For most of us, the Alphabet is still a set of letters (consonants and vowels) that help us pronounce all that we need to. But Google, which reorganized itself under a holding company with that same name, is here to tell us that each letter can do a whole lot more.
So Alphabet’s GOOGL most illustrious letter component is “G” because it stands for Google, or gateway if you like, because of the company’s propensity to push accepted frontiers, explore new realms and “boldly go where no man has gone before.”
Google brought the web to us and saw to its proliferation. But it’s not stopping there. True to its philosophy of exploring the universe and routing it back to us, the company is moving into other areas like automotive, healthcare, high-speed Internet, smart home and improved city life.
Is Automotive the “A” of Alphabet?
Alphabet appears to have two goals in auto. The first with respect to its smart dashboard that allows u to listen to music, get navigation and other pointers to smoothen out your rough days.
The second and more intriguing is its self-driving automobile because heaven only knows what it plans to do with the thing! Will it have a fleet to transport packages or deliver food? Will it run a taxi service? Or will it manufacture and sell them just like General Motors Company GM and Ford Motor F? Google isn’t planning a launch before 2020, so I guess we’ll find out soon enough.
Meanwhile the project has accumulated some notable talent: former General Motors, Hyundai and TrueCar executive John Krafcik who is now CEO. A wise choice considering that he has the knowledge, experience (from manufacturing to sales) and contacts that could move the needle for Google. Former Ford and Boeing CEO Alan Mulally is also a member of the board and former GM R&D head Lawrence Burns is now a consultant for Google Auto.
Alphabet has been testing its self driving cars over the past few years and recently started testing on public roads as well. Its USP is safety because it’s currently thought that automated driving will greatly reduce accidents arising from driver distractions.
A Toast to Your Heath
Google’s Healthcare initiative is actually two.
The first is the majority investment in a company called Calico, which is determined to find cures for age-related diseases, extend life expectancy and, wait for it, “solve cancer.” It’s headed by former Genentech CEO Arthur Levinson. The company is not about revenue or profits yet and depends instead on investments from folks like Alphabet and AbbVie ABBV to develop drugs and do research.
Alphabet has acquired an interest in 23andMe, which maintains a fast-growing genomics database. In July this year, it partnered with AncestryDNA of Ancestry.com, which is one of the largest family research organizations with a database of over a million people and family trees going back hundreds of years. This can greatly help Calico research the role of genes in aging and develop suitable drugs. Calico also has drug development and research agreements with the University of Texas Southwestern Medical Centerand the Buck Institute for Research on Aging.
When Google announced its reorganization as Alphabet, the first new company that emerged was Life Sciences. And it’s not without reason because this former Google X project has advanced quite a bit. Its mission is to help us with the detection, prevention and management of serious health conditions.
It has already developed a contact lens to detect diabetes from teardrops that will go into clinical trials next year. It has also partnered with Sanofi for further diabetics research and medical equipment company Dexcom to develop a cheap and convenient glucose monitoring device. A patneship with Novartis was intended to develop and license smart lens technology.
With its purchase of Lift Labs, it now has a smart spoon for patients with hand tremors (as in Parkinson’s disease). A nano particles pill for early detection of cancer or heart disease is in the works and research on mental illness (new approach to detection, discovery, study, understanding treatment, etc.) has been initiated.
And if all this isn’t enough, it is also collaborating with the Institute for Systems Biology (ISB) to create the Cancer Genomics Cloud. So a perfect blend of technology, biotech and pharma (and it is hiring accordingly).
The Internet Is Never Far from Mind
Alphabet’s Project Loon is a fleet of helium-filled balloons flying 20km above the earth where wind direction and speed are stratified. Software algorithms determine optimal position for the balloons and move them there to create a network that can beam Internet services. The life of a balloon is currently between 3 and 6 months, before which it needs to be replaced.
While the project was initially experimental with remote areas in mind, Alphabet has aroused the interest of the Sri Lankan government, which has signed an MoU for large-scale deployment covering the country. African countries are also showing interest. Data speeds have also improved considerably since inception indicating increased commercial viability.
Alphabet has registered two patents with the FAA for drones forming a part of Project Titan with the goal of expanding Project Loon with higher-altitude balloons.
The company will be selling the balloons to telecoms as an infrastructure provider and won’t be involved in customer relationships.
And let’s not forget Google Fiber, which offers broadband Internet and cable TV to a growing number of locations across the U.S.
Alphabet Building a Nest Too
Depleting natural resources and global warming are growing concerns today so there is an ongoing move to make usage more efficient. There are perhaps few companies that are as aware of this challenge as Google considering the amount it consumes to run and cool its huge data centers.
But through its purchase of a smart thermostat maker called Nest in 2014, Google decided to bring these efficiencies to us as well. Nest is neither the first nor the only supplier in the market, but there are a few reasons why Google can have a more far-reaching effect on the market than perhaps some of the others.
The company came to Google with a Learning Thermostat and a smoke and carbon monoxide detector called Protect. Google said at the time that Nest would mark its entry into the smart home segment, continuing to create more devices that would be increasingly “useful, intuitive and thoughtful.” Google hasn’t been great at making devices, but Nest does bring some design expertise.
Its devices are simple to set up and use (free apps for both iOS and Android, Heat Link attachment comes with built-in Wifi to directly connect to the Internet) and good to look at, things that can encourage big utility companies to distribute them for free (as Southern Co is doing) or offer huge discounts to encourage usage (as Exelon division ComEd is doing).
ComEd in fact has set a target of selling a million devices in Chicago and Northern Illinois based on its up to $120 subsidy on the $249 Nest or Ecobee smart thermostats that are part of the program. Utility companies are interested in these devices because of the strain on their grids during peak hours or busy days, which increase wear and tear and therefore maintenance costs.
Google has held the company for little over a year and already big things are starting to happen; doesn’t matter if Apple doesn’t want to sell the things any more. Nest continues to launch new devices such as the security camera through its DropCam acquisition. Nest Weave and the Works With Nest developer program are working on how to get your smart home devices to talk to each other (we’re talking lights, locks, fridges, et al).
Need Help on the Sidewalk?
Alphabet recognizes that the exploding urban population across the world will lead to new socioeconomic, health and environmental challenges over the next few decades. So it wants to equip us with the technology and knowhow to deal with these challenges. The very broad description kind of indicates that this is a plan still in the making, but Alphabet has set up a project called Sidewalk Labs to work on ideas.
Cost of living, energy usage and transportation are the more pressing urban problems at the moment, so these are the focus areas it as of now. Since cities are the jurisdiction of local government authorities, the company needs to work with these bodies is it is to make any headway.
A case in point is New York City, where Sidewalk Labs is based. Alphabet has acquired the two companies, Control Group and Titan, which are in charge of setting up and financing the Mayor’s pet “Intersection” project to turn 10,000 phone booths into Wifi hubs. The benefit: people within 150 feet of these hubs will get free wireless Internet. The booths will also offer free phone charging, phone calling, Internet browsing, etc. Google (and the city) will make money from the ads on the booth walls.
Last Word
Alphabet/Google is so big in search, OS, Android, apps, wearables, cloud, etc. that it’s easy to overlook just how much it is doing in other areas. Yes, it has a lot of data on us, but when you think about how much it’s giving back to society, the vision and faith that drives the founders, you get the feeling that Google is the future.
Google carries a Zacks Rank #2 (Buy). Other technology stocks worth considering are IZEA, Inc. IZEA, MeetMe, Inc. MEET, Pandora Media, Inc P and Zillow Group, Inc. ZG, all sporting a Zacks Rank #1 (Strong Buy).
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