Reports in years past have suggested that Google, like Intel, Motorola and other large tech companies, might open an internal venture capital fund to invest in startups. The idea has never come to fruition, but a brief in this morning’s Wall Street Journal says that discussions are on once again.

David Drummond, a senior vice president and Google’s chief legal officer, has been tapped to lead the fund, and the company has hired William Maris, a former entrepreneur, to help set it up. Maris worked at a health investment fund in 2005 with Anne Wojcicki, the wife of Google co-founder Sergey Brin, according to the NYT’s DealBook.

What Google could potentially invest in is probably somewhat limited by its own extensive activities on the Internet. Startups in advertising, email, media, search, social networking and many other areas would likely be leery of letting a potential competitor see the inner workings of their business and technology. And, an independently operating “philanthropic” (but for-profit) division of the company, already handles cleantech investments of all sorts.

That leaves one major area in which Google has expressed strong interest: Telecommunications. With its Android mobile platform creeping toward completion and the need to break into mobile advertising, Google has reason to put money into mobile and communications companies of all stripes. Of the few investments the company has made so far, most are somewhere in the communication space.

Whether those companies should work with Google is another question. While the search giant has not been an active investor, it has bought up quite a few companies — only to have most of them disappear within its sprawling mass. Google’s reputation alone should net it plenty of interest, but there’s also plenty of competition from private venture firms, as well as other corporate funds, and no guarantee that the search giant would be an attentive strategic partner.

Google’s direct investments to date include public WiFi operator Meraki Wireless, a Chinese P2P company called Xunlei, and British femtocell company Ubiquisys.

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