Sergey and Larry Become Venture Capitalists
As Originally Posted to Channel Insider

Google has created a new venture fund designed to provide funding for Internet, software and other technology startups. Should Google acquire any of the companies it backs financially, it would drag any partners those companies have into its channel.

While Google’s foray into the channel with Google Docs and its search appliance has gotten a lackluster response, solution providers in the near future may find themselves involuntarily partnering with Google through acquisitions and the extended Google investment network.

Google created a venture capital fund to back startup companies developing innovative products in Internet services, software, hardware, green IT, clean energy technologies, biotechnologies and health care.

"We think we can find young companies with truly awesome potential and encourage their development into successful businesses," wrote Bill Maris and Rich Miner, the two executives charged with leading the venture fund, in a post on Google's blog.

Large, established vendors invest in smaller companies, betting their innovations will create new business opportunities, features for their existing products or simply a positive ROI should they go public or get acquired.

"Acquisitions by Google of portfolio companies are possible, but this is not the goal or focus of our investment activities. Our focus is building great companies and generating long term financial return," the Google fund's Web site said.

While Google’s acquisition of DoubleClick and its interest in technologies tangential to its core search business overshadow its other investments, Google has made several strategic investments and acquisitions over the years.

Two of the more interesting Google acquisitions were Green Borders and Postini in 2007. Green Borders was an innovative browser security startup that provided a quasi-sandbox that protected Web surfers from malicious Websites. Postini was an e-mail security service, which guarded digital communications from malware and spam.

Postini was a channel-centric venture with several hundred partners. Once Google acquired the company, Postini partners fell under the auspices of Google’s sales organization.

Separate from the investment fund, Google founders Larry Page and Sergey Brin are two of the major investors backing Tesla Motors, the startup manufacturer of high-performance electric sports cars. Tesla recently unveiled its new Model S, which features integrated 3G connectivity and a 17-inch touch-screen monitor for checking the Internet.