Capex for Alphabet’s ‘Other Bets’ Falls Off a Cliff

Massive cutback in Q3 follows big changes in Google Fiber’s game plan
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Capital expenditures for “Other Bets,” the unit of Alphabet that contains Google Fiber, fell significantly in Q3 2017 – to $77 million, from $324 million in the year-ago period.

The big change in spending follows a decision by the company to hit the pause button on Google Fiber’s original, ambitious expansion plans, and as it puts more emphasis on less expensive wireless broadband alternatives.

RELATED: Google Fiber Pauses Expansion Plans, Laying Off Some Staff

That shift in strategy also followed Google Fiber’s acquisition of Webpass, a wireless broadband company, in the fall of 2016. Google confirmed last week that Charles Barr, founder of Webpass, had left the company, but didn’t elaborate on the reason for his departure.

“Webpass has a great model for serving customers with a variety of access technologies. They've grown their customer base over the past year since Fiber acquired them, and we're excited to continue that growth,” a Google spokesperson said.

RELATED: Google Fiber Won't Put TV on the Menu in Two New Markets

Other Bets, which also includes Nest, posted Q3 revenues of $302 million, up from $197 million a year earlier, and an operating loss of $812 million, narrowed from $861 million.

Jan Dawson, founder and chief analyst at Jackdaw Research, summed up the capex situation at Other Bets in this tweet:

In case you’re wondering how Alphabet feels about Google Fiber at this point… pic.twitter.com/iYcAlhuBot

— Jan Dawson (@jandawson) October 26, 2017

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