I would say it did panned out. Gmail, Google News, Google Reader, Orkut [released before Facebook and becoming a leading social network in South America for a w

I would say it did panned out. Gmail, Google News, Google Reader, Orkut [released before Facebook and becoming a leading social network in South America for a while] and many other projects were built as part of the 20%. The challenge wasn't to get people to build incredible new ideas, it was the same as in every large company with "an unit" generating ideas, like Xerox -> PARC, Bell Telephone Company -> Bell Labs, etc. The leadership doesn't care about any of this, they want to expand their main business. No executive wants to be made obsolete and be replaced by the next thing run by other executives. Google is no different. For instance Orkut (person, not site) was running the site on his own on couple of servers the whole time. Google paid very little attention to it.