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Illustration by Glin Dibley

We take a peek inside Google Labs, the online giant’s incubator for the next great idea.

Hardly anyone outside the company even knows it, but every December, an informal, almost comical award ceremony is held at Google’s headquarters in Mountain View, Calif. Engineers, programmers and other staffers crowd into a room to see a handful of employees receive trophies in the form of giant science-lab beakers filled with colorful jelly beans.

Though the award may not look as impressive as a golden, glistening Oscar statuette, this goofy Google honor is actually a serious and significant prize — and worth millions of dollars more than an Academy Award. That’s because the candy-filled glassware recognize the best innovations developed within the search-engine giant’s collective think tank known as Google Labs.

Google Labs isn’t really a laboratory, per se. There aren’t test tubes on tables or beakers bubbling with strange-colored fluids, and it doesn’t have its own wing at the famed 26-acre Googleplex campus in Northern California. Instead, Google Labs exists merely in the minds (and the computers) of Google employees. A concept initiated early in the company’s history and introduced to the public in 2002, Labs began when Google co-founders Larry Page and Sergey Brin decided to allow engineers and programmers to devote 20 percent of their time, or one day each week, to projects of their own choosing. It was a bold move, but Page and Brin figured the great minds they hired would be even more creative if they were given free rein to unleash their imaginations and cultivate their personal interests instead of spending all their energies on assigned tasks.

They were right. The initiative, considered the first phase in Google’s official development process, has yielded some of the most important and innovative features and products released by the company outside of its well-known search engine algorithms and AdSense advertising program. Staffers are empowered to create pre-beta prototypes of products and post them to Google Labs’ homepage (which is accessible via the More menu on Google’s homepage or at. Users test-drive these experimental features and provide instant feedback to the company, which can work out any kinks and decide whether the program is viable for mass distribution.

For employees, the freedom to experiment with little to no red tape — whether it results in success or failure — is liberating. “We pride ourselves on minimal ‘process,’ removing all friction between the idea and the experiment,” says Aparna Chennapragada, a Google Labs product manager.

Online marketing expert Fred Gleeck thinks the company’s forward-thinking approach is a smart one. “I applaud Google,” he says. “Get the idea out there and get feedback from users. If it works, pursue it. If it doesn’t, put it to bed quickly.”

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And many of the ideas have, in fact, worked. So far, 18 Google Labs experiments have graduated into full-blown Google features, including Google Maps, iGoogle, Google Reader, Google Video and Google Docs and Spreadsheets. Sometimes, all it takes to come up with the next great feature is a simple question. In March 2009, for example, user-experience designer Michael Leggett blogged that he “could undo just about any other action in Gmail — why couldn’t I undo send?” That question led Google engineer Yuzo Fujishima to create an Undo Send command, which allows Gmail users to retrieve a hastily posted message within five seconds of sending it.

Actually, most of the best — not to mention the kookiest — features in Gmail are Labs projects. Ari Leichtberg, a Google software engineer working in Israel, was so tired of getting e-mails meant for another employee with a name similar to his own that he came up with the feature called Got the Wrong Bob?, which asks you to verify a message’s recipient if you have several contacts with like names. Another Labs feature, called Mail Goggles, forces late-night users to complete math problems before sending an e-mail so they don’t impulsively send one they may regret the following day. Last February, Google made a Labs color-filing system a regular part of Gmail, along with other functions such as YouTube previews and a system to notify people when users are away from their e-mail.

Many Google News features are Labs experiments as well, such as Google News Timeline, a favorite of history buffs that shows how selected news stories develop chronologically, complete with a zoom-assisted? graphical timeline. Or Fast Flip, a web app that lets users flip through online news pages like a book, share articles with friends and create customized “magazines” based on their favorite subjects.

And let’s not forget helpful tools such as the new Instant Search feature (yep, it was a Labs project), an autofill system that predicts what users are looking for while they type their query and, in the process, shaves precious seconds off each search. Then there’s Aardvark, a social-search tool acquired by Google and placed into Labs that lets users ask questions and receive responses from people in their personal network, instead of the usual method of searching by keyword and fumbling through the resulting websites.

Danny Sullivan, a search guru who owns techie website SearchEngineLand.com, says of Google Labs: “It’s a great way for the company to test various things and decide if they’re worth promoting to the main stage.”

The features that get called up to the big leagues receive graduation diplomas to recognize their successes — and their creators get a shot at one of the coveted glass beakers at year’s end. But of course, not everything goes on to greater glory. Products that don’t make the cut — such as E-mail Addict, which forced compulsive users to take breaks by locking them out of Gmail for 15-?minute intervals — are mourned with mock funerals.

So what’s on tap for Google Labs in 2011? As Chennapragada points out, it’s nearly impossible to guess exactly what future offerings will look like. “It’s hard to tell what’s coming out next,” she says. “Part of the beauty of Google Labs is that it works from a bottom-up structure, so lots of things come in from left field.” But users can likely expect more from Google’s visual-search experiments — features such as the popular application Google Image Swirl, which clusters similar images together in stacks, and the wildly popular Google Goggles, which searches for information such as prices and locations based on mobile-phone photos instead of by keyword.

Speaking of mobile phones, look for more Labs experiments to serve them as well. They’ve had a few hits in this market already, such as last year’s Gesture Search, an Android phone app that allows users to locate any mobile material by scrawling the item’s description on the phone’s screen with their fingertip. “Modern phones have lots of data, and [they] also have touchscreens, so I thought it’d be a good match to let people draw on-screen to get information,” says creator Yang Li, a senior research scientist at Google who specializes in human-computer interaction.

And with the boom in social-networking sites Facebook and Twitter, it’s a safe bet we’ll see more Labs products along the lines of Aardvark that link users’ personal networks to resolve problems.

But Chennapragada says they haven’t planned much beyond that — and they’d like to keep it that way.

“Directionally, it’s about helping users find information in all the situations they find themselves in, in the real world as well as in front of their computers,” Chennapragada says. “Obviously, there are planning and regular product road maps across the company, but Labs is a specific area where we want the innovation and creativity of engineers to drive the features we build.”