The most recent earnings report for Alphabet, Google’s parent company, indicated that the company’s big bet moonshot businesses did not perform well in terms of revenue and earnings. The article “Big ‘Bets’ Temper Google’s Earnings” by Jack Nicas in the April 22, 2016 issue of the Wall Street Journal, reported that losses from Alphabet’s moonshot laden non-Google units increased to $802 million, although revenue from those units more than doubled to $166 million. As the article points out, Alphabet “posted healthy increases in first quarter revenue and profits, driven by the growing strength of its core Google business on mobile devices,” but in the company’s non-Google businesses, losses grew.
The weak financial performance of Alphabet’s moonshots is not surprising. Nor, is it necessarily discouraging. Continue reading “Alphabet’s Moonshot R&D: Potential Value for Google, Not Necessarily New Revenue Streams” »