Google driverless car

Google ‘moonshots’ increasingly expensive

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One of Google's driverless cars at work. Image: Google

25 April 2016

When Google parent company Alphabet Inc. reported its first-quarter earnings didn’t hit Wall Street’s expectations last week, execs laid the blame directly at the feet of the company’s so-called moonshot projects. Those groundbreaking projects, like autonomous cars, high-tech medical devices, smart clothes and smart home devices are interesting – but they’re not cheap.And that’s dragging down Alphabet’s financials.Google reported that its first-quarter revenue came in at $20.26 billion; the company is still making money. However, that was about $120 million less than expected.

“Our Q1 results represent a tremendous start to the year with 17% revenue growth year on year and 23% growth on a constant currency basis,” said Ruth Porat, chief financial officer of Alphabet, in a written statement. “We’re thoughtfully pursuing big bets and building exciting new technologies, in Google and our Other Bets, that position us well for long-term growth.”

Those Other Bets are better known as Google’s moonshots.

The company also noted that its moonshots – which stray far from core money makers like search and Android to things like Google Fiber, Google X, Internet connectivity balloons and wearables – showed $166 million in revenue for the first quarter of 2016. That’s up from $80 million for the last quarter of 2015.

However, Google also reported that those longer-term projects, which had an operating loss of $633 million in 2015’s fourth quarter, showed an operating loss of $802 million this past quarter.

The company did not break out numbers for the individual projects, so it’s not clear how much money is going into driverless cars compared to smart home devices.

IDG News Service

 

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