Google To Build Robots: Where’s The Revenue?
Google Inc (NASDAQ:GOOG) announced the foundation ofÂ robotic division in recent days. In an interview with the New York Times on Wednesday, former Android head Andy Rubin revealed Google has purchased seven different robot companies for a secretive new robotics initiative â€” and has placed Rubin at its head. Google is often involved in unusual businesses, but it always seems to have some kind of motivation. The firm’s reasons for jumping into robotics aren’t all that clear, however.
Google Inc (NASDAQ:GOOG) says that its first goal with the robotics division lies in the development of automatons for logistics and manufacturing. That doesn’t mean the firm is just going to sell the robots it develops, Google usually has a more complicated take on markets, however.
Google’s Robotic Mystery
Google is an advertising company. Almost all of the company’s income comes from advertising, and the firm seems little interested in expandingÂ too far beyond that realm. The company offers several different services, but most are designed to bolster the advertising business.
Google search is free, docs is free, Android is free, Drive is free, Maps is free, Fiber is free or micro-margin, Nexus devices are micro-margin. In order to increase ad revenue, Google Inc (NASDAQ:GOOG) wants to increase the amount of people on the internet, increase the amount of time they spend connected, and increasing the quality of those connections.
In order to achieve these goals, Google often works in an indirect manner. Google Fiber is not an attempt to take a chunk of the ISP market. It’s an attempt to force other providers to increase the quality of their devices. Android is a way for Google to get the poorest people in the world on the internet for multiple hours a day.
It’s not all that clear how the robotics project is going to help Google Inc (NASDAQ:GOOG) increase its advertising revenue. There may be a reason behind the purchase, however, and those wondering about the direction should be looking at Google’s other automation project: self-driving cars.
Google Automates Your Workload
The theory behind the Google Inc (NASDAQ:GOOG) self-driving cars is relatively simple. Google wants to drive the auto industry toward automated driving. This will free up the attention of drivers. They can then concentrate on their smart phones, and Google advertising.
The key part of this philosophy is that Google doesn’t really care if it makes money from the self driving car project. It cares that people spend more time on the internet. The company’s robotics program may bear the same kind of fruit.
Robotics in logistics will make two major changes. First it will make shopping on the internet less expensive, and it will reduce the amount of people working in concentration consuming manual labor. Making the internet easier to use increases the amount of time people spend on there. Making shopping less expensive means more people are likely to buy online.
Google Inc (NASDAQ:GOOG) is playing a long game. The company’s robotics project is unlikely to show results next year, but if Google has its way it will start to change the way the world works, and it should add incrementally to the company’s bottom line.
Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.