Google’s business model (now Alphabet) started as a search engine to navigate the web, and over the years, it acquired other companies like YouTube and Android. It placed other bets on what the company defines as “moonshots.” Among the other bets are companies like Verily, Nest, Access, and Waymo.
Admob
AdMob is a mobile advertising company that was founded in 2006 by Omar Hamoui whilst a business student at the Wharton School.
The company was initially headquartered in Mountain View, California, but later moved to San Mateo. AdMob started as a platform that enabled mobile app developers to monetize their apps with advertisements.
Mandiant is a cybersecurity firm that was founded as Red Cliff Consulting in 2004 by Kevin Mandia. Mandia is the creator of OpenIOC (Open Indicators of Compromise), a scheme for the description of multiple characteristics that identify threats, evidence of compromise, and the methods of security hackers.
The company rose to prominence in early 2013 after it documented evidence of Chinese cybercriminals attacking at least 141 American and other English-speaking organizations.
FireEye then sold the company to Symphony Technology Group in June 2021, with Google then acquiring it in March 2022 for $5.4 billion. Ultimately, various assets were incorporated into the Google Cloud division in September of that year.
Looker
Looker (Looker Data Sciences) is a computer software company that was founded in Santa Cruz, California, by Ben Porterfield and Lloyd Tabb.
Looker initially offered a product that enabled teams with only a basic understanding of SQL to explore, save, and download data.
At the time, Google’s cloud computing division was a distant third to powerhouses Amazon and Microsoft in terms of revenue.
However, Google Cloud’s BigQuery tool for large database management had performed well and the acquisition was seen as a way for the company to double down on analytics.
Kaggle
Kaggle is an online community for data scientists, machine learning engineers, and other enthusiasts where it is possible to participate in science competitions, collaborate on open-source projects, and access a wide range of datasets.
Kaggle was founded in 2010 by Australian data scientist Anthony Goldbloom and software developer Ben Hamner.
The community was launched with an inaugural machine learning competition, with subsequent competitions used to improve gesture recognition for Microsoft Kinect and further research into HIV and traffic forecasting, among many other initiatives.
Sidewalk Labs is an urban planning and infrastructure company whose mission is to address issues such as energy consumption, traffic congestion, and the high cost of living.
Sidewalk Labs was founded by Daniel Doctoroff in 2015. Doctoroff is an American businessman and urban planner who once served as the CEO of Bloomberg L.P. and Deputy Mayor under New York City Mayor Michael Bloomberg.
After Doctoroff stepped down due to poor health in late 2021, Sidewalk Labs was folded into Google. The company’s core products were subsequently incorporated into Google’s urban sustainability efforts, with Alphabet also spinning out Sidewalk’s Canopy Buildings project as an independent company.
Calico
Calico Life Sciences LLC is a Google subsidiary involved in health research and development, biotechnology, and life sciences. In Google’s 2013 Founders Letter, Larry Page described the company’s core focus as “health, well-being, and longevity.”
Calico was founded as a Google project in 2013 by Bill Maris, an entrepreneur and venture capitalist who also served as the company’s VP of Special Projects. The current CEO of Calico is Arthur D. Levinson who is also the Chairman of Apple Inc.
CapitalG
CapitalG is Alphabet’s independent growth fund. Founded as Google Capital in 2013, the firm was only made public in 2014 and was renamed after the Alphabet restructure in 2016.
CapitalG was founded by David Lawee (a former Google VP of Corporate Development and its first VP of Marketing). Lawee was also joined by partners Gene Frantz, Derek Zanutto, Jesse Wedler, and former Google Director of Sales & Business Operations Laela Sturdy.
The company’s investment focus is on emerging, long-term technology trends that are poised to drive disruption in their respective industries.
Some of CapitalG’s notable investments include SurveyMonkey, Credit Karma, Glassdoor, Duolingo, Snap Inc., Airbnb, Stripe, Robinhood, Lyft, and NEXT insurance.
DeepMind
DeepMind is an AI research laboratory based in London that was founded by Demis Hassabis, Shane Legg, and Mustafa Suleyman.
The company started with the development of neural networks that learned to play early video games and then were able to beat human players at more complex games such as Go.
Google acquired DeepMind in 2014 for an estimated $400 million, with Hassabis noting at the time that the deal would “allow us to turbo-charge our mission to harness the power of machine learning tools to tackle some of society’s toughest problems and help make our everyday lives more productive and enjoyable.”
Google Fiber
Google Fiber is a subsidiary that provides broadband internet and IPTV to homes in the United States via fiber-to-the-premises. The service was first introduced to residents of Kansas City, Kansas, as an experimental project in 2011 to provide ultra-fast internet access.
However, in December 2012 at The New York Times’ Dealbook Conference, Google Executive Chairman Eric Schmidt noted that Google Fiber had become a viable businessmodel.
Google Fiber is now available in a selection of cities across Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois, Iowa, Nebraska, North Carolina, Tennessee, Texas, Utah, and Washington.
Wing
Wing is a Google subsidiary associated with drone delivery and unmanned air traffic management systems. The company started life as a Google X project and now designs, manufactures, and deploys lightweight delivery drones.
Aircraft are autonomous in the sense that they use advanced vision to understand their environment. They can also plan their own routes, check for system errors, and respond to delivery requests on demand.
Wing was the first drone delivery company to receive certification from the Federal Aviation Administration. The certification enabled the company to operate as an airline and has since performed over 300,000 deliveries across the US, Australia, and Finland.
