Google's Chief Executive Larry Page has announced the tech giant's latest moonshot, a new company whose mission is to revolutionize urban life.
Sidewalk Labs, based in New York, said it will develop new technologies to make transportation more efficient, lower the cost of living, reduce energy use and help city governments along the way.
Google's latest big idea comes at a time when the company's stock has not impressed investors and underscores its penchant for ignoring groans on Wall Street as it continues making big bets on projects that could take years to pay off.
Google shares have gained 25% the last two years, well below the Nasdaq Composite's 46%. Thursday morning after the announcement, Google shares fell $1.47, or 0.3%, to $535.22.
Google was in a similar position two years ago when investors were scratching their heads over Calico, a health company the tech giant launched to address problems associated with aging.
That led to headlines such as "Google Moonshots – Innovation or Desperation?" in Forbes, which wondered if the search engine's foray into smart eyewear (Google Glass), Web-connected helium balloons (Google Loon) and driverless cars were nothing more than Hail Mary passes.
Perhaps sensing a potential backlash to Sidewalk Labs, Page acknowledged that the project deviated from the search engine's moneymaking ventures.
"While this is a relatively modest investment and very different from Google's core business, it's an area where I hope we can really improve people's lives, similar to Google[x] and Calico," Page wrote, referring to the company's secret innovation labs and the health project. "Making long-term, 10X bets like this is hard for most companies to do, but [co-founder] Sergey [Brin] and I have always believed that it's important."
Sidewalk Labs will be headed by Dan Doctoroff, former chief executive of Bloomberg and also a former New York deputy mayor for Economic Development and Rebuilding.
"New technologies are already transforming commerce, media and access to information," Doctoroff said in a statement. "However, while there are apps to tell people about traffic conditions, or the prices of available apartments, the biggest challenges that cities face -- such as making transportation more efficient and lowering the cost of living, reducing energy usage and helping government operate more efficiently have, so far, been more difficult to address. Sidewalk Labs will develop new products, platforms and partnerships to make progress in these areas."
Follow @dhpierson for tech news.