Alphabet, the parent company of Google, mainly generates revenue through advertising. However, its “Other Bets” category grabs attention when the company reports its earnings.
It is basically designed to fund projects that might succeed in the future. Google Health, a Google venture, might be an amazing candidate for Other Bets. We recently covered THE CHECKUP and its capabilities including AMIE sometime back
Alphabet Inc. is a multinational American technology conglomerate headquartered in Mountain View, California.
It was founded in 2015 by Larry Page and Sergey Brin. Alphabet’s main purpose was to house all of Google’s ventures that went beyond its core advertising business.
These ventures were called “Other Bets” and included things like life science research (Verily), self-driving cars (Waymo), Google Fiber, etc.
Alphabet views these “Other Bets” as early-stage businesses that can potentially succeed in the long term.
Alphabet oversees several innovative projects that could transform the future of several industries, such as healthcare and transportation.
Alphabet generated $307.39 billion in revenue in 2023.
Google Health is a prominent Other Bet that focuses on healthcare research. One of Google Health’s key areas of research includes exploring the potential of artificial intelligence in healthcare.
Although financial data is limited, Google Health has the potential to revolutionize health care and open up new markets.
Other Bets Overview
Google’s Other Bets is a list of eight companies, from life sciences to technology to self-driving companies.
- Access: This is an Alphabet subsidiary that runs Google Fiber. It offers high-speed broadband service in 12 US metropolitan areas.
- Calico: It is a reach-driven company that harnesses technologies that could increase our lifespans and longevity. Their website says that they aim to increase lifespan ethically, using cutting-edge science and technology.
- CapitalG: It is Google’s growth investment arm. It supports a portfolio of companies like Airbnb, Lyft, and Duolingo by providing tactical advice in key functional areas such as engineering, product, sales, and marketing.
- Google Venture: This is Google’s venture capital arm. It has invested in companies that are innovating in life science, healthcare, artificial intelligence, robotics, transportation, cyber security, etc. Its five main branches include:
- Consumer: Uber, Medium, Nest, etc.
- Life Science and Health: 23andme
- Data and AI
- Enterprises: slack, Hubspot
- Robotics and Hardware
- Nest: Nest’s main mission is to create smart home devices. It has recently expanded its product line which includes:
- Nest Learning Thermostat
- Nest Thermostat E
- Nest Temperature Sensor
- Nest Protect
- Nest Hello
- Nest Secure
- Verily: Its main purpose is to collect health data and then analyze it to develop better treatment and care plans. Verily received a $800 million investment in 2017 from Temasek to accelerate its strategic programs.
- Waymo: It began as Google’s self-driving car project, but it is now an independent company. Their mission is to make it safe and secure for everyone to drive around without the need for a driver.
- X: Google’s arm aims to solve tough problems using new technology. Verily is one of X’s projects and an “other bet.” Some of X’s other projects include delivery drones, internet balloons, and cybersecurity.
Other Bet’s revenue for Q4 in 2023 is $657 million and $495 million in Q1 2024 which is 71% up from Q1 2023 288 million. Interestingly the cost has come down from $1.2B to $1B down by ~17%
This is an increase of 121.2% from last quarter and 190.7% from one year ago.
Other Bets generates revenue mostly through:
- Internet and TV services
- Licensing and R&D services
- Nest branded hardware
Google Health: A Prominent Other Bet
Google Health was initially created to serve as a medical and health-related data record that users could voluntarily upload. However, it has now started focusing on research and innovations in the healthcare industry, particularly AI-related ones.
Google Health’s primary agenda now seems to be improving search results for health-related queries on Google, funding, and conducting health-related research. Google Health’s focus on AI in healthcare and using technologies for better health outcomes can transform healthcare.
This makes it a perfect Other Bet, whose main agenda is to support and fund businesses that might succeed in the future.
As Alphabet continues to fund health research, Google Health is at the forefront of this transformative vision.
