Yes, the rumors are true. Google’s Rich Miner is moving from the Android team to a new venture arm called Google Ventures. Miner recently appeared at a conference identified with a Google Ventures name tag, which reignited rumors from last summer about Google’s venture investing plans. A source confirms that Miner is part of that team and expects a formal announcement in a few weeks. Google’s chief legal officer, and one-time SVP of corporate development, David Drummond is overseeing the fund, which will be led by investor Bill Maris.

A Googler at another conference confirmed that Google’s investment activities are shifting. At the Plugg conference in Europe last week (which is organized by our editor Robin Wauters), Google M&A exec Anil Hansjee said of his group’s investment activities, “”We are doing fewer and fewer of that out of my team as we form a proper investment fund that will be a separate effort.” (Jump to the 50 second mark in the video below).

The history of corporate venture funds is a grim one. Companies invest in startups for all sorts of “strategic” reasons, not all of which end up making them any money. That is the problem with corporate VC funds: their main goal is not always to maximize returns. If a startup is truly strategic for Google, it should just acquire it outright. In effect, this has been its venture strategy so far (outside of its philanthropic arm, Google.org).

Starting a venture fund is not really the best use of Google’s capital. It is in effect saying that it has so much cash it doesn’t know what to do with it. Google would be better off paying a dividend to shareholders or buying back stock than playing venture capitalist, no matter how smart its venture capitalists might be.

What do you think?

http://vimeo.com/moogaloop.swf?clip_id=3782275&server=vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=&fullscreen=1
Anil Hansjee, (Google M&A Director EMEA Region) – Introducing himself at Plugg from Plugg Conference on Vimeo.