Google Gadgets are small tools and toys that integrate with iGoogle. Google is funding developers to work on creating gadgets through Google Gadget Ventures. Great idea. They offer:

1. Grants of $5,000 to those who’ve built gadgets we’d like to see developed further. You’re eligible to apply for a grant if you’ve developed a gadget that’s in our Google gadgets directory and gets at least 250,000 weekly page views. To apply, you must submit a one-page proposal detailing how you’d use the grant to improve your gadget.
2. Seed investments of $100,000 to developers who’d like to build a business around the Google gadgets platform. Only Google Gadget Venture grant recipients are eligible for this type of funding. Submitting a business plan detailing how you plan to build a viable business around the gadgets platform is a required part of the seed investment application process.

Google continue to make good moves to manage in a new world. With this program they are not investing in creating an infrastructure to develop software, support software, hire staff… Instead they get to tap the drive and capabilities of those developers working on products which increase the value of iGoogle through small cash incentives. Previously they offered Google Gadget Awards. They also fund Google summer code - to support software developers creating open source software and reducing computer waste (where they didn’t stop with improving the servers they use but to making a broader impact on society). They really do a great job of leveraging their efforts well.

Related: Google Innovation and Entrepreneurship - Google Custom Management Improvement Search Engine - Experiment Quickly and Often - Innovate or Avoid Risk