Monday, July 09, 2007

Google's Aging Process

Before I left on a week's vacation, I grabbed the unread Wall Street Journals from now two weeks ago.

Among the issues were several interesting articles on which I'll write some posts. The first is about the Thursday, June 28 piece on Google's loss of employees to new technology startups.

Google's "People Operations Vice President," Laszlo Bock, alleges that the company's historical rates of attrition of 5%, and offer acceptances of 90%, remain steady. Rather, he says that the company's swollen hiring and size now account for the larger numbers of people rejecting Google employment, or leaving.

Still, the stock price's behavior is not what it was, and this can easily affect those who hope to make a fortune on the company's stock's appreciation from their individual, or partial efforts.

One startup, Facebook, has hired 10 engineers, of 11, who had competing offers from Google. Dustin Moskovitz, a co-founder of Facebook, alleges that a lot of people at Google are now talking about leaving. In one case, a Facebook hire liked Google and its environment, but simply felt that his financial options were better with Facebook. This new employee also described Facebook to friends as,

"the Google of yesterday, and the Microsoft of long ago."

Welcome, senior managers of Google, to adulthood. When you become the titan that employees leave to seek better, more nimble environments, you are nearing a peak.

Frustration, burnout, and, it seems, simply Google credentials, are behind many employees' reasons for leaving.

Whether Google has a "problem," or not, is not the point. The point is, a company known as a predatory innovator in Silicon Valley only two years ago, is now experiencing a brain drain to companies which are smaller, allow for more relative impact by individual employees, and, by necessity, seek innovative, paradigm-shifting solutions.

Google now has a stake in various technical and business approaches to various online technology issues and problems. Having thus become somewhat anchored, it is feeling the effects of Schumpeterian dynamics. As it grew so quickly, it was probably not observed as having had to sink fixed positions down on a number of issues. But it has.

I find it, frankly, reassuring to read that, now, even Google is too large to afford truly "fresh" thinking about various technological approaches, such as a "video-related problem" some recent emigres were working on. They founded a new company7, Ooyala, instead of stop working the problem as they thought best, as Google was apparently having them do.

So, my parting thought here is, when a company known for meteoric sales, profit and market value growth by virtue of its upsetting everybody else's applecart, begins to limit its innovative, free-spirited workforce, in order to manage and coordinate its business and technological positions and strategies, how much longer will it be the same fast-growing innovator?

Schumpeter, nearly 100 years ago, said, 'not long.' I agree. And it won't take another Google to affect Google- simply a lot of individual, innovative smaller firms working their individual parts of various online technological challenges.

Google went public too recently to be in my portfolio selections. Now, I'm wondering if it will ever be selected, due to this portent of flattening growth at the online behemoth.

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