Go Google, go

That scion of the Internet has announced that it is making another investment outside of its core business.  I am of course talking about Google.  The Google investment in focus today is in an offshore windfarm in the mid-Atlantic region of the U.S.  The project will stretch 350 miles from New Jersey to Virginia and will connect together 6,000 megawatts of energy generated by a massive windfarm that will be 60% of wind power generation in the U.S. Google is financing the underwater cabling at a price of approximately $5 billion.

This project takes care of many problems simultaneously.  First, more renewable energy.  Second, the NIMBY – not in my back yard – problem; that is: many feel that wind turbines are ugly and they don’t want to see them in their back yards.  Third, more energy for a very thirsty United States.  Fourth, siting the windfarm in a place where there is lots of wind.  What was missing was a way to deliver the power from offshore to onshore.  That’s where Google comes in.

I am cheering Google’s choice, though this violates an ironclad business school principle: only invest in what you know.  In this case, Google is not a power company, it’s supposedly just an Internet search engine company.  However, I think that way of thinking about things is bogus.  Businesses are basically what I used to be: portfolio managers.  They have capital at their disposal and they invest it in the highest and best returning asset that they can and hope to earn excellent, risk-adjusted returns.  Power is very much in Google’s interest since it only exists at the good graces of electricity.

I am also hailing Google for its choice because I feel that Google is a business that serves as a model for what future companies should be: answerable to all constituencies, not just shareholders.  In this instance, just about everybody in the United States uses Google and benefits from Google.  And most of us want a cleaner, more sustainable, energy future.  So good for Google to fund not just what adheres to business school sensibilities, but investment and ethical sensibilities, too.

I would love to see more businesses branch outside of their supposed “core” businesses and make more radical choices based on a more conscious understanding of just how they interrelate to everything else and everyone else on the planet.  Amen!

Jason