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Google’s discipline with moonshot spending

Google isn’t used to blowing tons of money on innovative projects, including self-driving cars, for instance. Such projects could count on less than 10% of the company’s capital expenditures in 2015. The same is true for Alphabet, Google’s parent company.  

That was the first time Alphabet allocated funds outside Google’s core, which traditionally includes the following fields: advertising, search, Android, YouTube, etc. In this case, Google dared to pay more attention to such long-term projects as self-driving cars, fiber-based internet access, as well as internet-bearing balloons.      

Last year capital expenditure for the company’s core products reached up to$8.8 billion. Most funds were spent on data centers as well as other facilities. As for Other Bets, they accounted for about for $869 million in capital spending. By the way, most of the Other Bets spending were pumped into Google Fiber, currently offered by Alphabet in nine cities.     

Ruth Porat, Alphabet CFO told that the company had to make a series of tough calls and there was a so-called “disciplined envelope” as for Other Bets.  In most cases, some of Alphabet’s most impressive moonshots were in Google itself. Promising projects included virtual reality and machine learning.

     

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