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Google self-driving project to graduate from "Moonshot" programs

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【Summary】Google’s hot-discussed driverless car project is going to be spun off from its parent company Alphabet to become standalone business.

Original Claire    Nov 01, 2016 10:22 PM PT
Google self-driving project to graduate from

After reaching the 2-million-mile mark, Google's new and often-discussed driverless car project will spin off from its parent company. In effect, it will become a standalone business generating profits.  

Speaking at the Nikkei Innovation Forum in Palo Alto on Oct 26th, 2016, the current self-driving cars business CEO of Google, John Krafcik, announced that the moonshot project is "graduating" from years of toil in the experimental stage.

"Around a year ago we announced this new Alphabet structure and the ‘bet' of Alphabet is sort of a shorthand for these new entities that are forming within this new corporate structure. You may think of the self-driving car project as a part of ‘X', our sort of long range moonshot term project. We're moving out of ‘X' and soon out of Alphabet completely." Said Krafcik at the conference, according to Forbes.

Google X is a semi-secret research and development facility founded by Google in January, 2010.  It aims to conduct avant-garde projects that are in the primary stage but have significant future vales. Although relatively conservative about what is transpiring inside the lab, Google revealed in 2014 that there are eight projects going on at X. Some well-known projects include driverless cars and Google Glass.

Krafcik, the former Hyundai Executive and auto industry veteran, mentioned another "graduated" project from Google X. That being the Google Life Science organization focusing on pioneering high-tech health appliances, such as a spoon for people suffering with tremors.

"Like other companies before us. You may have heard of Verily which was Google's health science company that is now an independent entity within the Alphabet structure. So this self-driving car project like Verily will soon be its own independent entity in the world."

Another successful graduated project is Google Brain, which is now a deep learning research project at Google focusing on artificial intelligence. 

In 2015, Google went through a massive restructuring process, leading to the company being transformed into Alphabet while Google became its subsidiary company. The reason behind the reorganization, according to Alphabet CEO Larry Page, is to allow Google to focus on doing what it does best. Meanwhile, the other companies under Alphabet can take the gambles that (they hope) will bring it dominance in new areas.

The gambles, dubbed "moonshot projects," are risky and expensive ones which account for much of Alphabet's capital cost. In the quarter ending in this June, the company saw sales from its moonshot projects hit $185 million, more than doubling sales from the same quarter a year ago. However, in the meantime, it is losing far more money from those efforts, a loss which rose to $859 million for the quarter from $660 million a year earlier.

The losses from the "gambles" category were more than offset by Google's continued growth in ad sales and app store revenue. Its core businesses such as ads, search engine, YouTube channel, and Android apps are contributing 90% of Alphabet's overall revenue. Its sales grew 21% year-over-year, hitting $21.5 billion for the most recent quarter, beating Wall Street estimates.

Will Google's self-driving car project become another successful graduate from X and generate revenue for Alphabet? That story has yet to be written. 

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