Google offers seed funding for widget startups

Google is directly investing in small companies to expand the popularity of its iGoogle product. Google Gadget Ventures grants popular Google gadgets $5,000 for further development. Popular widget businesses are eligible for $100,000 in seed capital with Google taking an equity stake in each company. Google expects to invest $700,000 or more in third-party widget development over the next year.

About 9% of Google’s gadget directory would be eligible for the grant consideration based on the Google Gadget pageview analysis I last conducted in April.

How it works

A gadget must have at least 250,000 gadget views per week to qualify for free Google money. If you develop a Sudoku puzzle from Ireland, Super Monkey Poop Fight, or a collection of daily comics you might be eligible for Google grant money. A selection committee within Google reviews one-page summary e-mails for eligibility and grants money around the world (presumably to anywhere they already have financial means to do so, similar to the Google Summer of Code restrictions).

Successful grant recipients located in the United States are eligible for a $100,000 seed investment for further gadget development. Google invests an initial seed amount and provides incremental slices (trances) of the $100,000 total investment as additional usage targets are met.

Why it’s a big deal

Google now has a corporate investment arm focused on third-party developers. Many of the popular widgets on iGoogle are developed by a single person in their spare time who might achieve surprising success. Success on a platform such as Google Gadgets or Facebook might not have immediate financial impact, but developers now have an additional source of income to build a small business around their JavaScript and Flash skills applied to a small web widget. A developer receiving funding might be able to hire a designer, buy better server hardware, or finance more hours developing fun tools for the Google Gadget platforms.

If surprise success stories such as Desktop Tower Defense are any indication, viral gadget content could receive a new business viability onramp with the supply of these new funds. Google Gadget Ventures could also boost Google’s general developer program and encourage the use of additional Google developer products and services within the gadget window. The introductory Google Gadgets Ventures blog post on the Google Code blog already hints at some of the other Google development tools available to gadget developers such as GData or Google Gears.

In theory a popular web feed could receive a $5,000 grant from Google to develop a Google Gadget version of their news or information. A feed such as Engadget (4,386,688 weekly gadget views) or Daily Kos (226,863 gadget views) might receive $5,000 to create a nice-looking gadget with advanced functionality. Google just provided a widget budget to companies and services who might be on the fence about widget development.

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