Monday, 8 August 2016

Google's Wacky Moonshot Ideas Lose $859m!

Google's moonshot factory lost the search giant almost $1bn in just 12 weeks - more than many tech firms rake in each year.
Parent company Alphabet (Xetra: ABEA.DE - news) invests heavily in so-called moonshot projects, which include long-term expensive bets on things like self-driving cars, superfast internet, life sciences and app-controlled home tech.
But, for now, it is costing Google way more than it makes back from sales.
Sales for the quarter ending in June stood at $185m - more than twice as much as the same quarter a year ago.
But overall, its losses stood at $859m, up from $660m a year earlier.
In an earning's call Google said most of its sales came from its Fiber internet connection service and its Nest automated home technology systems.
However the company refused to say when the firm's self-driving cars will start making money.
This marks the second consecutive quarter in which losses have deepened in the "other bets" category.
Google has repeatedly promised to rein in its moonshot spending, and has shut down projects in which it saw no future.
It suspended production of prototypes of Google Glass - an optical head-mounted display - in January last year.
Yet Google can still afford to spend huge amounts on speculative projects because it remains the most successful advertising network in the world.
Alphabet reported on Thursday that it earned $4.9bn during the April to June quarter - up 24% from the same time last year.
Alphabet's stock gained more than 5% as a result, and is set to surpass its all-time high of $810.35 in Friday's regular trading session.

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