Alphabet quietly made its experimental balloon project a full-fledged corporation — a first step to a new Google spinout (GOOG, GOOGL)

SunMag

News / SunMag 21 Views 0

Sergey Brin

Alphabet& has& quietly upgraded its internet balloon& initiative from a research lab "project" to an official& corporation, setting the stage for what could be the latest standalone business to spin out from& Google's parent company.

Project Loon, which develops solar-powered balloons that beam internet access down to earth,& has been incorporated as Loon Inc, according to regulatory filings.&

Business Insider first noticed Loon was listed as "Loon Inc." in a recent& filing to the FCC& seeking permission to float Loon balloons above Puerto Rico and provide internet access to areas affected by hurricane Maria. Previously, Loon was officially referred to as a project under Alphabet, or under X, the Alphabet subsidiary dedicated to creating ambitious "moonshot" technologies.

Loon's incorporation is a sign that Alphabet may& be preparing& to spin Loon out of the X division and let it operate as its own company. Alphabet went through a similar process last year with Waymo, the company formed out of X's self-driving car project. X also spun out Dandelion, a geothermal energy company, earlier this year, but Dandelion is not under the Alphabet umbrella.

A Loon spokesperson declined to comment.

Next candidate

One person close to X told Business Insider a few months ago that Loon was the next likely candidate for a spin out of X. In February, Alphabet X's business tapped& Alastair Westgarth, a telecom industry veteran, to be the new CEO of Project Loon.&

Getting spun out from the mothership often& indicates that Alphabet believes& an experimental technology or product has matured enough to be ready for commercialization. That gives the& spinout company the freedom to pursue its own business objectives,& while at the same time subjecting it to the financial pressures of an independent business.

Google has previously said that it believes Loon's& "floating cell towers in the sky" could one day become a business that& generates billions of dollars in revenue. So far however, Loon has only seen limited deployments in areas like Sri Lanka, Peru, and more recently Puerto Rico.

As a standalone company, Loon would join a growing& roster of Alphabet subsidiaries,& known as "Other Bets," such as high-speed internet service Access, smart appliance maker Nest and Waymo, the self-driving car company. In the second quarter of the year, Alphabet's Other Bets posted an operating loss of $772 million, on revenue of $248 million.

Spencer Hosie, a lawyer representing Loon competitor SpaceData in a lawsuit, told Business Insider that he noticed the change in Loon's status& in the recent FCC filing.& Hosie said he plans to add Loon Inc. as a defendant in SpaceData's case against Alphabet. It's unclear when exactly Alphabet incorporated Loon, but Hosie said he suspected that& it could have been as recently as last week.

Julie Bort contributed to this report.&

SEE ALSO:& Everything you need to know about the iPhone X

Join the conversation about this story »

NOW WATCH: Watch Google repeatedly mock Apple at its October Pixel event

Comments