> You are correct that "The CEO's job is to allocate resources to initiatives that will make the company money"
Actually that's not strictly true. The CEO's job is to satisfy the shareholders/board of directors. Normally that coincides with making the company money, but not always - the idea of a legal duty to maximise share value is a widely held myth. In the case of Google, most of the shares are still held by the founders. If they just want the company to do cool and impractical things they have the right and the capacity to make it do so.
Actually that's not strictly true. The CEO's job is to satisfy the shareholders/board of directors. Normally that coincides with making the company money, but not always - the idea of a legal duty to maximise share value is a widely held myth. In the case of Google, most of the shares are still held by the founders. If they just want the company to do cool and impractical things they have the right and the capacity to make it do so.