Google officially debuts its internal Area 120 startup incubator and announces a VR advertising project called Advr aimed at testing formats
Context & Ripple Effects
Area 120 moves from rumor to official program: after spring 2016 reports of an in-house incubator run by Don Harrison and Bradley Horowitz, Sundar Pichai framed it as formalizing 20% time, and Google has now launched it with a first public artifact — Advr, a VR advertising experiment. The choice of a VR ad project is no accident: Google stood up a dedicated VR division under Clay Bavor in January 2016, so the incubator's debut doubles as a way to pressure-test monetization for that investment.
The debut also sets up a track record question. By late 2018 the incubator had greenlighted roughly 50 employee projects, and in 2021 Google folded Area 120 into a broader Labs team still under Bavor — making this 2017 launch the founding moment of a structure that outlived the individual experiments it spawned.
First-order effects
- Google employees gain a sanctioned path to turn side projects into incubated teams instead of leaving to found startups, with Harrison and Horowitz as the gatekeepers deciding what gets resourced.
- Advertisers get their first structured look at VR ad formats through Advr, which exists explicitly to test what advertising looks like inside Google's year-old VR division.
Second-order effects
- If Advr's format tests produce usable results, they give Google's core ads business a head start on VR inventory before rivals define the standard — while competing platforms must decide whether to build equivalent in-house incubators or risk losing entrepreneurial engineers to Google's version.
Third-order effects
- The pattern points toward big-tech R&D consolidating around named internal incubators that double as retention tools and option portfolios — a structure durable enough that Google later reorganized Area 120 alongside AR/VR and Starline into the Labs team rather than shutting it down.
- For VR specifically, advertising becomes the monetization question every platform must answer early, with format experiments like Advr shaping what immersive ads are allowed to be before the medium matures.
The trend: Large tech companies are institutionalizing internal startup incubators as both an employee-retention mechanism and a low-cost pipeline for new product surfaces like VR advertising.