Google is bleeding cash trying to take on Amazon in the smart home

Google parent company Alphabet reported first quarter earnings for 2018 today, beating Wall Street estimates on sales and profit thanks in large part to its mammoth search advertising machine that continues to grow year after year. But one interesting highlight from the earnings announcement was just how much money the company's smart home company Nest earns in revenue and reports in losses. Because Nest was rolled back into Google proper earlier this year, Alphabet recast its quarterly earnings figures for 2017 to account for the fact that Nest revenues and losses would be moved from the "Other Bets" section of Alphabet's business to the standard Google revenue line item. Comparing the differences in quarterly revenues and operating income, we can see that Nest made about $726 million in revenue, yet it ultimately contributed a $621 million loss to the "Other Bets" section throughout the year. In other words, Google spent more than half a billion dollars last year to establish Nest in sectors like security cameras, alarm systems, and video doorbells.