Last year, I looked at Google's move into philanthropy with it setting up a special arm to to fight poverty, disease and global warming. Google.org has the freedom to form start-up companies and work with Venture Capitalists. It also has to make a profit pay taxes. True to form, Google was signalling that it would redefine philanthropy.

Just how much it's reshaping that world is evident in announcing over $25 million in new grants and investment as the first tranche of the total commitment of $2 billion that would be used to make the world a better place.

Google.org's five "core initiatives" over the next five to 10 years include identifying communicable diseases and droughts; empowering the poor with information about public services and promoting growth of small-and medium-scale enterprises in the developing world. The interesting part is the way Google is approaching philanthropy as a venture capitalist. It's investing in small and mid-sized businesses in the developing world in order to create jobs and fight poverty, and in renewable energy. And typical of good venture capitalists, it's doing it in tranches so that it can learn along the way and cut or tweak if necessary.

The entire story is covered by The Wall Street Journal. Watch the video interview with Google.org's executive director Larry Brilliant.

Of course, $25 million is nothing for Google which was recently reported to have a market value of $192 billion. Still, what's important is that the money highlights Google's venture capital style approach.

"An amount like $30 million is a great start, but it is really nothing to Google. But it will give them the chance to learn from the investments and see what is working and what is not," Mario Morino, chairman of Venture Philanthropy Partners, a philanthropic investment organization, told Vishesh Kumar at TheStreet.com.

All this raises some interesting challenges. First, is there a risk that the company is under-estimating the political, social, legal and economic complexities of the world's problems? And secondly, would it's venture capital strategy put it in competition with other companies, and what are the implications for industries, such as the energy sector?