Having faced severe criticism over the lack of profitability of its so-called ‘moonshot’ projects, Alphabet Inc. has recently started cracking the whip on some of its subsidiary units in an apparent effort to keep Wall Street in good humor. While Google continues to bring in the lion’s share of revenues for Alphabet, a couple of other group companies like Nest and Fiber are also apparently chipping in and adding to Alphabet’s overall revenues, although their combined contributions pale into insignificance next to what Google alone brings in for its parent company. However, latest media reports regarding Alphabet’s financial situation has now revealed that there is at least one more company within the Alphabet fold that’s making at least some money for its parent, if only on a technicality.
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Verily is Alphabet’s medical technology business that was earlier known as Google Life Sciences. The unit falls under the category of what the holding company describes as ‘Other Bets’ during its earnings calls, meaning the business is not yet financially significant enough to merit a separate listing in Alphabet’s financial reports. However, a couple of weeks ago, Google’s co-founder and Alphabet president, Mr. Sergey Brin, reportedly informed company insiders that Verily is actually making money “on a cash basis”. While the caveat at the end is very likely an indicator that Verily isn’t actually profitable overall, employees and investors alike will probably be happy to know that at least the company isn’t yet another entity that’s proving to be a persistent drag on Alphabet’s balance sheet.
Alongside Nest, Verily is actually the second Alphabet company that has faced some amount of scrutiny and criticism in the media over the past few weeks. While the whole mess surrounding Nest and Tony Fadell got a lot more press, Verily’s CEO, too, got a severe dressing down from Boston Globe’s medical publication, Stat. According to a report published by the aforementioned journal late last month, several key functionaries had left Verily in recent months allegedly because of the “derisive and impulsive” attitude of the company’s CEO, Mr. Andy Conrad. Either way, the company reportedly earned revenues of around $10 million last year, mostly by way of licensing fees from medical institutions and pharma companies. A case in point would be Swiss multinational pharmaceutical giant Novartis, which is apparently working on launching Verily’s smart contact lenses commercially.