Google's Alphabet could become 'the next GE'
For GE, the success of the lightbulb became a foundation for diversification and market dominance in areas like aircraft engines, oil and gas, and financial services.
Similarly, the success of Google search will be the foundation to new products and services like hardware division Nest, its Life Sciences unit, and shipping, logistics, and shopping service, Express.
Baird did a calculation of the potential "billion dollar businesses" Alphabet could grow, based on market opportunities:
- Nest - home automation and connectivity: $20 billion market
- Life Sciences - biotech and medical products: $45 billion market
- Express - local commerce: $1.4 trillion market
- Fiber - broadband internet access: $140 billion market
Baird also highlighted virtual reality, drones, machine learning, automotive tech, and its VC firms Google Capital and Google Ventures as potentially lucrative areas Alphabet is working.
All those divisions existed internally before Google turned itself into Alphabet, but the idea is that now that they'll be able to move faster and be held accountable as independently operated companies under the Alphabet umbrella.
Here's an excerpt from the note (emphasis ours):