This month's Communications of the ACM features an article on Google's Hybrid Approach to Research by Alfred Spector, Peter Norvig, and Slav Petrov. Since this is a topic I've blogged about here before, I thought I'd provide a quick pointer to the article:
Overall I think the article does a nice job of summarizing Google's approach. The key takeaway is that Google doesn't separate its research and engineering activities: most "research" at Google happens during the day-to-day work of building products.
The benefit of this model is that it's easy to have real world impact, and the pace of innovation is fairly rapid, meaning research results get translated into products quickly. The possible downside is that you don't always get a chance to fork off long-term (multi-year) projects that will take a long time to translate into a product. However, there are exceptions to this rule -- things like Google Glass, for example -- and plenty of things I can't talk about publicly. It is true that Google tends not to do "pure academic" research just for the purpose of publishing papers. We could have a healthy debate about whether this is good or bad, but I'll leave that for the comments...