 "Alphabet's 'moonshot factory' promises the moon")
Project Foghorn is one of those straight-from-science-fiction concepts we've come to expect from Alphabet, the sprawling conglomerate formerly known as Google. The idea, hatched by the company's X research lab, was to use seawater and chemistry to create fuel that could be refined into gasoline. This gas would be just like the gas we fill our cars with today - except that unlike today's gas, it would not add to global warming because it would recycle carbon dioxide already in the atmosphere.
If the project had been successful - and this was always a big if - it would have changed the definition of green energy and potentially undercut some of the most important industries in the world, not least the oil business. But after two years of trying, and an undisclosed research budget, Foghorn died during a January staff meeting.
The result: Everyone on the team received a bonus (they won't say how much).
X, formerly called Google X, cheekily refers to itself as "the moonshot factory". They are the people behind Google's self-driving car, along with various out-there projects like Loon, an attempt to beam internet access from stratospheric balloons, and Wing, a drone delivery service. Those efforts sit atop dozens of aborted projects - some just ideas, others that consumed years - like a never built jet pack and giant blimps that would haul cargo with the same efficiency as an ocean liner.
That poster points to a central question for both X and Alphabet: What exactly is X's business? And how does a public company invest in such speculative ideas, most of which will never work, without irritating investors or wasting a tonne of money?
Building a research division is an old and often unsuccessful concept. For decades, corporate giants like AT&T, IBM, Microsoft and Xerox have tried, in varying ways, to organise research-oriented groups in hopes of finding ways to cash in on emerging technologies before their competitors.
Those efforts played a role in creating some of the 20th century's most significant innovations. For instance, Bell Labs, then a division of AT&T, invented the transistor, the foundation of modern electronics. But in many cases these research arms did little for the companies that financed them.
Xerox pioneered the graphical interface for computers - the idea that people could navigate with a mouse rather than typing obscure commands on a screen. But it was a young company named Apple that turned that idea into a giant business.
"In general, the model of having a central research lab that the corporation funds for research into new technologies has not produced much for these companies," said G Pascal Zachary, a professor at the Arizona State University School for the Future of Innovation in Society.
X is trying to make corporate research systematic by borrowing working ideas from the past, while adding a few wrinkles - like giving people a financial incentive to admit when something is not working out - in hopes of not making the same mistakes.
This effort comes at a time when Alphabet is trying to enforce financial discipline over a broad empire that was famous for not worrying about nickels and dimes.
Next month will be the first anniversary of Google's surprise announcement that it would remake itself as a holding company. All the ad-driven and highly profitable businesses like search would still be called Google.
While investors still do not know X's budget, they at least have a sense of the limits. In the first quarter, Alphabet lost about $800 million on what it called "other bets" - everything outside Google's core search and advertising businesses - and it will update the figure when it reports its second-quarter earnings on Thursday.
At the same time, now that X is spinning off new companies that will either stand on their own or die, investors are getting something of a yardstick to judge the division's progress. If one of those new companies starts to rival search advertising as a revenue stream, X will be considered a success. If that never happens, it will be a failure (and not the good kind).
For instance, X's self-driving car project, known internally as Chauffeur, recently hired a chief executive and is poised to become a stand-alone company. Another, called Verily, is a life sciences company that has developed, among other things, a glucose-sensing contact lens for people with diabetes, and has licensed that technology to Novartis. Verily became its own company shortly after Google announced the Alphabet reorganisation.
"The thing we created - our product - was Verily, and at the highest level we are being paid as an organisation to do that somewhat regularly," said Astro Teller, X's chief executive, though his actual title is "captain of moonshots." "I would not want to promise anyone internally or externally that we're going to do it once a year."
There are two main differences between X and the corporate research arms of the past. While operations like Bell Labs and Xerox PARC worked on problems that were at least nominally related to their parent companies' core businesses, X employees can work on anything they like. In fact, they are discouraged from straying into Google's main business because Google has its own research group that focuses on machine learning and other computer science topics.
And while Bell Labs and others made huge contributions to basic, university-style research, X projects are conceived as moneymaking enterprises, or things that at least seem as if they could make money sometime in the next few years. With Foghorn, the goal was to turn seawater into gasoline for no more than $5 a gallon - enough that it could conceivably find a market in some European nations where high taxes make gasoline more costly.
