Since its founding as a company, Google has made funding big picture ideas, even those that may never contribute to the bottom line, a priority. These "moonshots" involve heavy investment in projects that may never pan out into real business initiatives.
It is not the way a company, especially a publicly traded one, traditionally operates. Moonshots are not simply research and development. In many cases, they are pie-in-the-sky experiments that may better humanity without bettering the balance sheet.
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Google Glass, the driverless car project, and a number of other initiatives -- not all publicly known -- are under the division headed by company co-founder Sergey Brin. The executive took the unusual step of defending these moonshots in a letter to shareholders.
The Google driverless car. Source: Google
What Brin saidIn the letter, Brin explained that Google was founded on the idea of not just making money but also making the world better. He made it clear that what has become moonshots were something he and Larry Page had baked into the company DNA:
The search giant currently has a glucose-sensing contact lens that is being developed in partnership with Novartis. The lens uses a a tiny chip, consuming power measured in nanowatts, which is embedded into the lens to monitor glucose levels continuously.
Google did not specifically set out to develop that technology, but its constant research efforts, coupled with changes in the industry, led to the breakthrough:
Brin wrote that Google's success was created by changes in technology and its growth going forward would be powered by the same:
He said those advances continue today, allowing the company to develop new, free products that would have been impossible -- or at least expensive -- in the past:
Not all of the products Brin mentioned were moonshots, but it is very clear he believes that the company must continue pursuing research even if it does not bear financial fruit.
The future is unknownGoogle is the rare company that not only can afford to research and invest in something as seemingly absurd as a driverless car but is also big enough to make it successful. Brin may push research for its own sake, but the reality is that Google has an almost unique ability to monetize projects that would seem like mad scientist folly if other companies tried them.
On the surface, they may seem like a waste of resources, but it is really just a long-term R&D plan in which many projects will fail, but the ones that succeed could truly change the world.
It is hard to see how that won't be good for Google and its shareholders.
The article Google Inc Founder Sergey Brin Defends "Moonshots" to Shareholders originally appeared on Fool.com.
Daniel Kline owns shares of Apple.He believes in taking moonshots. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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