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The parent company of Google Alphabet is saying goodbye to another of its long-term experimental bets – this time it’s Loon, the gigantic balloons the company hoped to bring the internet to rural areas of the world.
“While we have found a number of willing partners along the way, we haven’t found a way to cut costs enough to create a long-term sustainable business,” said Loon CEO Alastair Westgarth, in a blog post Thursday. . “Developing radical new technology is inherently risky, but it doesn’t make it easy to spread this news. Today, I’m sad to share that Loon is going to step down.”
The cancellation comes after the company in 2020 shut down another experimental company called Makani, which provided wind power from gigantic kites. Alphabet’s “Other Bets”, separate from Google, which provides almost all of Alphabet’s income and profits.
In its third quarter earnings report, Alphabet said Other Bets generated $ 178 million in revenue, up from $ 155 million a year ago. Meanwhile, the companies posted an operating loss of $ 1.10 billion, up from $ 941 million a year ago. Google, on the other hand, made operating profit of $ 12.6 billion on revenues of $ 46 billion.
Loon had recently been in financial trouble, according to a November report by The Information. This report underlined that the main objective of Loon’s leaders for 2020 was to secure its second round of external investment.
“The innovation arc is long and unpredictable,” Westgarth continued in his farewell message. “While this is not the outcome I envisioned for Loon when I arrived four years ago, I continue to be extremely proud of the accomplishments of the entire Loon team and hope our efforts 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 that Loon would pledge $ 10 million to “support nonprofits and businesses focused on connectivity, the Internet , entrepreneurship and education in Kenya ”.
“Unfortunately, despite the team’s revolutionary technical achievements over the past 9 years, the road to commercial viability has proven to be much longer and riskier than expected,” Teller added.
Nominations are open for 2021 CNBC Disruptor 50, a list of private start-ups using cutting edge technology to become the next generation of large public enterprises. Submit by Friday, Feb.12 at 3 p.m. EST.
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