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5 Google Projects and Their 5-Year Prospects

G+ is looking washed up, but what does the future hold for other high-profile Google projects?

By Brad Moon, InvestorPlace Contributor

http://invstplc.com/R7Ojqy

You have to hand it to Google (GOOG). At a time when the technology industry has been throwing money at lawyers while cutting research and development spending, GOOG has made R&D a priority. It’s not afraid to reach far beyond its core competencies, with its infamous X Lab spawning futuristic Google projects like Google Glass and the driverless car.

google-projects-goog
Source: Google

However, even GOOG misses at least as many times as it hits a home run. For every Gmail, there’s a G+ or Wave that doesn’t live up to expectations.

In this gallery, we examine five high-profile Google projects and attempt to handicap their odds of survival five years from now. Will they succeed, fail or end up on the ropes like G+?

Google Projects: Ara

google-projects-goog
Source: Google

One of the vestiges of its short-live Motorola adventure, Project Ara is a perfect example of Google projects that are a weapon disguised as cool technology.

Being able to offer a modular smartphone starting at $50 that’s endlessly configurable, customizable and upgradable — one component at a time — is a shot at blowing up the smartphone upgrade cycle. The highly profitable ritual of buying the latest and greatest phone every one or two years has helped Apple (AAPL) and Samsung (SSNLF) to reach the lofty heights they currently enjoy.

Project Ara is great for consumers and should go a long way toward keeping Android’s dominant market share (the modular smartphones can swap out anything except the GOOG operating system). It would also strike a blow against rival Apple and a Samsung that’s getting too big for its own shoes (at least from GOOG’s perspective).

Project Ara has obstacles to overcome, however — primarily attracting a diversity of high-quality component makers. But the first one launches in 2015, and I fully expect GOOG to still be pushing this as one of its priority Google projects five years from now. It entrenches Android, reduces Google’s reliance on smartphone manufacturers and hits AAPL’s cash cow iPhone — not something GOOG would give up on without a fight.

Google Projects: Glass

google-projects-goog
Source: Google

This is one of those Google projects that had potential, but has been hobbled by the company’s handling of it.

Augmented reality glasses that provide a heads-up display of information along with the ability to record or broadcast point of view video have long been a goal of high tech companies, and the consumer interest is out there, too.

GOOG seemed to have nailed it with Project Glass, but a high price tag combined with a phased rollout have dampened the reception. Google is also striving to make the glasses a symbol of a person’s stature in the technical and cultural world, created a huge backlash against Google Glass. It’s quite possible that “Glassholes” have ruined the entire venture.

There’s a good chance that when Google finally stops teasing and releases Project Glass to the public, the uptake will be disappointing. I suspect it will join the ranks of Google projects that fail to live up to expectations and may never be a popular consumer product.

However, I don’t think Project Glass will be dead within five years. Instead, it will have morphed to licensed technology — the kind adopted by manufacturers who supply specialized industries such as medical or military, an area where it has huge potential.

Google Projects: Loon

google-projects-goog
Source: Google

How do you get Google services to the two-thirds of the globe that currently lacks Internet access? That’s a question GOOG is tackling with one of the more ambitious of its initiatives, Project Loon.

A series of solar powered balloons launched into the stratosphere (over 12 miles from the Earth’s surface) relay a signal from ground-based stations placed roughly 62 miles apart. Customers get their own Internet connection using a receiver that picks up signals the balloons broadcast below.

While other Google projects are aimed at technically advanced countries, Project Loon is intended to help developing countries skip the expensive and time-consuming process of building extensive wired Internet networks — much the same way many of these countries skipped landline telephones and went straight to cellular telephones.

Project Loon has its limitations. Speed is comparable to 3G, so no high-speed gaming, and video needs to be heavily compressed. The balloons are high enough to be out of the way of aircraft, but they only stay up for a few months before eventually dropping to Earth.

However, Project Loon has been tested in New Zealand (it works, at least on the small scale of the pilot project), and it may just be the cheapest way to get reliable, affordable Internet access to the majority of the world’s population. It will still be experimental, but look for Project Loon to be deployed on a larger scale within five years. Some remote part of the planet will be enjoying Internet access, Google services and — of course — plenty of advertising to pay for it all.

Google Projects: Wallet

google-projects-goog
Source: Google

Google Wallet is an example of Google projects that have failed to live up to potential, but just won’t die. The idea of an electronic wallet that handles all your mobile and online purchases is a great one, but there are dozens of companies vying to be in the center.

Added to that, Apple and its refusal to adopt NFC for mobile payments has everyone waiting for standards to be established before signing on. At one point, GOOG seemed on the verge of throwing in the towel on the idea of smartphone payments altogether and simply issuing a credit card like everyone else.

I believe there’s a good chance Apple will spoil the Google Wallet party (such as it is) permanently within five years.

Apple just let investors know it has 800 million credit cards linked to active iTunes accounts. That dwarfs PayPal and even Amazon (AMZN). Add in the advances in biometric security introduced with the iPhone 5s and its Touch ID and it’s just a matter of time before Apple pulls the trigger to introduce its own mobile payment system and Google Wallet gets buried.

Google Projects: Self-Driving Car

google-projects-goog
Source: Google

This is one of those Google projects that could go either way within the space of five years. It’s a high-profile one, but unlike other Google projects such as Wallet, Glass and Ara, there’s no obvious monetization route here — so GOOG could drop it if the going gets tough.

On one hand, there’s significant demand for technical innovation in the auto sector. Just look at how Tesla (TSLA) is doing for the prime example of that. Google’s driverless cars are far more disruptive technology, with the potential to revolutionize travel, reduce congestion in cities and greatly reduce the deaths due to automobile crashes — more than 34,000 in the U.S. alone in 2012.

Google has been testing the cars extensively for years and now says they outperform humans in the chaos of city traffic.

Auto makers are now following Google’s lead, and if all goes well, GOOG self-driving cars should be at the stage where they could be for sale in five years (or GOOG technology is incorporated in cars from traditional auto makers), at least in limited markets.

On the other hand, legal wrangling over liability for accidents in which a driverless car is involved could derail the industry or at least delay it for decades. There are also fears that giving up control would make it too easy for a criminal party to take mass control of driverless cars with disastrous results.

Of all the current Google projects, this is the one I’m really rooting for, but it’s also the one I’m least certain about.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/05/google-projects-goog/.

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