David Coz worked in Google's Paris office, but what he really wanted was a job at the mothership in Silicon Valley.

Last spring, the French-born Coz turned up at Google headquarters in Mountain View hoping to chat about his latest project with anyone who would listen. "I came with my prototype and my luggage," he says, "and I met with 10 or 15 people." One of them was Christian Plagemann, a Google research scientist exploring new interfaces for consumer electronics devices. Though they'd never met, Coz showed him the prototype: a pair of virtual reality goggles made out of cardboard.

Plagemann was intrigued—"David showed me this cardboard box," he says, "and I thought it was absolutely amazing"—and he took the contraption to Google's bigwigs, including CEO Larry Page and vice president of engineering Sundar Pichai. "I convinced him to leave me one of the boxes. He flew back to Paris. And I started showing it around," Plagemann remembers.

Two months later, Pichai unveiled the project on the keynote stage at Google's annual developer conference in San Francisco, and Google employees handed cardboard headsets to thousands of coders as they streamed from the speakers' hall. It was a slightly odd sideshow at a conference where the company typically doled out millions of dollars in phones, tablets, and other electronic gear. But in the year since, this unexpectedly low-tech device—something that wraps around an ordinary smartphone screen—has engendered a sweeping virtual reality project inside the company, giving Google a foothold in an area poised to reshape the tech world.

Coz did join the mothership. He and Plagemann and the other Paris employee who created Google Cardboard, Damian Henry, are all part of a Google VR team that's "bigger than people think it is." In December, the team roped in a group of 3-D vision experts led by Steve Seitz, a University of Washington professor whose work gave rise to a panoramic photo application from Microsoft called Photosynth. John Wiley, who previously oversaw the visual design of the Google search engine, recently joined as well. And the team is now fashioning rather complex VR tech that puts Google in competition with Facebook, Microsoft, and others.

On Thursday, after team leader Clay Bavor showed off a new incarnation of the cardboard goggles at this year's Google I/O developer conference, he revealed that the company has designed a 16-lens camera that can record videos across 360 degrees, and that it's developing a software system that can turn these videos into the kind of immersive, stereoscopic experiences the goggles are intended to provide. The company calls all this its "Jump" VR platform, and it says GoPro will offer a version of its camera this summer. But all these developments, it seems, are merely precursors to something larger. "We have ambitions beyond just Cardboard," Bavor says. "There are many other things going on."

Attendees look through Google Cardboard VR (virtual reality) viewers during the Google I/O Annual Developers Conference in San Francisco. David Paul Morris/Bloomberg via Getty Images

'The VR Nerd'

The rise of Google Cardboard shows the unusual way Google operates. In Paris, Coz and Henry worked for the Google Cultural Institute, a way for museums and other institutions to put their art online. Their cardboard goggles, meanwhile, were a "20 percent project," where Google employees dedicate one day a week (that is, 20 percent of their time) to some new idea.

The project began after they stumbled onto a little-seen YouTube video shot from a flying drone. It was a stereoscopic video meant for a 3-D headset they didn't have, and at some point, they realized they could view such videos if they wrapped a makeshift headset around a phone—"you just have to make sure the phone understands where your head is looking," Coz says—and they pitched the idea to their Paris manager as a way for students to virtually visit museum galleries.

20-percent projects have sparked some pretty serious products in the past—think Gmail and AdSense—but even for Google, the transformation of some French cardboard into a well-appointed VR team is an extreme case. "When it came out last year, it seemed like slap in the face of VR—a slap in the face of anyone who thought VR was a high-brow thing. They were like: 'It doesn't have to be that way,'" says Brian Blau, an analyst with research outfit Gartner who previously explored virtual reality both as an academic and in the commercial world. "But this slap in the face became 'Whoa, we're right.' And now it's a lot more serious too."

Last spring, after Plagemannn—a German-born engineer who previously worked on self-driving cars at Stanford UNiversity—showed the cardboard goggles to the Google braintrust, someone suggested he take them to Bavor. Bavor was a vice president of product management who oversaw user interface design for Gmail, Google Docs, Google Drive, and Google Apps. But inside the company, he was known as a "VR nerd."

"I'd been experimenting with virtual reality and telepresence: How do you and I have a conversation if we're not actually here?" says the boyish-looking Bavor. It's the kind of thing, he explains, that he has always experimented with. He likes to think he created his first VR application when he was twelve, using the old Apple Hypercard program to create a panoramic image of his home. "There were no goggles. It was very much a poor man's virtual reality. But it was something I was really thinking about."

Under Bavor, the team turned those cardboard goggles into something that's now used by as many as one million people. Blau says this makes Cardboard the most successful VR device of all time—"by a large stretch." Using Google's designs, anyone can build their own goggles, dropping two lenses into the front of the cardboard contraption and a phone into the back. From the phone, they can then use an app to play those stereoscopic videos—videos that capture the same scene from two slightly different angles and give the illusion of depth when viewed through two separate lens (one for each eye).

As the project expanded, the team added camera designers as well as Seitz and his team. Seitz retains his post at the University of Washington, but about five years ago, he joined Google to create a group dedicated to 3-D vision. "I was told I could come to Google and hire whoever I wanted and work on whatever I wanted," he says. "I was able to hire my dream team." Previously, the group built 3-D photo tours atop Google Maps and they worked on a tool that lets you refocus a photo after it's taken.

Bavor declines to say what the company is working on outside of Cardboard and Jump. But according to the Wall Street Journal, the team is building a "version of the Android operating system to virtual reality applications." Though the Journal is short on details, this implies the OS would run on a new breed of hardware—that is, googles that aren't made of cardboard.

'At The Right Time'

Google's virtual-reality effort puts it on a parallel track to Facebook, which acquired the VR startup Oculus last spring and is set to launch its Rift headset later this year. But Google is also eyeing "augmented reality" akin to what Microsoft is exploring with its Hololens headset. In addition to its much discussed Google Glass headset—which sits in a kind of limbo at the moment—the company recently joined a group that invested $542 million in the cagey augmented reality startup Magic Leap. Bavor says he was "very much involved" in the deal.

Augmented reality systems provide a way of layering 3-D images—or "holograms"—atop what you see here in the real world. The hope is that they not only provide a new way of using computing systems, such as hanging a Skype window on your wall, but also transform how we watch movies and play games and even help designers and engineers create physical objects. Virtual reality, by contrast, shuts out the real world, immersing you in a different "place" in a way that's best suited to games and education and training. On Thursday, Google released what it calls Expeditions—a way for school kids to take virtual trips to places like Venice and the Great Wall of China. It's an echo of the original pitch Coz and Henry made to their manager in Paris.

Bavor says this is the immediate future of VR. But Facebook also sees it as a means of worldwide communication. That's a long way off, but we're moving in that direction—at Facebook and Google and others. "Cardboard," Coz says, "was a project that came at the right time."

Correction: This story originally said that Steve Seitz joined Google about two years ago. He joined about five years ago.