Alphabet, Google’s parent company, is bidding farewell to yet another of its long-term experimental bets – this time, it is Loon, the giant balloons that the company hoped to bring internet to rural areas of the world.
“Although we found several willing partners along the way, we didn’t find a way to cut costs enough to build a long-term sustainable business,” said Loon CEO Alastair Westgarth in a blog post on Thursday. “Developing a radical new technology is inherently risky, but that does not make it easier to spread the word. Today, I am sad to share that Loon will be running out of breath.”
The cancellation comes after the company closes another experimental deal called Makani, which supplied wind power from giant kites, in 2020. Both projects were derived from Alphabet’s “X” business unit, which creates long-term experimental projects, and were accounted for under “Other bets” by Alphabet, unlike Google, which provides almost all of Alphabet’s revenue and all of its profits.
In its third quarter earnings report, Alphabet said Other Bets generated $ 178 million in revenue, compared to $ 155 million a year ago. Meanwhile, companies posted an operating loss of $ 1.10 billion, up from $ 941 million a year earlier. Google, in contrast, earned $ 12.6 billion in operating revenue over revenue of $ 46 billion.
Loon had recently faced financial problems, according to a November report by The Information. That report noted that the main goal for Loon executives for 2020 was to secure their second round of foreign investment.
“The arc of innovation is long and unpredictable,” continued Westgarth in his farewell post. “Although this is not the result I envisioned for Loon when I joined four years ago, I am still very proud of the achievements of the entire Loon team and hope that our efforts will live in ways that we cannot yet imagine.”
In a separate blog post, Astro Teller, CEO of X and chairman of Loon, said Loon would pledge $ 10 million to “support nonprofit organizations and businesses focused on connectivity, the Internet, entrepreneurship and education in Kenya.”
“Unfortunately, despite the team’s innovative technical achievements over the past 9 years, the road to commercial viability has proved much longer and riskier than expected,” added Teller.
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