Verily Life Sciences
Verily Life Sciences (formerly Google Life Sciences) is a research organization that was founded in 2015 as a subsidiary of Alphabet Inc. Google Life Sciences was a division of Google X until Sergey Brin announced that it would transition to an independent subsidiary.
Verily aims to apply technology and science to improve healthcare outcomes for people around the world. The company has a core focus on innovative solutions that tackle difficult health problems related to chronic and infectious diseases.
Some of the Verily’s notable projects include smart contact lenses for glucose monitoring, wearable devices for tracking tremors in Parkinson’s disease patients, and the development of a COVID-19 testing program.
GV Management Company LLC
GV Management Company is a venture capital firm based in Silicon Valley that was formerly known as Google Ventures. GV was founded in 2009 as the venture capital arm of Google but, like Verily, became an independent entity under Alphabet in 2015
GV provides seed, venture, and growth stage funding to tech companies in a variety of industries that includes healthcare, AI, software, hardware, life sciences, transportation, agriculture, and cyber security. Its investment portfolio includes companies such as GitLab, Verve, Stripe, Bowery, Dapper Labs, Determined AI, and Nimble.
Intrinsic Innovation LLC
Intrinsic is an Alphabet subsidiary that was established in 2019 to develop software and robotics technologies for advanced manufacturing. Intrinsic aims to make industrial robots more accessible, flexible, and useful with software that simplifies the programming and operation of associated systems.
The technology behind Intrinsic Innovation was developed at X for five years before it became an independent Alphabet company. Today, Intrinsic is focused on identifying partners in the electronics, healthcare, and automotive industries that are already using industrial robotics.
The company is currently headed by CEO Wendy Tan White and employs some of the world’s leading robotics experts. These include CTO Torsten Kroeger, innovator Rainer Bischoff, and reinforcement learning luminary Stefan Schaal.
ITA Software
ITA Software is a travel industry software company that was founded in 1996 by a group of MIT computer scientists. The company’s first product was a software platform called QPX which provides airlines and travel agencies with real-time pricing and availability information for flights, hotels, and car rentals.
Jigsaw is a technology incubator and think tank that was created by Eric Schmidt in 2010. The company’s mission is to use technology to address some of the most pressing global security challenges, such as those related to cyber-attacks, online censorship, and political extremism.
The company’s projects include developing tools to detect and prevent online harassment, combat disinformation and propaganda, and improve digital security for vulnerable populations such as journalists and human rights activists.
Other projects include a 2016 collaboration with the Wikimedia Foundation to better understand harassment on Wikipedia using machine learning. Jigsaw also worked with The Washington Post in 2017 to launch a community-driven repository of analogies that help explain complex tech jargon to the layperson.
Google is an attention merchant that – in 2022 – generated over $224 billion (almost 80% of revenues) from ads (Google Search, YouTube Ads, and Network sites), followed by Google Play, Pixel phones, YouTube Premium (a $29 billion segment), and Google Cloud ($26.2 billion).
Of Google’s (Alphabet) over $282 billion revenue for 2022, Google also generated over a billion dollars from a group of startup bets, which Google considers potential moonshots (companies that might open up new industries). Those Google’s bets also generated a loss for the company of over $6 billion in the same year. In short, Google is using the money generated by search and betting it on other innovative industries. Of Google’s (Alphabet) over $282 billion revenue for 2022, Google also generated over a billion dollars from a group of startup bets, which Google considers potential moonshots (companies that might open up new industries). Those Google’s bets also generated a loss for the company of over $6 billion in the same year. In short, Google is using the money generated by search and betting it on other innovative industries.
Google is an attention merchant that – in 2022 – generated $224 billion (almost 80% of its total revenues) from ads (Google Search, YouTube Ads, and Network sites), followed by Google Play, Pixel phones, YouTube Premium (a $29 billion segment), and Google Cloud ($26.3 billion).
The traffic acquisition cost represents the expenses incurred by an internet company, like Google, to gain qualified traffic – on its pages – for monetization. Over the years, Google has been able to reduce its traffic acquisition costs and, in any case, to keep it stable. In 2022 Google spent 21.75% of its total advertising revenues (over $48 billion) to guarantee its traffic on several desktop and mobile devices across the web.
Alphabet generated over $282B from Google search and others, $32.78 billion from the Network members (Adsense and AdMob), $29.2 billion from YouTube Ads, $26.28B from the Cloud, and $29 billion from other sources (Google Play, Hardware devices, and other services).
YouTube was acquired for almost $1.7 billion in 2006 by Google. It makes money through advertising and subscription revenues. YouTube advertising network is part of Google Ads, and it reported more than $29B in revenues by 2022. YouTube also makes money with its paid memberships and premium content.
In 2022, Google generated over $282 billion in revenues, of which over $162 billion from Google Search, over $29 billion from YouTube Ads, and almost $33 billion from Network Members’ properties. In addition, Google generated over $29 billion in other revenue, over $26 billion from Google Cloud, and over a billion dollars from other bets.
Over the years, Google has acquired and integrated many startups, which helped build the overall Google business model. These acquisitions comprise:
YouTube
Android
Verily.
Nest.
Access.
And Waymo.
Is YouTube a subsidiary of Google?
YouTube was acquired by Google, in 2006, for $1.65 billion. YouTube is now integrated into Google’s business model, representing an advertising machine that generated over $28 billion in advertising revenues in 2021.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
