A lot of dreams can be bought with the mountain of cash that Google has. The company is often seen as a playground for computer scientists as it pursues projects such as a global network of balloons for internet connectivity and driverless cars. The firm isn’t seen as being touched by the normal commercial realities, even though people within the company tend to dismiss such assumptions. Head of the self-driving cars division, Chris Urmson has said that they aren’t a chocolate factory of Willy Wonka. He said that they focus on problems that aren’t being resolved and make products for doing so.
One of the most conspicuous setbacks have been suffered by one such ambitious project; last week, the smart glasses initiative called Google Glass was sent back to the drawing board. Just like the driverless cars, Google Glass is also a product of the experimental lab called Google X. The company has suspended sales of the test version of the glasses and has also halted plans of bringing out a revised version as new management within the company was handed the project. This is unfortunate timing for the search engine giant with Wall Street buzzing about the impact of the company’s increasing spending on its profit margins.
Last year, in the first nine months, Google’s research and development costs saw a 35% increase and operating costs increased by 30% whereas revenue only saw a 20% rise. Even though Google has made efforts to portray the changes at Glass as the next logical stage for a product that will be shifted into full commercial existence, they weren’t enough to disguise the scale of this setback. Critics had already had a look at Glass and accused the company, as always, for undermining the personal privacy of people for its own gain.
Last month, the chairman Eric Schmidt had said that a new version of Glass would soon go on sale, but this decision has been reversed. In recent days, the company made the decision of Google Glass under the control of former Apple executive, Tony Fardell, who also runs the smart-home division of Google Nest. The first move made by the executive was to take the controversial product back to the drawing board with no plans of bringing it to the public without putting some thought into it. While analysts have said that wearables are the next big thing and setbacks shouldn’t be seen as a reason to stop, there have been questions regarding the company’s management and investment discipline.
Google X was established to come up with ideas about ambitious products that seemed technologically impossible and then challenging engineers to achieve them. But, Wall Street wants the company to give more financial disclosure about its big leaps. Chief executive and co-founder, Larry Page has argued that this would allow competitors to get a whiff of what’s cooking. However, investors are fearful of a lack of discipline if they don’t get an insight about the firm’s activities and plans of the future.