5.5. INVESTING IN WILD IDEAS
Google has tried to branch into, among other areas, a WiFi developer for cities, a major investor in renewable energy, green vehicles, and, strangest of all, a semi-biotech company, 23andMe. It is understandable when Google invests in any technology that broadens its ability to sell ads, and it may be smart to invest in cheaper electrical energy, since Google's business is so dependent on having a reliable power source. Genetic testing, however, doesn't seem to have any relationship to Google's core business.
Janet Driscoll Miller, president and CEO of Search Mojo, a search-engine marketing company, wrote: "23andMe was co-founded by Anne Wojcicki, new bride of Google's Sergey Brin, so the investment is likely driven more by nepotism than by the drive to build Google's business portfolio."
Tom Foremski, who writes about business and culture in Silicon Valley, suggests that while Google's investment in such companies as 23andMe is legal, it may be unethical:
Investors cannot pressure Google to make money from those business groups because their shares carry minimal voting rights. Google's founders deliberately set up two classes of shares when they launched the public company, so that they could make decisions independent of shareholders (fellow owners) wishes.
As it warned it would in the IPO prospectus, Google also expends a lot of energy and resources on high-risk products that don't always survive. National Public Radio Marketplace host, Kai ...