More clarity for Google's Verily? Don't bet on it soon

Alphabet CEO Larry Page

About 6 months ago Google revealed a new corporate structure that was supposed to offer greater clarity to investors by clearly detailing its new ventures as opposed to its search-engine business. The idea was to make the corporate structure "cleaner and more accountable," the company's CEO Larry Page announced in a blog post at the time that disclosed a new parent company, Alphabet ($GOOG).

Maybe that's the vision eventually, but we're not quite there yet. In advance of its Feb. 1 earnings announcement for 2015, the company has cautioned that, in fact, the phased-in reporting changes won't be much different with the upcoming earnings.

Google Life Sciences, its med tech effort now known as Verily, will be lumped in with everything that is not the established Google search-engine business as "Other Bets." In addition to Verily, these include a myriad of other projects such as Access/Google Fiber, Calico, Nest, GV (formerly Google Ventures), Google Capital, X (formerly Google X) and others. No mention was made of the robotic surgery JV that Verily has created with Johnson & Johnson ($JNJ), known as Verb Surgical.

In fact, Google previously had broken out any revenue from these "Other Bets" as "Other Revenues," so little if any change will happen there. Any returns from the venture investment portfolios will be tracked separately as "other net income and expense." It will be interesting to see whether and how Google details its R&D spending split between the core business and the newer businesses.

The primary benefit of this initial reporting change will presumably be to help investors better understand the Google search-engine business financials versus the whole of its more speculative ventures. But it's unlikely to provide much benefit to industry watchers waiting for nitty-gritty details on the life sciences efforts at the company--or much insight on how to value them.

In the first 9 months of 2015, Google spent a whopping $8.7 billion on R&D, that's up steeply from the $7 billion spent during the same period in 2014. At the end of the third quarter, Google had roughly $18 billion in cash--giving it a lot of room to invest in all sorts of R&D.

- here's the latest Google blog post