Google: Celebrate Your Self-Driving Car with a Licensing Business

Getting behind a wheel is a right of passage for most teenagers. Now in its teens, Google (GOOG) has joined the crowd, only with cars that can drive themselves. Test vehicles have logged an impressive 140,000 miles, including down the notoriously twisty Lombard Street in San Francisco.

It's still an experiment, so don't expect Google to decide where you want to go, as it claims to predict what many people will want to find. But now that the company nailed some success in this area, it's time for another teenage rite: getting a license. Only, the license would be something that Google would create. The often unfocused company has a chance to create this generation's Bell Labs or Xerox (XRX) PARC -- an innovative dynamo -- and actually create multiple revenue streams beyond advertising at the same time.

Google has often demonstrated the focus of a high school sophomore with ADD. It jumps into one new product line or business after another, with almost all going nowhere from a financial view. Where the company falls short is in launching new ventures. With patience, sometimes things go well. But far more often, the company's efforts quickly fade.

Google should take a hint. Some organizations are terrific at creating new ideas and developing technology, and that type of work is necessary. How far would high tech have come without a Bell Labs creating the transistor or Unix? Where would computers be if Xerox Palo Alto Research Center hadn't done groundbreaking work on graphic user interfaces and the mouse?

Unfortunately, companies are increasingly reluctant to invest in R&D unless it can promise an immediate payoff. However, someone has to move into new directions that may pay off or not. Google has shown itself open to funding work that sounds interesting and then deciding after the fact whether there is an economic model that can support the product or service.

Perhaps Google should try a different business model. Keep the work that continues to churn the advertising revenue and find other companies that might fare better in commercially developing the company's ideas.

Google would act similarly to NASA, which has been one of the biggest driving forces in invention for decades, or to universities that get a cut from commercialized development of academic research. Such an approach would relieve Google of having to focus on areas in which it lags and, instead, doing something necessary that most other companies won't. Google could always keep an especially promising idea in house, and it could still make money on sunk R&D investment that will otherwise be gone forever.


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