shutterstock_471662072Alphabet (the company formerly known as Google) reported healthy earnings a few weeks ago. Its revenue reached $21.5 billion, which included $185mm in sales from moonshot projects – investments in everything from driverless cars and solar-powered drones to genomics.

But as executives discussed these ventures with investors, a faint echo from an earlier age – and an earlier entrepreneur – could be heard. It is a warning about the danger of chasing extreme bets.

Google’s pursuit of high-impact business ideas is similar to the path followed by another technology pioneer five decades ago. Like Alphabet today, it was a leading force in the tech industry and a passionate believer in using technology to tackle big challenges.

That company was the Control Data Corporation. It emerged in the 1960s from Minneapolis – hardly a hotbed of technology at the time – and became a potent competitor to IBM in mainframe computing. The company was led by hard-charging CEO Bill Norris and senior designer Seymour Cray, who would later develop the Cray supercomputer.

By the time the Mary Tyler Moore Show was putting Minneapolis on the map (and Prince was just picking up a guitar), Control Data had become a homegrown powerhouse, riding the growth of what was affectionately called “high tech” and employing more than 60,000 people.

But Bill Norris had ideas that extended well beyond Control Data’s computer business. He pursued new ventures to tackle social problems in healthcare, energy, education and criminal justice. He was a staunch defender of these programs, even as the company’s computer business began to falter, eventually posting a $568 million loss in 1985. He resigned the following year, and the company was split up a few years after that.

Norris in many ways was ahead of his time. He called for business to become engaged in solving society’s toughest problems long before sustainability and corporate social responsibility became part of the investment dialogue.

But for shareholders, Norris’s quest proved to be disastrous. And that’s where his experience becomes instructive for Sergey Brin and Alphabet today.

Because Alphabet’s long-shot ventures are costing shareholders dearly. While revenue from its “Other Bets” segment rose to $185 million in the quarter, these businesses lost $859 million. The company’s core ad-sales business is making up for it though, with revenue in the quarter reaching $21.5 billion. But competition is growing. Verizon’s recent purchase of Yahoo is meant to take on Google’s dominance in digital advertising, and Facebook isn’t standing still either.

More than that, Alphabet’s far-flung business interests draw management’s focus away from its core business – a cost that isn’t fully captured by the quarterly results. Distractions in a highly competitive, fast-moving industry are never a good thing.

From a communication standpoint, Alphabet executives should expect to face more questions from investors about its plans for these businesses. When will they be profitable? Do they belong in a conglomerate-type structure? Should they be spun out to shareholders in a standalone company? Or taken private and sheltered from the pressures of quarterly reporting?

For now, Alphabet is sticking to its homegrown approach. Speaking on the investor call, CFO Ruth Porat encouraged investors to take a long view of these businesses:

“Turning to Other Bets financials, let me again emphasize that the majority of these efforts are pre-revenue. We continue to invest across these opportunities and are doing so in a disciplined way. We think it remains most instructive is to look at them over a longer time horizon because, as you have seen, quarterly revenues and expenses can be lumpy for three primary reasons. First, they are early-stage. Second, they represent an aggregation of businesses operating in different industries. And third, they may be impacted by one-time items like partnership deals.”

Bill Norris probably made similar remarks to Control Data’s investors. But as its core business weakened, investor patience wore thin. Whether Alphabet follows Control Data’s path will be one of the great corporate dramas of the next few years.