Your crazy Uncle Charlie does things you can't explain. He'll barbeque cheese. Wash his car with peanut butter. Watch Sunday night reruns of M.A.N.T.I.S. Proclaim himself the king of the marshmallow people. He is, shall we say, nuts.
Google (Nasdaq: GOOG ) is a little like your crazy Uncle Charlie.
Before you start with the Jack Nicholson impressions
Or so it would seem. The Big G hasn't yet officially announced a think tank called Google Ideas, but all indications are that it will, this fall, and that the group will be led Jared Cohen, the U.S. State Department's supposed 'Twitter in Chief,' Fortune calls him.
The idea behind Google Ideas is to fund projects where technology can be applied to developing world problems. Think of it as Google.org, but with a beefier, more personal mission. Whereas Google.org is investing in broad concepts such as flu trends and renewable energy -- and powering many of its own data centers in the process -- Google Ideas seems more oriented toward shaping policy.
Why would Google want to open a policy shop in New York led by Secretary Hillary Clinton's Twitterer-In-Chief? You'd have to ask CEO Eric Schmidt to know for sure, but my guess is that it's for the same reason Google does anything: Because it can.
Getting know Google, the venture capitalist
But this isn't just The Big G throwing its weight around. Google Ideas is reflective of the experimental culture at Google. Every project is an experiment that has the potential to produce a return. Those that produce, stick. Those that don't, die.
In other words: it's best to think of Google as a venture capitalist. Which is interesting, because the company has its own $100 million VC fund.
In acting like a VC, Google has compiled a portfolio of experimental technologies. Hedging in this way can lead to chaos, but it also helps to rapidly clarify which products to back.
Consider Android. By moving faster than handset and network partners T-Mobile, HTC, and Motorola (NYSE: MOT ) , Google created chaos that resulted in the same manufacturer selling different flavors of the OS at the same time.
However, moving fast has also allowed developers to quickly improve the overall environment with apps, and in the process make it the top-selling smartphone OS here in the U.S. Apple (Nasdaq: AAPL ) , Research In Motion (Nasdaq: RIMM ) , and Nokia (NYSE: NOK ) are all working to keep Android from gathering too much momentum.
How to get close to problems
Speed and diversity are the two most common ways in which Google is like a VC, but there is also a third way. Google gets close to problems by investing broadly, which is why Google Ideas, crazy as it sounds, is a smart bet.
Why? Entrepreneurs and entrepreneurial firms make money by solving problems. Think about some of our big winners from Motley Fool Rule Breakers. Open Table (Nasdaq: OPEN ) made it easy for diners to find and reserve a table at a restaurant that fits their tastes and budget while also filling seats for profit-hungry restaurateurs. Revenue is up more than 30% over the past year.
Open Table fills a need. Google, as an experimenter, has to fill needs, but it can't fill needs it doesn't know about. Google.org and Google Ideas, and the company's famous 20% time allocation to "pet projects," allows the company to find needs cheaply, and at the same time do some good.
Is Google crazy to start a think tank? Maybe, but with $30 billion in the bank and a history of big, VC-style wins in Gmail and Google Maps, it's probably worth giving The Big G the benefit of the doubt. After all, starting a think tank isn't the same as barbequing cheese.
Now it's your turn to weigh in. Is Google crazy to be starting a think tank? Please vote in the poll below and then leave a comment to explain your thinking.
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