Finance

Capex at Alphabet’s ‘Other Bets’ Continues to Fall

Reflects reduced investment in Google Fiber 2/02/2018 5:34 PM Eastern

Capital spending at “Other Bets,” the unit of Alphabet containing Google Fiber, Nest and Verily, fell sharply for 2017 amid shrinking spending for fiber-fed broadband services.

Accrued capex at Other Bets was $507 million, down from $1.4 billion in 2016, “primarily reflecting a reduced investment in Fiber,” Ruth Porat, CTO of Google parent Alphabet, said Thursday on the company’s Q4 call.

That reduced investment follows the company’s decision to pause expansion of Google Fiber as it focuses on existing deployments and less expensive wireless broadband alternatives. This week, the company also confirmed that it is winding down operations of Webpass, the wireless broadband company acquired in 2016, in Boston. Other Webpass market deployments are not affected.

RELATED: Google’s Webpass Backing Out of Boston

Revenues at Other Bets for Q4 hit $409 million, up from $262 million in the year-ago quarter. The unit posted an operating loss of $916 million, narrowed from $1.08 billion.

For full-year 2017, Other Bets revenues were $1.2 billion, up 49%, driven by Nest, Fiber and Verily, while the operating loss for 201 was $3.4 billion, trimmed slightly from a loss of $3.6 billion in 2016.

Porat noted that Nest “turned in a strong holiday performance,” with Nest products also becoming available in 12 new countries in 2017, more than double the number from 2016.

Turning to YouTube TV, Google did not announce a subscriber figure (a CNBC report puts it at about 300,000). But Sundar Pichai, Google’s CEO, talked up YouTube TV new multi-year partnership with Major League Soccer’s LA Football Club.  

YouTube TV is on board as the “Official Live TV Partner” and “official Video Partner” of the club, and will be the exclusive home for all locally televised English-language LAFC matches. YouTube TV will also carry the team’s nationally televised matches on ESPN, Fox and FS1. LAFC jerseys will also don the YouTube TV logo.

In addition to showing locally televised LAFC matches on a designated YouTube TV channel (they will be geo-fenced and offered only in the L.A. market), the broadcasts will also feature a 30-minute pre- and post-game show from the YouTube TV Studio set at Banc of California Stadium.

Turning to Google’s hardware business, Pichai said device shipments in Q4 more than doubled year-over-year, and that the company sold “tens of millions” of products such as Google Home, the Google Home Mini, Google Home Max and Chromecast streaming adapters in 2017.

YouTube this week also expanded its YouTube Go app to more than 130 countries. That offering lets users download and view videos (and share them with others using device-to-device links) when there is a limited or slow data connection. This video offers more detail about that offering: 

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