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Google Does Good

Written on
Jan 17, 2008 
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Wall Street Journal  |
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Google Does Good

Dr. Brilliant opened the possibility that some of the teams wouldn’t have a winning project, increasing the anxiety of some specialists among them, according to Google.org staffers. “It was a struggle,” says Sonal Shah, head of Google.org’s development efforts and a former Goldman Sachs vice president and U.S. Treasury Department official. “We weren’t sure our initiatives were going to pass.”

After a September presentation by Ms. Shah’s team of an initiative to invest in seven to 10 funds that finance small and midsized businesses, Google.org colleagues concluded it wasn’t ambitious enough. Ms. Shah and her colleagues spent the next three weeks, including weekends, retooling their approach.

A development economist had left earlier because he felt Google.org was too focused on climate change at the expense of the global poverty programs—a tension that persisted during the internal discussions.

In an all-or-nothing gamble, the Google.org global-health specialists submitted just one initiative, the pandemic warning and prevention project, to the final competition. That followed an intense internal debate over whether Google should instead tackle disease eradication, efforts to wipe out diseases such as malaria or guinea worm entirely. Ultimately, the Google.org executives decided Google’s resources, such as its engineering prowess, were less suited to making a unique contribution to the eradication efforts than to warn of and prevent outbreaks.

While some Google.org executives championed efforts to toughen energy-efficiency standards, the company’s co-founders urged them to look instead at making renewable energy cheaper. At a September meeting with the co-founders, the Google.org team outlined plans for that, including grants to research universities and grants to start-ups. Mr. Page told them they “weren’t thinking big enough,” according to Dr. Brilliant, and suggested that Google create a group within the company itself to research and develop renewable-energy technology.

In late November, Google announced that it expected to invest hundreds of millions of dollars in efforts to make renewable electricity cheaper than power from coal-fired plants. In an unusual move, Google said it would spend millions of dollars on research and development and would create a renewable-energy R&D group within the company, in addition to grants and investments by Google.org.

After having set out to choose three new initiatives on top of a plug-in car project announced earlier, Google.org settled on four, including the renewable-energy initiative.

The other winners include the program to predict and prevent disease outbreaks and other global threats. That’s anchored by a $5 million grant to InSTEDD, a nonprofit Google founded that is applying technology to improve the flow of information between organizations fighting such problems. Google believes that better data and systems for analyzing it are critical to identifying disease hotspots. Possible eventual projects for Google include creating and selling simple tests developing-world doctors could use to diagnose infectious diseases.

As part of the “Inform and Empower to Improve Public Services” initiative, Google is supporting efforts to provide various parties in the developing world with information about government programs. One beneficiary of a $2 million grant from Google.org is Pratham (www.pratham.org), a nonprofit in India which gives reading tests to schoolchildren and publicly releases the data with the goal of improving education standards. Other possible initiatives include funding groups that help citizens understand government budget issues.

The last Google.org initiative aims to “Fuel the Growth of Small and Medium-Sized Enterprises” in the developing world. Rather than just invest in funds, as Ms. Shah’s team had initially proposed, it will try to reduce the transaction costs for outsiders to invest in such businesses, help create funds that buy stakes in the businesses and provide investors with an “exit” and invest indirectly and indirectly in such businesses. Dr. Brilliant says his dream is to create funds that invest in small and midsized businesses in given countries and float on stock markets, their value rising and falling with the countries’ gross domestic products.

Some warn that Google’s unconventional approach risks altering the landscape of industries, putting it in competition with other businesses. Its investment in renewable-energy research and companies, for example, makes Google a potential rival to some existing oil and coal concerns. Google “is becoming a catalyst for energy innovation, which makes them an invader to the traditional energy industry,” says R. Paul Herman, CEO of HIP Investor, which consults on socially responsible investing, and former strategy director at Omidyar Network.

Such philanthropic activities potentially have repercussions for Google’s core online-advertising business, if energy companies cut back on buying Google ads because they viewed it as a rival. Similarly, any government officials unhappy with Google.org’s efforts could potentially use regulatory or lawmaking powers to take it out on the company.

Lant Pritchett, a Harvard University professor who works part-time as a consultant to Google.org, acknowledges that the “Inform and Empower” initiative “does potentially put [Google] in the position of supporting people who have an advocacy or potentially adversarial role with the government.” Mr. Pritchett adds, “There could be negative feedback from what we’re doing as a nonprofit for Google.com.”

Dr. Brilliant says the company has considered such risks. “It’s an experiment to have a philanthropically oriented organization that’s part of the P&L [profit and loss] of Google,” he says.

The company is testing a system to create ways to measure the success of the initiatives and plans eventually to disclose to the public data about the performance of Google.org’s efforts.

Some philanthropy experts say it is too early to predict how successful Google.org will be, and how effective a hybrid nonprofit/for-profit approach will prove.

Bruce Sievers, Visiting Scholar at the Haas Center for Public Service at Stanford University, says his qualm about high-tech money backing such efforts generally is “just the whole thing of hubris.” Such funders often believe, he adds: “‘We have a lot of smarts and a lot of money; we’re going to weigh in, in these social situations.’ And they’re so unbelievably complex.” Mr. Sievers, former executive director of the Walter and Elise Haas Fund, says it remains to be seen whether such concerns apply to Google.org.

For their part, Dr. Brilliant’s colleagues acknowledge the effort has been daunting. “Is solving world poverty or changing the course of climate change harder than running an advertising business, even if it’s Google?” asks Google Vice President Sheryl Sandberg, who sits on Google.org’s board. “Yes,” she says.

Kevin Delaney is a writer for The Wall Street Journal.com

Compliments of WSJ.com





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