Google expands venture group, wants more deals

SAN FRANCISCO Mon May 3, 2010 5:13pm EDT

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SAN FRANCISCO (Reuters) - Google Inc's (GOOG.O) corporate venture arm plans to pick up the pace in 2010, as the $100-million-a year-fund marks its first anniversary with a bigger team and the intention to look for deals outside of North America.

One year after launching Google Ventures with two partners, Google said on Monday its in-house investment group now counts 11 partners and has invested in a total of 10 companies, including an investment in mobile payment technology company Corduro Inc, which Google announced on Monday.

In a briefing with reporters at the Google headquarters in Mountain View, California, Google Ventures Managing Partner Bill Maris said the fund would aim to invest $100 million in 2010 by funding start-up companies involved in everything from Internet technology to biotech.

With new partners at Google Ventures hunting for investment opportunities, Maris expected the fund to participate in more deals and invest more money than in 2009.

Google Ventures also had a $100 million budget in 2009, but Maris would not say how much of the fund was spent.

Maris also told Reuters after the briefing that Google Ventures would consider opening overseas outposts as it looks for opportunities in high-tech regions such as India and other parts of Asia. Until now, the fund has only invested in North America.

Google, the world's No.1 Internet search company, launched its venture capital arm in March 2009 to seek opportunities that maximize returns rather than investments that strictly fit Google's strategic vision.

Intel Corp (INTC.O) and Walt Disney Co (DIS.N) also have in-house venture investment groups.

The expansion of Google Ventures comes as Google has been on an acquisition spree, acquiring more than a half dozen small companies in recent months.

Google Chief Executive Eric Schmidt, who was also at the event on Monday, said Google Ventures is completely separate from Google's mergers and acquisitions team and serves a different purpose.

"This is not a stalking horse for acquiring companies," he said.

Schmidt said he did not personally get involved in any of the investment decisions Google ventures makes, limiting his role to setting the budget and helping to shape the group's general practices.

Schmidt hoped Google Ventures would pick successful companies to invest in at a better than average rate, which he said historically has delivered one "huge hit" for every 10 investments. But he stressed Google Ventures was designed to take a long-term view.

"Venture investing is a long-term game. It's years, it's not quarters. It might be a decade," Schmidt added.

(Reporting by Alexei Oreskovic; editing by Andre Grenon)

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