As an independent company, Google started tons experimental projects in search of the next big thing, and as Google’s new parent company, Alphabet has inherited most of those projects. Unfortunately, those projects aren’t cheap, which has always been a source of concern for Google’s investors, and has now caused Alphabet to miss Wall Street’s quarterly profit targets. Because of this, it looks like Alphabet is planning to cut back on some projects, and perhaps even pull the plug on a few of them entirely as it takes steps to “rationalize” its projects and put more focus on projects that are more likely to be successful.
Google parent company Alphabet is taking a hard look at the various projects underway at the company, hinting that the company could be scaling back, or even potentially cutting, certain initiatives. During the company’s Q1 earnings call on Thursday, Alphabet CFO Ruth Porat mentioned twice the company was taking steps to “rationalize” the products and projects that the company develops. “In certain areas where we have had multiple teams developing different approaches to a similar technology, we have been evaluating how to rationalize these approaches, enabling us to increase investments around a smaller, more focused set of opportunities,” Porat said. The comments come as Alphabet’s total headcount swelled by roughly 9,000 year-on-year, and as expenses crept up during Q1, causing the company to miss Wall Street’s profit targets. There are already signs that Alphabet is reining in various projects, including reports that it is selling its Boston Dynamics robotics group, and the recent move to merge two separate drone efforts within the company. Investors have long worried about Google’s spending, especially given the company’s penchant for investing in so-called moonshot projects — from self driving cars to internet beaming balloons — that aren’t directly related to its online advertising business.
