SAN FRANCISCO -- Google Inc. (Nasdaq: GOOG) is expanding into alternative energy in its most ambitious effort yet to ease the environmental strain caused by the company's voracious appetite for power to run its massive computing centers.
As part of a project announced Tuesday, the Internet search leader and its philanthropic arm will pour hundreds of millions of dollars into a quest to lower the cost of producing electricity from renewable energy sources such as wind and the sun.
If Google realizes its goal, the cost of solar power should fall by 25 to 50 percent, co-founder Larry Page said in an interview.
The Mountain View-based company initially hopes to harvest cleaner-burning electricity to meet its own needs and sell power to other users or license the technology that emerges from its initiative, dubbed "Renewable Energy Cheaper Than Coal."
"If we achieve these goals, we are going to be in the (electricity) business in a very big way," Page said. "We should be able to make a lot of money from this."
Google joins a long list of other prominent companies striving to become more environmentally friendly amid mounting concern that pollution from coal, oil and other so-called "dirty" power generation is causing potentially catastrophic climate change.
Wal-Mart Stores Inc. (NYSE: WMT), the world's largest retailer, made a major commitment to renewable energy two years ago. And technology leaders like Cisco Systems Inc. (Nasdaq: CSCO), Microsoft Corp. (Nasdaq: MSFT), IBM Corp. (NYSE: IBM) and Intel Corp. (Nasdaq: INTC) are trying to become more energy efficient.
Google's initiative will likely stand out because of its financial muscle and its renowned brand, said Nicholas Parker, chairman of the Cleantech Network, a group that tracks investments in alternative energy.
"This is like a shot across the bow," Parker said. "It shows there are people willing to put their oars in the water to get the job done."
Google ended September with $13 billion in cash — a stockpile that's expected to grow as the company continues to mine growing profits from its search engine, which has become the hub of the Internet's most powerful advertising network.
The notion of an Internet company diversifying into the alternative-energy business isn't as incongruous as it might seem.
Google Chairman Eric Schmidt has often cited the company's ever-expanding power needs as one of his biggest worries, and Page and co-founder Sergey Brin have long been interested in electric cars and other inventions related to alternative energy.
Google's headquarters already draws some of its power from one of the country's biggest solar power installations.
What's more, Al Gore, who won a Nobel Prize for his efforts to educate people about the perils of global warming, has been a Google adviser for several years. Page said the former vice president influenced Google's decision to accelerate its investment in renewable energy.
Just how much electricity Google requires to power the hundreds of thousands of computers that run its search engine and other online services is a closely guarded secret.
But there's little doubt Google's power demands will escalate as the company introduces more free products and services that will require even greater computing capacity.
Next year, for example, the company reportedly will unveil a service that will allow users to store a wide range of their personal files on Google computers. Page declined to comment on the report in The Wall Street Journal, which cited unnamed people familiar with the matter.
"As Google grows, we don't want the business to become part of the problem. We want to be part of the solution," said Larry Brilliant, executive director of Google's philanthropic arm, Google.org.
Toward that end, Google aims to produce one gigabyte of power from renewable energy at prices below the rates of electricity generated at coal-burning plants. One gigabyte of power would be enough to supply the needs of a city the size of San Francisco.
Page predicted the goal could be reached in a matter of "years, not decades."
The push into the energy industry serves as another reminder of Google's belief that it can harness technology to make the world a better place.
"We do like to take advantage of our noted ... position to motivate the world and do things that are good," Brin said during a Tuesday conference call with reporters.
Google intends to spend at least $20 million next year to finance renewable energy research and hire more experts in the field. At least 20 to 30 new employees will participate in the project next year, Page said, though he hopes the number will be larger than that.
Google.org will invest "hundreds of millions" in companies specializing in renewable energy, Page said. The philanthropic arm, which sits under the umbrella of the Google Foundation, will draw upon its holdings of nearly $2 billion worth Google's stock, which gained $7.57 Tuesday to close at $673.57.
Google.org already is working with two outside companies: Pasadena-based eSolar Inc., which specializes in solar thermal power, and Alameda-based Makani Power Inc., which specializes in wind power.