By Jessica Van Sack, Boston Herald
One year after the reorganization of Google into a subsidiary of parent company Alphabet, it may as well be known as alpha-bets.
The company is open about this, with Chief Financial Officer Ruth Porat opening the company’s last earnings call by saying she would review the results for Google and “other bets.”
Those “other bets” lost the company three-quarters of a billion dollars in the second quarter of this year, the most recently available numbers.
Alphabet is now a laboratory experimenting on the cure for its own core business model — and it’s willing to take on the losses associated with that. The problem is that Google’s bets have the worst timing.
The latest bets were unveiled last week in the form of virtual assistant Google Home and Pixel, its new Android smartphone.
First, Google Home is about two years too late. During those two years, the competition, Amazon Echo, has captured tomes of valuable customer information and used it to improved itself. The Echo is now a staple in many homes, and for many it may be too heavily relied upon to replace. I’ve found the speech recognition capabilities second-to-none and can’t remember the last time that saying “Hey Alexa” didn’t result in a quick response from the Echo. With all its masses of information from search, Google Home’s biggest challenge isn’t going to be the data — she’ll probably play music, check for traffic and recite facts just fine. But the nuts and bolts of a difficult hardware and software interface that relies on voice recognition has eluded even the most practiced makers like Microsoft and perfecting those devices requires years of real-world use.
Then there are the Pixel and Pixel XL smartphones, arguably Alphabet’s first attempt at a top-tier smartphone to compete with the iPhone and Samsung Galaxy lineup. Both Pixel models have all the makings of a solid, top-tier smartphone, the added bonus of unlimited photo storage — bearing an incredible likeness to recent versions of the iPhone.
But the Pixel, also, is many years late. When it was just known as Google, Alphabet had a chance to seriously dominate the mobile phone market with Android. But it lost control of its own platform, and now, the only companies that make real money from Android phones are Samsung and Microsoft, the latter thanks to smartly hoarded patent and licensing deals. It’s almost as if someone at Google is (rightfully) angry that Google makes no money from Android phones, and no one is willing to tell that person that this sad fact will probably never change, so Pixel was born.
Also falling under the category of terribly timed bets is the sadly abandoned Glass, the company’s augmented reality glasses which somehow became ubiquitous with obnoxious early adopters and overgrown hipsters. Had that same level of investment gone into something simpler, like the glasses that Snapchat is about to release this year, Google might have found more success.
Carmakers like Ford and Tesla have seemingly leapfrogged the Google Self-Driving Car Project, which is still being called a prototype, and therefore seems headed for the same fate as Glass, Google Hangouts and Google Plus — somewhere between a vacant building and a graveyard.
Google’s penchant for experimentation isn’t a bad thing — in fact it’s necessary for survival, a fact that the company seems to embrace with a degree of self effacement. Google’s top innovation specialist, Obi Felten, even lists her job title on LinkedIn as “Head of getting moonshots ready for contact with the real world.”
A moonshot is exactly what Google needs, as its entire existence is predicated on driving search traffic and ad revenue. Should those numbers begin to go soft, as some would argue they already have, then Google will have to re-evaluate its business model sooner rather than later. And at that point, one of those moonshot “bets” had better start paying off big.
©2016 the Boston Herald Distributed by Tribune Content Agency, LLC.
