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WEDNESDAY, FEBRUARY 15, 2012

The search group is gushing cash faster than an Abu Dhabi oil well.

Sheikhs prefer to redeploy their bounty into stakes of American banks and tourist traps containing a wax Mahatma Gandhi. Google Inc. hardly seems more selective in its choice of where to invest its excess money.

Its latest effort is a green energy programme dubbed RE<C (renewable energy less than coal).

One can see why Google’s inner geeks are interested. Technology in the field is advancing quickly, reducing the cost of production. The political push behind green energy is moving even quicker.

Combine these two and renewable energy will be cheaper than fossil fuels—perhaps not in years, as Google co-founder Larry Page hopes, but certainly in a couple of decades’ time.

This energy shift will undoubtedly result in wealth creation, and destruction, on a massive scale, so Google doesn’t want to miss out.

Moreover, ambition is the fuel of Silicon Valley. Google is the epitome of this culture.

Yet, the company is in danger of flooding its engine by investing in everything from personalized biotech to space flight. And like these initiatives, what is Google’s comparative advantage in renewable energy?

None is the obvious answer.

If this were a sovereign wealth fund, then so be it.

But shareholders aren’t buying a venture capital fund when they buy Google stock. And they probably don’t want Page and other executives spending their time, or Google’s cash, on lots of pet projects.

Spreading the company and the efforts of its executives too thin may accomplish little more than satisfy the hubris of the company’s founders.

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