The Nov/Dec 2015 issue of MIT Technology Review has an interesting article on the industrial lab side of Google, which asks - using the new name of Google's parent company - What will Alphabet be when it grows up? The article's subtitle - To truly change the world, Google's new holding company will need something that has eluded many previous industrial labs: an effective commercialization strategy - gives a glimpse of the challenges ahead. It analyzes Google's reorganization in terms of "the profitable parts of the Google empire" or "core Google" and "all the parts of the vast empire of the vast empire that don't make money," including the R&D lab Google X. Yet, the article focuses on a far more interesting story that arises from the organization: will Alphabet [the new name for Google's parent company] be able to demonstrate a productive new path for industrial innovation?
The author, Jon Gertner, reminds us of Bell Labs, which "was not only the country's most elite industrial lab; it was, for many decades, among the world's most elite institutions for research in mathematics, physics and material science." He emphasizes that "while much of Bell Labs' reputation rests upon the breakthroughs of its research department, its less glamorous but far larger development department did much of the organization's heroic work." Another difference is that, while "Bell Labs organized its R&D efforts around communications-related pursuits", "Google has consistently and intentionally funded expensive R&D work that is unrelated to its core business."
Gertner then describes how Google has been able to dodge Wall Street's pressure for short-term, risk-averse wins thanks to "the insane profitability of Google's advertising business" and "Page and Brin's extraordinary... desire to spend money on risky new ideas." (He uses the expression "Medici-like patronage".) Overall, Gertner argues toward "organizing complex, innovative efforts around particular technologies" and asks: "How do you commercialize advances unrelated to your core strengths?"