Get Venture Capital from Google
I would love to hear thoughts from others in the comments on how you feel about Google Ventures. Please weigh in on whether you think this is a good move for Google or not!
Earlier this week, Google finally got around to announcing Google Ventures. If you don’t know, Google Ventures is a new venture capital arm to the search behemoth. Google has been known for their high profile acquisitions of popular Internet properties like YouTube and Feedburner and also for acquisitions of useful services like DoubleClick and Trendalyzer.
I have seen a lot of disagreement on this move in the blogosphere. Some have argued that staring a new ventures lab at Google may not be such a great idea. Some feel that Google could deploy capital better in other ways. Some feel that new ventures participating in the Google Ventures program will have an unnecessary target on their backs. These critics feel the companies in the program will face unnaturally high levels of competition as others try to emulate their website or service early in the development process before it has had a chance to reach maturity.
I personally think Google Ventures is a fantastic idea, problems aside. I realize Google has been doing VC at some level for quite some time. This isn’t a totally new service from Google but this will give Google a much increased exposure to new startups. Google has enough capital and clout to help almost any ORIGINAL idea grow into a successful company. (No Twitter copies allowed, I hope) I still feel Google paid way, way too much for YouTube even if it does pull in an extreme amount of traffic. What if they could’ve invested in YouTube when it was a profitless start-up with a newly launched but quickly growing product? Google could have bought the company for next to nothing in comparison to the massive sum they spent to acquire it once it was the market leader.
The amount Google is devoting to the Google Ventures arm is only 100M this year. To you and I, this is an enormous sum of money but to a company with a market capitalization of 116.7 billion this is a drop in the bucket. As a Google shareholder I think this is a great idea. Google was the product of massive innovation. To continue to be successful and grow they’re going to have to continue to innovate. As can be seen in the newspaper industry this gets more and more difficult the larger you get. Google Ventures may be one area where innovation can occur outside the main company circle. I am excited to see how Google Ventures develops over the next couple of years.
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I agree with you that Google doing VC is a smart idea. Starting a division makes it easier for Google to find companies because now people can send their VC presentation to Google. I don’t know though it seems like Google would be better off keeping it more of a secret like it is now and just spending some of their money to find the companies to buy instead of getting so much publicity.