Google is setting up an in-house startup incubator called 'Area 120' to help retain its entrepreneurial talent and give them an avenue to explore new ideas, CEO Sundar Pichai, reported ETtech citing Forbes.

"We've always had a strong interest from within Google for people to go work on new things and have developed many of our products internally that way," Pichai told the publication. "At our scale, we want to make sure that there is a thoughtful way by which you give an avenue for those projects to be ambitious" he said.

This incubator is a new version of Google's famed '20% time', that allowed employees to spend 20% of their time on side projects they are most passionate about. Among the big successes of this program include Google News, Gmail, AdSense and now-defunct Orkut. Pichai said teams accepted to this program may spend about six months on the idea, instead of 20% of their time. Google would also lend its computing resources to incubate some projects.

Earlier reports had suggested that teams can also later create independent companies and Google may invest in some of them. The incubator is reportedly headed by Google executives Don Harrison and Bradley Horowitz.