BizOrigin

Is there a technology space where the name Google doesn’t come up? Earlier we had an article about the hype surrounding the Google phone, yesterday was another one discussing a browser plugin that may pose risks to their advertising model, and now today we’ve got something totally different.
BusinessWeek published an article this morning, written by Aaron Ricadela, turning the spotlight to the multiple VC deals being made by Google:

Google (GOOG) has begun making VC-style investments to the tune of about $500,000 or less in promising startups, often buying those companies afterward, according to partners at Silicon Valley VC firms who spoke on condition of anonymity. In an effort to keep spotting promising deals, Google has been hiring a stable of finance pros. And it has invested more than $1 million in a Mumbai-based investment firm called SeedFund to gain access to technology such as automatic translation software that could help spur growth in India.

Ricadela reports that SeedFund has already invested in four deals, ranging from $500k to $750k, that may be aimed at adding more niche info to Google’s homepage “such as information about autos” or to “cultivate technology that can translate Web content from English into Indian languages.” With a size of $15M, the fund is small but well backed: partners include Motorola Ventures and Mayfield, a Silicon Valley firm.

On Google’s competition with VC’s:

By staking startups, Google hopes to avoid paying the higher prices companies can fetch once they take funding from traditional VCs. It’s possible that some of its investments are conditioned on Google having first-acquisition rights should a target opt to sell, some VCs speculate. Google didn’t respond to calls requesting comment. Making investments in startups also can help Google use more of its $4.5 billion in cash to cultivate tools that complement existing products. Google recently started a program called Gadget Ventures to fund entrepreneurs who build online tools using Google’s technology.

The article says that Google’s decision to jump into the VC market parallels increased VC investments from other corporations as well: “Companies that aren’t full-time investors pumped $1.3 billion into 390 venture capital deals in the first half of 2007, up 30% from the $1 billion invested in about 350 deals a year earlier.” The big names mentioned are Motorola, with almost $30M invested in the first half of ‘07, and Intel with $112M.

Back in February an article on VentureBeat written by Matt Marshall also reported on Google’s move into the VC realm, highlighting the company’s previously mentioned investment in SeedFund as well as their investment in another venture firm, Erasmic, also located in India. One of Erasmic’s notable investments which recently found itself the subject of an MSNBC news story (video here) is Galvanon, a healthcare kiosk company that allows electronic self-service check-in for patients at hospitals and emergency rooms, greatly increasing efficiency by helping prioritize the severity of patients’ healthcare issues. If Google keeps using their $4.5B in cash reserves to make smart investments like this, don’t look for the giant to be toppled anytime soon.