Google admitted that the timing of the venture may raise some eyebrows.
"Economically, times are tough, 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," it said in its blog post.
(Comment: I think after practically inventing the Cloud Google has stalled in the past few years. Google Search, AdSense, AdWords, Map, and Earth have been followed by a weak Gmail, Google Docs, failed Virtual Reality and Social Networking.
(I have my own views on big guys vs. little guys. Big guys provide networks and really complex software, small guys produce innovation. In the past few years Google has become another Yahoo and MSN, and should concentrate on extending Search, Mapping and Ad software and trying to make peace with the Microsoft/Yahoo universe.
(I think Google decision to start a venture Capital is a wise confession that it now must sustain an ecosystem allowing most of the activity and profit, if not best profit margins, to go to partners. Microsoft has understood this for some time. This move in my opinion shows Google is maturing in to a solid competition with Microsoft, and marks that it will be even harder for MSN and Live to establish Microsoft's .NET and Desktop power in to the Cloud.)