Google is a big player in several technolgy fields, but until now, the search giant hasn't been a major player in high finance. The company recently amassed a fighting fund of $100 million to form a new venture capital entity. It looks as if Google is trying to spend its way out of the economic crisis.
The fund is named Google Ventures, and though it will be wholly owned by Google it will operate fairly independently—its investment purview apparently extends beyond the fields dominated by its parent organization. This includes fields as diverse as "consumer Internet, software, clean-tech, bio-tech, health care." The whole point is to find and invest in likely start-ups with the aim of realizing large financial returns, and it will trade on the strength of the Google name, with the possibility of connecting its target companies with Google technology and research.
Heading up the new fund are Rich Miner, who co-founded the smartphone OS-maker Android, and Bill Maris, founder of a Web hosting company and former portfolio manager for a Swedish industrial holdings company. Miner set out the core mission behind Google Ventures by saying "Just as we were founded by entrepreneurs, we think we can help some of those next entrepreneurs with the next great idea." His new entity has the power to grant funds between tens of thousands of dollars to "several tens of millions" to start-ups that seek both seed and early-stage funding.
Google.org has made philanthropic investments in the past, and may continue to do so occasionally, but Ventures is now expected to be the main vehicle. At the helm, Miner and Maris will work with David Drummond, who's senior VP of corporate development and chief legal officer at Google. That raises the question whether Google is using the $100 million as a acquisition fund—but Google has stressed that's not the main intention.
But is it a good idea? Absolutely. New ideas are surfacing during these touch economic times just as at any other time, and Google is in a financially secure enough position to take a risk as a venture capital investor. That places it in position to reap the cash benefits if its chosen investment companies take off. And when the economy turns the corner, Google may even find itself ahead of the game with a hand in innovative new businesses or even whole new fields of technology—that's the sort of return you can get for "tens of millions."