Google Summer of Code began in 2005 as a complex experiment with a simple goal: helping students find work related to their academic pursuits during their school holidays. Larry Page, one of Google's co-founders, was pondering the age-old problem of scholastic backsliding: students work hard and learn a great deal during the academic year, but without the right employment opportunities and other pursuits outside of school, technical skills atrophy rather than get honed and expanded. Larry wanted Google to help solve this problem.
The obvious solutions failed on geographical grounds. If a student wasn't in the optimal location, obtaining a useful internship could be difficult or impossible. Finances were also a problem; many internships are low paying or entirely unpaid, making it difficult for students to take the right job while still paying the bills. Finally, even if a job was available in a technical field, it would not necessarily introduce a student to the broad set of skills required to do software development well. For example, creating a website for a local non-profit requires technical skill and would no doubt be personally gratifying, but wouldn't necessarily require using an IDE, checking into source control, or creating tests.
The perfect answer? Encourage students to participate in open source projects. Open source development occurs online, solving the geography problem and giving students the chance to work in a globally distributed team. Working on an open source project provides exposure to the entire software development process and toolchain. Students enjoy the benefit of having a body of reference work available to future employers and university admissions committees. Even better, students get the chance to work on a codebase under active development rather than a lab project or other single-use assignment.
The Google Summer of Code program provides a cash stipend from Google to students for work with recognized open source communities. This stipend allows students to focus on their development work rather than getting a job unrelated to their academic pursuits. A key piece of the puzzle is finding projects that are excited to find new contributors and to provide helpers to get new student contributors up to speed both technically and socially.
The first year 40 projects participated—400 students began the experiment.
In 2010, the sixth Google Summer of Code wrapped up with the best results yet. More than 89% of the 1,026 student participants in the program successfully completed their projects. Best of all, most of the organizations participating over the past six years reported that the program helped them find new community members and active committers.
You can find more information about each year of Google Summer of Code on the program statistics page of the GSoC Knowledge Base: http://code.google.com/p/google-summer-of-code/wiki/ProgramStatistics