Google to launch in-house startup incubator called ‘Area 21’

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Google looks quite determined to retain its top talent, so it is looking to start an in-house incubator for startups, according to The Information. The search giant is planning to let entrepreneurial Googlers and their teams develop their ideas with its own funding and support.

Google giving more freedom to employees

Google will soon release “Area 120,” spearheaded by Google executives Bradley Horowitz and Don Harrison, the report says. The executives, if their proposal is accepted, will begin to work full-time with their team on the plan.

Employees can create a new company funded by the search giant, or they can pitch for outside funding. Area 120 will occupy space in one of Google’s San Francisco offices and will remain physically separate from the search giant’s Mountain View campus, the report indicates. Interestingly, the report pins the new startup Area 120 to Google and not Google’s parent company Alphabet.

No further details are available on the effort, but according to the report, after drafting a business plan, the teams will be able to work within the incubator full-time. Teams can strike out on their own as a whole new company after several months, but the timing of the incubator’s launch is still not certain.

A smart move, but many questions unanswered

Google is hoping that the incubator will stem the flow of talent to competing companies. For example, the search giant just lost Regina Dugan to Facebook earlier this month. Dugan was the powerful former head of the Advanced Technologies and Projects group, which developed tech like Project Tango.

The incubator’s code-name Area 120 pays homage to Google’s famed “20% time,” which allows employees to spend 20% of their working hours on projects they like. Both AdSense and Gmail came of 20% time, so the search giant is probably looking for the next internal home-run from Area 120.

It’s a smart move from the Internet giant, but whether or not it will foster an environment in which talented employees are given the independence to make what they like is still an open question. Other questions that remain unanswered include whether Google or Google Ventures will be investing in the startups or if successful teams or companies will be integrated into Alphabet rather than falling under the Google brand.

On Friday, Google shares closed down 5.41% at $737.77. Year to date, the stock is down by almost 7%, while in the last year, it is up by almost 27%.