Alphabet (GOOG) - Get Alphabet Inc. Report (GOOGL) - Get Alphabet Inc. Report is reportedly selling its Boston Dynamics Unit, a unit that has wowed -- but also concerned -- many who follow the company.
This could be all thanks to new CFO Ruth Porat and the financial discipline she's brought to the company.
"It feels like we're finally seeing some of the financial discipline around 'Other Bets' that Ruth Porat was brought in for," said Jan Dawson, Chief Analyst at Jackdaw Research, via email, referring to the moonshot projects that Alphabet is pursuing, such as its driverless cars division. "This particular slice of robotics falls under the 'cool, but not a near-term business' Alphabet needs to get out of."
Bloomberg was first to report the company could be up for sale, as Alphabet reportedly does not see potential for the unit to generate real revenue in the next few years.
Boston Dynamics, which was bought by Google in 2013, is an engineering company that creates robots for the military. Think Skynet, only with less Arnold Schwarzenegger (just kidding -- for now).
Alphabet could not be immediately reached for comment.
Boston Dynamics has received significant attention in recent weeks, after two eye-popping videos went viral.
In the first video, you see a robot, aptly named Atlas, taking a trek through the woods. Then, when it gets back to the lab, a man, presumably one of Boston Dynamic's engineers, starts testing it, using a hockey stick to push packages away. Finally, he pushes Atlas down using a stick and Atlas slowly picks itself up.
Bloomberg reported Google's public-relations teams was uncomfortable with the video, as shown by emails that were published to an internal forum at Google.
"There's excitement from the tech press, but we're also starting to see some negative threads about it being terrifying, ready to take humans' jobs," wrote Courtney Hohne, a director of communications at Google and the spokeswoman for Google X, according to the Bloomberg report. "We're not going to comment on this video because there's really not a lot we can add, and we don't want to answer most of the Qs it triggers."
In the second set of videos, a robotic dog designed by Boston Dynamics runs around a parking lot and interacts with a real-life dog.
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Porat, whose hire was announced in March 2015, started in May and has been well-received by investors for her straight shooting and sense that she's going to cut spending on frivolous projects.
After the announcement last year, TheStreet's Jim Cramer said the announcement made him "want to own Google," noting he wasn't alone in that line of thinking.
Since May 26, 2015, her first day at work, Alphabet shares are up more than 35%, compared to a roughly 6% decline in the Nasdaq.
Since Porat's arrival, Google transformed itself into Alphabet, a holding company, with Google as its largest division. In the fourth quarter, the Mountain View, Calif.-based Alphabet broke out its "Other Bets" for the first time to investors, which showcased how much money its moonshot projects were losing.
"Other Bets," includes units such as Nest, Fiber, Verily, driverless cars and other platforms. For the full year, these businesses had an operating loss of $3.57 billion, generating just $448 million in revenue. On the investor call, Porat said the majority of the revenue came from Nest, its smart home initiative, as well as its Internet access business, Google Fiber, and its life sciences division, Verily.
There's also speculation that Google may be looking to exit robotics altogether, now that Andy Rubin, the co-founder of Android hast left the company.
Rubin started Replicant, after leaving Android, working on these sorts of projects. Dawson noted robotics may have been a way to keep Rubin at the company after his departure from Android.