Google Invests $100M in Startups Despite Recession

Google will invest a whopping $100 million in start-up companies over the next 12 months, and says a recession is an ideal time to invest in firms that could someday make it big.

The money comes from a scheme titled Google Ventures, which aims to combine the firm's technical knowledge and financial resources with the creative ideas of new companies. The firm says it will focus on industries including "consumer Internet, software, clean-tech, bio-tech, health care" and others.  (Source: theregister.co.uk and nytimes.com)

Google says there's no reason not to invest during an economic slowdown as "great ideas come when they will. If anything, we think the current downturn is an ideal time to invest in nascent companies that have the chance to be the 'next big thing' and we'll be working hard to find them." (Source: cnn.com)

No Strings Attached

While many will assume the scheme is simply an opportunity to cheaply acquire a stake in businesses which could one day be major players, Google says that isn't the case. It says it's possible it could wind up buying out some of the firms it invests in but this isn't the main aim of the investment scheme.

It also insists that there is no requirement for the firms it invests in to use Google services or have any other commercial arrangement beyond the investment. (Source: google.com)

Google itself hasn't announced a total for the funding and simply says the money invested in each firm could be anything from 'seed money' to tens of millions. The $100 million figure comes from a New York Times report.

No Guarantee Of Success

The BBC reports that venture capital can be a risky strategy. In the United States, such investments have dropped in value by 71% in the past two years. (Source: bbc.co.uk)

The scheme already has two investments, each for an unknown amount. They are in power grid technology firm Silver Spring Networks and Pixazza, a service which allows retail websites to turn images into advertisements.