Google parent company Alphabet is saying goodbye to another of their long-term experimental bets – this time loon, the gigantic balloons the company had hoped to bring the internet to rural areas of the world.
“While we’ve found a number of willing partners along the way, we haven’t found a way to keep costs low enough to build a long-term, sustainable business,” said Alastair Westgarth, CEO of Loon, in a blog post on Thursday. “Developing radical new technologies is inherently risky, but that doesn’t make it any easier to get this news out. Today I am sad to share that Loon is going to wind down.”
The termination comes after the company closed another experimental company called Makani in 2020, which provides wind power from gigantic kites. Both projects emerged from Alphabet’s “X” business unit, which is hatching long-term experimental projects, and have been reported under Alphabet’s “other bets” are different from Google, which provides almost all of Alphabet’s sales and profits.
In its earnings report for the third quarter, Alphabet said Other Bets had revenue of $ 178 million, compared to $ 155 million last year. Meanwhile, the companies posted an operating loss of $ 1.10 billion compared to $ 941 million the previous year. In contrast, Google had $ 12.6 billion in operating income on sales of $ 46 billion.
Loon recently had financial problems, according to a November report by The Information. This report found that the top goal for Loon executives for 2020 was to secure the second round of external investment.
“The innovation arc is long and unpredictable,” Westgarth continued in his farewell post. “While this is not the result I envisioned for Loon four years ago, I continue to be very proud of the accomplishments of the entire Loon team and hope that our endeavors will continue in a way that we cannot yet imagine . “
In a separate blog post, Astro Teller, CEO of X and Chairman of the Board of Directors of Loon, said Loon will pledge US $ 10 million to “support nonprofits and businesses focused on connectivity, internet, entrepreneurship and education in Kenya” .
“Unfortunately, despite the team’s breakthrough technical achievements over the past 9 years, the road to economic viability has proven to be much longer and riskier than hoped,” added Teller.
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