The economist

EW companies are as creative as Google, which serves up innovations almost as fast as its popular search-engine serves up results. This week the firmunveiled a new version of its Chrome web browser and launched Fast Flip, which lets users scroll through the contents of an online newspaper in much the same wa that the leaf through its pages in print. !n "eptember #$th the compan will roll out another fledgling product, Google Wave, for a test involving some %$$,$$$ people. &illed as a revolutionar wa to collaborate online, Wave is also the product of a new, more structured approach to innovation within the compan . For ears Google has had a fairl informal product-development s stem. 'deas percolated upwards from Googlers without an formal process for senior managers to review them. Teams working on innovative stuff were generall kept small. "uch a s stem worked fairl well while Google was in its infanc . &ut now that it is a giant with ($,$$$ emplo ees, the firm risks stifling potential mone -spinners with a burgeoning bureaucrac . To stop that happening, Google has begun to hold regular meetings at which emplo ees are encouraged to present new ideas to Eric "chmidt, the firm)s chief e*ecutive, and +arr ,age and "erge &rin, its co-founders. 't has also given some pro-ects more resources and independence than in the past. &oth moves are designed to ward off the conservatism that can set in as companies mature. .We are activel tr ing to prevent middle-agedom,/ e*plains 0r "chmidt. Google Wave has benefited from this anti-ageing treatment. The new software allows people to create shared content that is hosted on Google)s servers online, or .in the cloud/. When the open Google Wave, users see three columns on their screens. The left-hand one contains folders and address books, while the middle column is a list of .waves/1online conversations users have initiated or signed up to. Clicking on a wave displa s its contents in the right-hand column. ,eople can post te*t, photos, web feeds and other things into a wave and e*change comments with one another instantl . The software e*cites tech folk, some of whom reckon it poses a threat to 0icrosoft)s "hare,oint collaboration package. 'nside Google the pro-ect has generated much enthusiasm too, plus some controvers . The Wave team deliberatel distanced itself from Google)s head2uarters, choosing to be based in the compan )s " dne office. 3nd it insisted that its work be kept secret for a long time so its nascent idea was not sub-ect to nit-picking criticism. "ome Googlers felt this was a betra al of the firm)s open culture. .4ot ever one inside the compan thought that this was super cool,/ admits +ars 5asmussen, one of the two brothers leading the pro-ect, which was allowed to recruit do6ens of software engineers to its ranks. That has not dented Google)s enthusiasm for creating more such teams. 0r "chmidt wants the number to grow from a do6en or so toda to perhaps 7$. The challenge, he sa s, is to find leaders with the calibre of 0r 5asmussen, who previousl worked on an initiative that evolved into the successful Google 0aps. "ome Google-watchers see a much bigger challenge. .Google has been masterful at coming up with a lot of ideas, but none of them has matured to become something that moves the revenue needle,/ sa s Gene 0unster of ,iper 8affra , an investment bank. 'n fairness to the compan , that is partl because man of its popular innovations, such as Gmail, have been given awa to boost search-related

advertising, which accounts for almost all of Google)s revenues. &ut search has been suffering in the downturn9 in the second 2uarter of ($$: Google)s revenues were ;7.7 billion, barel #< higher than the same period in ($$=. Time, then, for the compan to find new ideas that can make a big splash.