Currently, The coronavirus pandemic has reduced demand for Google’s advertising service and rattled Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG) stock. Now, the pandemic is impacting Alphabet’s other bets. Currently, the operations that make up Alphabet’s other bets are small businesses with huge potential.
Alphabet’s notable other bets are Waymo and Verily, which focus on self-driving and life-science, respectively. The other bet is Loon, which provides Internet access in remote regions using high-tech balloons.
Coronavirus weighs on Alphabet’s other bets
Waymo has temporarily halted all of its driving operations, according to a TechCrunch report. The company wants to help curb the spread of the deadly coronavirus. Waymo has been providing ride-hailing and goods delivery services using self-driving vehicles, which sometimes have human drivers in them.
Currently, Arizona is the only state where Waymo offers its ride-hailing service. The state has recorded more than 150 coronavirus cases and several deaths. Specifically, Waymo offers its ride service in Phoenix, which is now in a state of emergency due to the coronavirus.
Suspended services will likely cause Waymo to miss sales. As a result, lower sales could slow down the growth in Alphabet’s other bets. In 2019, the other bets generated $659 million in revenue compared to $595 million the previous year. However, Waymo expects to resume its operations in two weeks.
Waymo’s suspended services come as the demand for ride-hailing has taken a hit from coronavirus. Last week, Uber Technologies (NYSE:UBER) disclosed that the demand for its ride service has fallen as much as 70% in markets hit the hardest by the virus. Notably, Uber has slashed some spending to enable it to cope amid the slow business environment.
Waymo raised $2.25 billion to further its goals
Early this month, Waymo raised $2.25 billion in fresh capital in its first fundraising involving external investors. As a result, the company will deploy additional cash toward developing its technology and operations.
Alphabet counts on units like Waymo to diversify its revenue sources. Currently, the company relies on the advertising market for most of its revenue. However, there are risks in the advertising market. Google faces more competition and regulators question the success of its advertising business. Alphabet’s other bets span multiple industries.