X employees avoid talking about money, but it is not a subject they can ignore. They face financial barriers that can shut down a project if it does not pan out as quickly as planned. And they have to meet various milestones before they can hire more people for their teams.
If the project had been successful - and this was always a big if - it would have changed the definition of green energy and potentially undercut some of the most important industries in the world, not least the oil business. But after two years of trying, and an undisclosed research budget, Foghorn died during a January staff meeting.
The result: Everyone on the team received a bonus (they won't say how much).
X, formerly called Google X, cheekily refers to itself as "the moonshot factory". They are the people behind Google's self-driving car, along with various out-there projects like Loon, an attempt to beam internet access from stratospheric balloons, and Wing, a drone delivery service. Those efforts sit atop dozens of aborted projects - some just ideas, others that consumed years - like a never built jet pack and giant blimps that would haul cargo with the same efficiency as an ocean liner.
That poster points to a central question for both X and Alphabet: What exactly is X's business? And how does a public company invest in such speculative ideas, most of which will never work, without irritating investors or wasting a tonne of money?
Building a research division is an old and often unsuccessful concept. For decades, corporate giants like AT&T, IBM, Microsoft and Xerox have tried, in varying ways, to organise research-oriented groups in hopes of finding ways to cash in on emerging technologies before their competitors.
Those efforts played a role in creating some of the 20th century's most significant innovations. For instance, Bell Labs, then a division of AT&T, invented the transistor, the foundation of modern electronics. But in many cases these research arms did little for the companies that financed them.
Xerox pioneered the graphical interface for computers - the idea that people could navigate with a mouse rather than typing obscure commands on a screen. But it was a young company named Apple that turned that idea into a giant business.
"In general, the model of having a central research lab that the corporation funds for research into new technologies has not produced much for these companies," said G Pascal Zachary, a professor at the Arizona State University School for the Future of Innovation in Society.
X is trying to make corporate research systematic by borrowing working ideas from the past, while adding a few wrinkles - like giving people a financial incentive to admit when something is not working out - in hopes of not making the same mistakes.
This effort comes at a time when Alphabet is trying to enforce financial discipline over a broad empire that was famous for not worrying about nickels and dimes.
Next month will be the first anniversary of Google's surprise announcement that it would remake itself as a holding company. All the ad-driven and highly profitable businesses like search would still be called Google.
While investors still do not know X's budget, they at least have a sense of the limits. In the first quarter, Alphabet lost about $800 million on what it called "other bets" - everything outside Google's core search and advertising businesses - and it will update the figure when it reports its second-quarter earnings on Thursday.
At the same time, now that X is spinning off new companies that will either stand on their own or die, investors are getting something of a yardstick to judge the division's progress. If one of those new companies starts to rival search advertising as a revenue stream, X will be considered a success. If that never happens, it will be a failure (and not the good kind).
For instance, X's self-driving car project, known internally as Chauffeur, recently hired a chief executive and is poised to become a stand-alone company. Another, called Verily, is a life sciences company that has developed, among other things, a glucose-sensing contact lens for people with diabetes, and has licensed that technology to Novartis. Verily became its own company shortly after Google announced the Alphabet reorganisation.
"The thing we created - our product - was Verily, and at the highest level we are being paid as an organisation to do that somewhat regularly," said Astro Teller, X's chief executive, though his actual title is "captain of moonshots." "I would not want to promise anyone internally or externally that we're going to do it once a year."
There are two main differences between X and the corporate research arms of the past. While operations like Bell Labs and Xerox PARC worked on problems that were at least nominally related to their parent companies' core businesses, X employees can work on anything they like. In fact, they are discouraged from straying into Google's main business because Google has its own research group that focuses on machine learning and other computer science topics.
And while Bell Labs and others made huge contributions to basic, university-style research, X projects are conceived as moneymaking enterprises, or things that at least seem as if they could make money sometime in the next few years. With Foghorn, the goal was to turn seawater into gasoline for no more than $5 a gallon - enough that it could conceivably find a market in some European nations where high taxes make gasoline more costly.
X employees avoid talking about money, but it is not a subject they can ignore. They face financial barriers that can shut down a project if it does not pan out as quickly as planned. And they have to meet various milestones before they can hire more people for their teams.
©2016 The New York Times News Service