Alphabet's Other Bets

Larry Page and Sergey Brin, the two founders of Google, once wrote that theirs was “not a conventional company.” Indeed, Google did come up with the best search engine on the market which has dominated the online world for the past several decades. Google’s substantial share of online advertising revenues enabled it to grow phenomenally and becoming the second most valuable company of the world regarding market capitalisation. Although Google´s segment still makes up for 99% of Alphabet´s revenue, Alphabet Inc. is a collection of numerous early-stage businesses, which could play a fundamental role in future business development. The rapidly evolving, increasingly competitive industry of search engines encouraged Alphabet to invest significant amounts into the Research and Development of these so called ‘Other Bets’. The decisive question is, however, whether or not Alphabet can reduce its dependence on Google – particularly its core advertising business.

Verily, one of Alphabet´s most promising Other Bets, is developing tools to radically transform healthcare. Verily´s smart lens program is aiming to provide self-contained wireless sensing on the surface of the eye, which would revolutionise the way we use contact lenses. In order to stop mosquitoes from spreading harmful diseases, Verily is also investing heavily into Debug, a project that is aimed to rear and release good, sterile mosquitoes, which should eliminate harmful mosquitoes carrying diseases. Another start-up foundation, Verb Surgical, is developing a modern, innovative digital surgery platform. To achieve its goal of revolutionising the way surgery works, Verily is trying to incorporate robotics, machine learning and visualisation.

Another of radically transformative project of Alphabet’s is Waymo, which is working intensively since 2009 to transform the way we commute and travel. The Google self-driving car project began in 2009 and rapidly started testing its technological novelty in the US. After numerous years of intense development, Waymo is running now on public roads without anyone in the driver seat. The company is aiming to give people access to vehicles at any time they want, hence positioning itself as a prospective big player in the future shared mobility market. Although Waymo asserts to be able to increase safety on roads decisively, it has to be mentioned that these cars were barely tested in heavy rain yet and find difficulty in recognising harmless objects. When Waymo is capable of enhancing these yet underdeveloped functions, it is reasonable to assume that they will play a pivotal role in the car industry in the upcoming years.

In addition, the Google-Class is intended to enable the hands-free displaying of information, which is currently available for almost all smartphone users. The mission to produce a ubiquitous computer is undoubtedly also a very prospective long-term project. However, the vast amount of criticism due to privacy and safety concerns could hinder this project in its short-term implementation.

Besides of Verily and Waymo, Alphabet consists of numerous Other Bets such as Google Fiber, which is aiming to provide broadband internet at super speeds across the US. Nest, which Alphabet could fold into its hardware division, makes smart thermostats, home security systems and doorbells which huge potential for future growth.

Given the vast reserve of expertise and resources Alphabet has at its disposal, it is reasonable to assume that many of its Other Bets have a chance of being future market leaders in their segments. Despite its apparent reliance on the relatively dated search-engine market therefore, Alphabet is likely on the path to dominating the industries of the future.


© Warwick Finance Societies 

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