Google is forming a new company for its self-driving car division, which will operate independently inside Alphabet.

While Google's official blog and Self-Driving Car Project page have yet to be updated, Tech Crunch has the news that Google is spinning out its self-driving car project to a standalone company. The new company is called Waymo, and it will operate on its own under the Alphabet umbrella, rather than as a division of Google. Jon Krafcik is the new company's CEO.

Google self-driving car

As a standalone company Waymo will have the additional freedom to work in a way that benefits its own causes and potentially grow faster than when it was part of Google. The choice for it to spin out means Waymo can be focused on products, rather than purely on research. But concurrently, as we've seen many times before, it will also now have additional pressure to make it on its own without the constant flow of money from its former parent company.

Waymo CEO Krafcik made the point that the company is primarily focused on the technology of self-driving cars rather than the actual cars themselves:

"We are a self-driving technology company. We've been really clear that we're not a car co. although there's sometimes some confusion on that point. We're not in the business of making better cars. We're in the business of making better drivers."

Google has routinely spun out divisions into their own companies to effectively see if they can sink or swim, while also not dragging down Google's bottom line. With Waymo, this points to the fact that the self-driving car project is on the cusp of either breaking into the mainstream, or potentially dying if it can't work out the business model on its own.