By some futurist predictions from the past, we’d all be flying around in our cars by 2010. While that’s obviously not the case, Google announced this week that they have developed computerized cars that have logged over 140,000 miles on public roads. While this by itself is pretty cool and amazing, it sparked a bit of debate among tech blogs about how and if Google should be spending time on projects that seem far away from their core mission.
Should Google be pushing the envelope in big problems such as building computers that can drive cars? Or should they be focusing 100% of their resources on web projects closely related to their current core strengths like search and advertising? Henry Blodget of Business Insider argues that Google should not be working on this project:
Why is Google developing this technology?
Why is Google spending the $10+ million of shareholder money per year the project consumes (15 engineers, plus drivers, plus the cars).
Isn’t there something closer to its core business that Google could spend this money on?
Google Apps, for example. Google Apps are cool. But in many ways, they’re still not ready for prime time. Wouldn’t it maybe be better for shareholders if Google spent this money and focus on Apps instead of robot cars?
Or Chrome? Or Android? Or even search?
It should be noted that Blodget is not against the technology being developed at all, just against Google developing it as part of a project within their own walls. He goes on to argue that if Larry Page wants to tackle this problem, he should spin it out as a separate company and give those working on it equity stakes and make it a traditional startup. Jeff Bezos has done this with some of his interests at Amazon.com, and Google could be a major shareholder in such a startup.
Mike Arrington at Techcrunch takes the opposite approach and says that Google should do this because they can, and because Silicon Valley needs to take on tough problems:
I love the fact that Google is working on cars that drive themselves. I’m not a shareholder, but if I was I’d still love it. If Larry Page decides this is what he’s passionate about right now, Google definitely doesn’t want him starting some new company to pursue it.
Keep it at Google. If it doesn’t work, he’s scratched his itch. If it does, they can spin it off later. In the meantime, Google benefits because people know they’re working on new technology that can change the world, not just how to make more money from keyword ads. There are engineers that may take jobs at Google just knowing that they’re doing stuff like this that otherwise take jobs at one of those companies that Lyons is mocking just to get pre-IPO stock.
Both writers make some persuasive arguments, but to form my own opinion I put myself into the shoes of a large Google shareholder. How would I feel about this? I think as that large shareholder, I’d be concerned that Google really hasn’t found a huge revenue stream outside of Adwords and search. One option would be to optimize this or work on tangential projects like Blodget suggests. Another route is to go and try and build things like computers that can drive cars.
I fall along the line of thinking that if Google sticks too closely to their core competency, they never break out of being a one-trick pony. Therefore, as long as this project doesn’t consume massive amounts of revenue with no return ever in sight, I’d support it. Of course, it really is likely that this technology won’t generate any revenue for 5-10 years, if ever. There’s risk in that, but Google has a mountain of cash and is risking $15M a year on this worth it? It just might be if it changes the automotive landscape in the future, and allows people to spend an extra hour or more per day on the internet instead of watching where they are driving.
One other point that I think Blodget misses in his argument is that this project may have a much better chance of succeeding inside Google. I agree with him that Silicon Valley has proven that the startup is the best form of innovation. However, this project done as a startup would require significant financing for years before it makes any revenue, and because it’s being done by Google I’m sure it’s earning more respect and support from police, parts manufacturers, and others than if it were a startup nobody knew existed.
That all being said, it’s interesting to think it might be possible that I won’t need to teach my kids how to drive because a computerized car could do it for them. Wild.