Sep 15, 2006

Google.org: Not as Innovative as it Sounds

by Laura Starita

Google, the search engine company that arguably possesses the strongest Internet brand, was profiled in The New York Times this week for the public launch of its philanthropy, Google.org. Google.org is noteworthy on account of its structure: it is a for-profit entity. This structure allows it to invest in both for- and non-profit ventures whose aims are to address poverty, disease and global warming. The only ‘traditional’ aspect of Google.org is that one of its sponsored nonprofits is the Google Foundation, a traditional philanthropy.

Yet contrary to the tone of the article, what Google.org is doing is not novel. Pierre Omidyar, founder of eBay, already did the same thing when he folded the Omidyar Foundation, a traditional nonprofit formed in 1998, into the Omidyar Network in 2004. Like Google.org, the Omidyar Network is a for-profit entity that funds both for-profit and non-profit ventures. So while we can thoroughly applaud Google for creating Google.org and seeking to invest in any venture that effectively addresses poverty, it’s hardly groundbreaking even in the field of technology companies.

A comment made by Dr. Larry Brilliant, the executive director of Google.org, is also somewhat baffling:

Dr. Brilliant said he would hope to see such ventures [sponsored by Google.org] make a profit. “But if they didn’t, we wouldn’t care,” he said. “We’re not doing it for the profit. And if we didn’t get our capital back, so what? The emphasis is on social returns, not economic returns.”

Dr. Brilliant’s glib attitude toward profit breeds skepticism. The arguments for attempting social reform through for-profit initiatives is that the corporate world’s focus on the bottom line creates automatic accountability and direction – two things that are often lacking within nonprofits. In addition, profitable companies breed competitors, which essentially leverages the initial investment into broader change. If Google.org is going to treat these benefits of for-profits so casually, why bother using for-profit vehicles in pursuit of their goals?

New York Times: Philanthropy Google’s Way: Not the Usual

Information on the Omidyar Network