Mail Stop 4561 November 8, 2017

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Mail Stop 4561 

November 8, 2017 

 

 

Larry Page  

Chief Executive Officer 

Alphabet, Inc. 

1600 Amphitheatre Parkway  

Mountain View, CA 94043 

 

Re: 

Alphabet, Inc. 

 

Form 10-Q for the Quarterly Period Ended September 30, 2017 

Filed October 27, 2017 

File No. 001-37580         

 

Dear Mr. Page: 

 

We have reviewed your August 25, 2017 and October 16, 2017 responses to our 

comment letters and have the following comments.  In some of our comments, we may ask you 

to provide us with information so we may better understand your disclosure. 

 

Please respond to these comments within ten business days by providing the requested 

information or advise us as soon as possible when you will respond.  If you do not believe our 

comments apply to your facts and circumstances, please tell us why in your response.   

 

After reviewing your response to these comments, we may have additional comments.   

            

Form 10-Q for the Quarterly Period Ended September 30, 2017 

 

Financial Statements 

 

Notes to the Consolidated Financial Statements 

 

Note 2. Revenues  

 

Revenue Recognition, page 9 

 

1.

 

We are continuing to evaluate your response to prior comment 2 in your letter dated 

October 16, 2017 and may have additional comments.   

 

 

 

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Larry Page  

Alphabet, Inc. 

November 8, 2017 

Page 2  

 

 

Note 15. Information about Segments and Geographic Areas, page 28 

 

2.

 

Please address the following matters in regard to your response to prior comment 6 in 

your letter dated August 25, 2017.    

 

a.

 

Describe the key operating decisions, how performance is assessed and how resources 

are allocated to the Google business and the product lines within Google.    

 

b.

 

Describe the degree of responsibility and participation of each of Larry Page and 

Sergey Brin in the decisions described in 2(a).   

 

c.

 

Clarify whether Sundar Pichai has the authority to make any of the decisions 

described in 2(a) without approval or consent from Larry Page and/or Sergey Brin, 

and describe the level of such authority and the types of decisions made by Sundar 

Pichai without approval.  

  

d.

 

Describe the types of decisions made by Sundar Pichai that would require approval 

from Larry Page and/or Sergey Brin.    

 

e.

 

Provide further details about the budget process, and describe the information 

provided to your CODM to support his approval of the Google operating budgets in 

total, as referenced in your response.     

 

3.

 

Please clarify the portion of your response that indicates, in general, your model is to 

have a strong CEO who runs each business, with Sergey Brin and Larry Page in service 

to them as needed.  Tell us whether each of the businesses within the Google segment has 

a CEO.  For example, we note from Larry’s Alphabet Letter that YouTube is run by a 

CEO, Susan Wojcicki.  Describe how Sergey Brin and Larry Page work together and 

with these CEOs.  In this regard, further describe what consideration was given to these 

businesses representing separate operating segments.  Refer to ASC 280-10-50-7.   

 

4.

 

Please tell us whether there is any variable compensation paid to Sundar Pichai that is 

based upon the operating performance of Google or any of the product lines within 

Google such as YouTube.     

 

5.

 

Please further describe the Google operating results that are regularly reviewed by Larry 

Page, Sergey Brin and/or Sundar Pichai.  Please also address the following in your 

response:   

 

a.

 

We note in your response to prior comment 6 in your letter dated August 25, 2017 

that your CODM receives operating results for Google on a weekly and quarterly 

basis.  We further note in your response to prior comment 2 in your letter dated 

October 16, 2017 that your CODM and Board of Directors receive disaggregated 

advertising revenue by platform and property including YouTube.  Tell us whether 

Larry Page and/or the Board of Directors receive any form of profitability and/or 

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Larry Page  

Alphabet, Inc. 

November 8, 2017 

Page 3  

 

 

expense information for any of the product lines within Google and specifically the 

YouTube business in these reports or any other reports.  If so, describe the nature, 

type and frequency of that information.  

 

b.

 

Explain whether any financial information received by Larry Page differs from the 

financial information received by Sergey Brin.  If so, describe the differences as they 

relate to Google and the product lines within Google such as YouTube.   

 

c.

 

Describe the segment operating results included in the financial packages provided to 

Sundar Pichai on a regular basis and how it differs from the information provided to 

Larry Page and/or Sergey Brin.  In this regard, describe any profitability and/or 

expense information that is provided for any of the product lines within Google and 

specifically the YouTube business.   

  

6.

 

Please provide your analysis to support your conclusion regarding your CODM.  

Specifically, tell us how you concluded whether or not Sundar Pichai and/or Sergey Brin 

are part of your CODM function.  In this regard, we note that Google represents nearly all 

of Alphabet Inc.’s financial position and results.  Refer to ASC 280-10-50-5. 

 

You may contact Melissa Walsh, Staff Accountant, at [phone] if you have 

questions regarding comments on the financial statements and related matters.  Please contact me 

at [phone] with any other questions. 

 

Sincerely, 

 

 

 

/s/ Stephen Krikorian 

 

 

Stephen Krikorian 

Accounting Branch Chief  

Office of Information Technologies 

and Services