares reserved for issuance (in shares)	60,000,000

Stockholders' Equity - Stock Option Award Activity (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Aggregate Intrinsic Value
Aggregate intrinsic value of the options exercised	$ 315	$ 359	$ 309
Employee Stock Option
Number of Shares
Beginning balance (in shares)	3,078,000
Stock options exercised (in shares)	(1,941,000)
Ending balance (in shares)	1,137,000	3,078,000
Stock options exercisable as of period end (in shares)	1,137,000
Weighted Average Exercise Price
Beginning Balance (in dollars per share)	$ 10.06
Stock options exercised (in dollars per share)	7.90
Ending Balance (in dollars per share)	13.74	$ 10.06
Stock options exercisable as of period end (in dollars per share)	$ 13.74
Weighted Average Remaining Contractual Term
Balance at period end	1 year 8 months 6 days
Stock options exercisable as of period end	1 year 8 months 6 days
Aggregate Intrinsic Value
Balance at period end	$ 133
Stock options exercisable as of period end	$ 133
Options granted (in shares)	0
Options forfeited or canceled (in shares)	0
Class A Common Stock
Aggregate Intrinsic Value
Share price (in dollars per share)	$ 131.09

Stockholders' Equity - RSU Award Activity (Details) - Restricted Stock Units (RSUs) shares in Thousands	12 Months Ended
	Dec. 31, 2018 $ / shares shares
Number of Shares
Unvested at beginning of period (in shares) \| shares	81,214
Granted (in shares) \| shares	38,283
Vested (in shares) \| shares	(43,396)
Forfeited (in shares) \| shares	(8,803)
Unvested at end of period (in shares) \| shares	67,298
Weighted Average Grant Date Fair Value
Unvested at beginning of period (in dollars per share) \| $ / shares	$ 110.49
Granted (in dollars per share) \| $ / shares	168.38
Vested (in dollars per share) \| $ / shares	106.59
Forfeited (in dollars per share) \| $ / shares	119.25
Unvested at end of period (in dollars per share) \| $ / shares	$ 144.77

Stockholders' Equity - Additional Award Disclosures (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award
Future period share-based compensation expense	$ 8,960
Future period share-based compensation expense period of recognition (in years)	3 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award
Fair value of vested RSUs	$ 7,570	$ 6,760	$ 4,920

Interest and other income (expense), net (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Nonoperating Income (Expense) [Abstract]
Interest income	$ 661	$ 398	$ 176
Interest expense	(9)	(6)	(10)
Foreign currency exchange losses, net	(213)	(6)	(76)
Other	9	5	1
Interest and other income (expense), net	$ 448	$ 391	$ 91

Income Taxes - Schedule for Income Before Income Tax (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Domestic	$ 8,800	$ 7,079	$ 6,368
Foreign	16,561	13,515	6,150
Income before provision for income taxes	$ 25,361	$ 20,594	$ 12,518

Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current:
Federal	$ 1,747	$ 4,455	$ 2,384
State	176	190	179
Foreign	1,031	389	195
Total current tax expense	2,954	5,034	2,758
Deferred:
Federal	316	(296)	(414)
State	34	(33)	(18)
Foreign	(55)	(45)	(25)
Total deferred tax expense/(benefits)	295	(374)	(457)
Provision for income taxes	$ 3,249	$ 4,660	$ 2,301

Income Taxes - Effective Income Tax Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract]
U.S. federal statutory income tax rate	21.00%	35.00%	35.00%
State income taxes, net of federal benefit	0.70%	0.60%	1.00%
Research tax credits	(1.00%)	(0.90%)	(0.70%)
Share-based compensation	0.30%	0.40%	1.00%
Excess tax benefits related to share-based compensation	(2.60%)	(5.80%)	(7.00%)
Effect of non-U.S. operations	(5.90%)	(18.60%)	(12.80%)
Effect of U.S. tax law change	0.00%	11.00%	0.00%
Other	0.30%	0.90%	1.90%
Effective tax rate	12.80%	22.60%	18.40%

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Net operating loss carryforward	$ 1,825	$ 1,300
Tax credit carryforward	668	509
Share-based compensation	270	385
Accrued expenses and other liabilities	487	381
Other	153	131
Total deferred tax assets	3,403	2,706
Less: valuation allowance	(600)	(438)
Deferred tax assets, net of valuation allowance	2,803	2,268
Deferred tax liabilities:
Depreciation and amortization	(1,401)	(622)
Purchased intangible assets	(195)	(309)
Deferred taxes on foreign income	0	(88)
Total deferred tax liabilities	(1,596)	(1,019)
Net deferred tax assets	$ 1,207	$ 1,249

Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of Unrecognized Tax Benefits
Gross unrecognized tax benefits-beginning of period	$ 3,870	$ 3,309	$ 3,017
Increases related to prior year tax positions	457	72	32
Decreases related to prior year tax positions	(396)	(34)	(36)
Increases related to current year tax positions	831	536	307
Decreases related to settlements of prior year tax positions	(84)	(13)	(11)
Gross unrecognized tax benefits-end of period	$ 4,678	$ 3,870	$ 3,309

Income Taxes - Narrative (Detail) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
Income Taxes - Narrative (Detail) - USD ($) $ in Millions	Jul. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure
U.S. federal statutory income tax rate		21.00%	35.00%	35.00%
Valuation allowance, deferred tax assets		$ 600	$ 438
Cumulative stock ownership change threshold		50.00%
Change in ownership percentage over period		3 years
Unrecognized tax benefits, interest and penalties accrued		$ 340	154
Unrecognized tax benefits		4,678	$ 3,870	$ 3,309	$ 3,017
Unrecognized tax benefits that would impact effective tax rate		2,940
Maximum
Income Tax Disclosure
Income tax examination, estimate of possible additional tax liability	$ 5,000
Internal Revenue Service (IRS)
Income Tax Disclosure
Operating loss carryforwards		7,880
Tax credit carryforward		290
State and Local Jurisdiction
Income Tax Disclosure
Operating loss carryforwards		2,220
Tax credit carryforward		1,910
Tax Years 2011 Through 2013 \| Internal Revenue Service (IRS)
Income Tax Disclosure
Income tax examination, estimate of possible additional tax liability		$ 680

Geographical Information - Property and Equipment (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Long-Lived Assets, by Geographical Area
Property and equipment, net	$ 24,683	$ 13,721
UNITED STATES
Long-Lived Assets, by Geographical Area
Property and equipment, net	18,950	10,406
Rest of the world
Long-Lived Assets, by Geographical Area
Property and equipment, net	$ 5,733	$ 3,315

Label	Element	Value
Other Assets [Member]
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	$ 100,000,000
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	107,000,000
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	95,000,000
Prepaid Expenses and Other Current Assets [Member]
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	106,000,000
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	18,000,000
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	$ 10,000,000