Google looks at health technology

Google has announced a new venture capital fund that will invest money to get fledgling companies, including those in health care, up and running.

In addition to health care, the company says it is looking to invest in industries including consumer Internet, hardware, clean tech and biotech.

The company has expressed a keen interest in health IT in recent years with the development of its personal health record platform, Google Health, as well as software that will allow the data from home health monitoring devices to be streamlined into Google Health accounts. The company also formed a health care advisory committee in 2007 to explore future products it might want to launch.

Whether the venture capital fund will look solely at health IT companies, or other facets of the health care industry, remains unknown. Google spokesman Andrew Pederson said the company is working on refining its interests. "We're starting out with a broad focus, and we'll re-evaluate our areas as we go," he said.

Still, announcement of the fund was significant, given Google's historic penchant for buying up small startups, beating venture capitalists to the punch or creating its own products. Timing of the announcement also raised interest, given recent trends in venture capital investing.

According to the recently released, "The Money Tree Report," by PricewaterhouseCoopers and the National Venture Capital Assn., which was based on data from Thomson Reuters, venture capital investment have plummeted in recent months. The first quarter of 2009 saw investments worth $3 billion in 549 deals, down 47% in dollars and 37% in deals from the fourth quarter of 2008.

The co-managers of the Google fund will be Bill Maris, who co-founded the Web-hosting site Burlee.com, and Rich Miner, who co-founded Android, a mobile platform which Google acquired in 2005.

Both men acknowledged that times are tough economically, "but great ideas come when they will. If anything, we think the current downturn is an ideal time to invest in nascent companies that have the chance to be the 'next big thing,' and we'll be working hard to find them."

Plans for the venture capital arm were in the works as early as July 2008. This also is not the first investing fund the company has started. In 2007, Google Gadget Ventures launched as a fund that provided grants to developers creating third-party gadgets for Google's gadget directory, and seed investments to high-performing grant recipients.

The company set up a Web site where companies can submit proposals or learn more about the fund (link).