Google CEO explains 'Area 120' division where employees build their own startups

Google has created an in-house startup incubator called Area 120 to formalize its approach to letting employees tackle new ideas.

"We've always had a strong interest from within Google for people to go work on new things and have developed many of our products internally that way," CEO Sundar Pichai told Forbes' Miguel Helft. "At our scale, we want to make sure that there is a thoughtful way by which you give an avenue for those projects to be ambitious."

Pichai confirmed that the incubator, which was first reported by The Information last month, is a play on its famous 20% time, which gave employees freedom to work on things outside of their regular work that they were passionate about.

Teams within Google can submit a business plan to the incubator, run by executives Don Harrison and Bradley Horowitz, and if they're selected Pichai said they'll be able to stay in the program even as long as six months.

Here's a description of the original 20% time that founders Larry Page and Sergey Brin included in their 2004 IPO letter:

"We encourage our employees, in addition to their regular projects, to spend 20% of their time working on what they think will most benefit Google," they wrote. "This empowers them to be more creative and innovative. Many of our significant advances have happened in this manner."

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