This is a common misconception by non financial people (no offense). You have to look at this from a finance and risk perspective.

1. Cash lying around in your bank account is usually a poor use of working capital (you are effectively "losing" money by it sitting in the form of cash)

2. Investing in "innovation" is always risky. Look at how many internal Google apps get scrapped a year or two into launch. They effectively write those off and it's a direct loss to Google's bottom line.

3. "Innovator's Dilemma" - big companies realize they are not the best suited to invest in innovation, hence why startups and buying them are actually a net positive for large businesses.