Today Google announced their intention to launch a venture capital arm led by David Dummer, senior vice president. The question why is answered by what does Google have to gain, and why now.
Google has several things to gain. The most prominent is the current credit crunch and the effect it is having on many start-ups. The market is currently in the favor of those willing to supply, this gives Google the ability to pick and choose the best new start-ups to fund, or spread their capital around and have a better chance at a stake in the winner. The second thing Google has to gain is the ability to diversify their profit center. With the uncertainty about how Google’s deal concerning the Overture Patent usage went down Google may be looking for an alternate ad serving platform that a start-up is developing. The third thing Google is hoping to gain is the goodwill of the industry.
Google’s motto is “do no evil.” It looks like Google is looking to be more than just “not evil” in a time where venture capital and economic stimulus aimed at innovation is greatly needed to grow our economy.
