Alphabet moves away from moonshot projects

Posted on 14 Jan 2017 by Michael Cruickshank

A number of recent moves by Google's parent company Alphabet appear to show it is losing interest in moonshot projects.

Most recently the company announced that it would be shutting down its ambitious project to build solar powered high-altitude drones.

These drones, dubbed ‘Project Titan’, were to be used to provide wireless internet to large areas of the world that currently lack connectivity.

Alphabet (then Google) kicked off the project in 2014 when it acquired Titan Aerospace. The drones it was building were designed to compliment the pre-existing ‘Project Loon’ which uses high altitude balloons for a similar aim.

The company suggested that the reason behind killing off Titan was due to the balloon tech being more promising.

“Titan was brought into X in late 2015. We ended our exploration of high altitude unmanned aerial vehicles for internet access shortly after,” the company said in a press statement.

“By comparison, at this stage, the economics and technical feasibility of Project Loon present a much more promising way to connect rural and remote parts of the world.”

Despite this, the cancellation of Project Titan is just the latest in a string of closures related to the company’s moonshot projects.

A new, more risk adverse Alphabet

One of the primary changes following the restructuring of Google’s sprawling network of acquired companies and high-tech projects was a strict fiscal tightening.

This desire to offload non-performing investments has caused several high-profile casualties. Among these is Boston Dynamic, a robotics company famous for its animal-like robots such as Big Dog and Atlas.

Despite its innovative nature, Alphabet struggled to find a consumer market for these robots, particularly as they reportedly performed poorly in military trials. As a result the company has reportedly been up for sale since mid last year, however, a buyer has not yet been announced.

Another casualty of this belt-tightening appears to be Alphabet’s satellite imagery company Terra Bella (formerly Skybox). News emerged early this year that Alphabet planned to sell the company, which it acquired in 2014, to Planet.

Interestingly, the sale to Planet is an equity transition, meaning that Alphabet will now control a stake in the company. Moreover, this shows that Alphabet is looking to move away from producing satellite imagery in-house, and would rather contract closely-aligned outside companies to provide this service instead.

Driverless downgrade

Perhaps Google (and Alphabet’s) most well-known moonshot project is its driverless cars, which wowed the world when they were first demonstrated several years ago.

Now however Google has announced that it is planning to spin-off this project into a whole new company called ‘Waymo’.

Rather than build driverless cars themselves, Waymo will simply attempt to solve some of the software and navigation problems behind such vehicles and then sell this tech to third-party car manufacturers.

Taken together it would seem that Google and Alphabet are losing their appetite for risk, despite continuing to grow as one of the world’s largest and most valuable companies.

While this may be good for the initial bottom line, it is unclear if this strategy will help them cement their place at the top, or will set them up to be overtaken by newer and more agile companies in the future.