A delivery drone carries a box in Switzerland. (Photographer: Stefan Wermuth/Bloomberg)

Alphabet's Drones and Internet Balloons Are Full Businesses Now

(Bloomberg) -- Alphabet Inc. is releasing two experimental projects from its X lab, adding new independent businesses to its growing roster of non-advertising entities.

Wing, which is developing a drone delivery system, and Loon, which uses balloons to bring internet signals to remote parts of the world, will graduate from the company’s "moonshot" lab and become full-fledged businesses under its Other Bets unit, a spokeswoman for X said in an email. Other Bets already includes businesses like self-driving car unit Waymo, cybersecurity company Chronicle and life sciences company Verily.

Alphabet wouldn’t say whether Loon and Wing are generating revenue or profit, but a move out of the innovation lab suggests the two projects have become established enough to at least have a clear business plan and path to profit. Alphabet pours billions each year into Other Bets, which had an operating loss of $3.6 billion in 2017. The company argues the spending is justified because any of the individual projects could become major businesses in their own right over time.

“Loon and Wing are two of X’s best experiments,” Astro Teller, who heads X, said in a video post. “Today, unlike when they started as X projects, Loon and Wing seem a long way from crazy.”

Alphabet named Loon and Wing’s project leaders, Alastair Westgarth and James Ryan Burgess, as heads of the new units.

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