>From the IP list:
-------- Original Message --------
Subject: [johnmacsgroup] Google's Growth Helps Ignite Silicon Valley
Date: Wed, 23 Nov 2005 15:23:14 -0500 (EST)
From: John F. McMullen <firstname.lastname@example.org>
To: johnmac's living room <email@example.com>
CC: Dave Farber <firstname.lastname@example.org>, Dewayne Hendricks
>From the Wall Street Journal --
Google's Growth Helps Ignite Silicon Valley Hiring Frenzy
Tech Firm Battles Big Rivals To Nab Top Engineers;
Bidding Wars Are Back Math Problem on a Billboard
By PUI-WING TAM and KEVIN J. DELANEY
In June, as engineer Anselm Baird-Smith mulled leaving eBay
Inc. for another job, he received a call from Google Inc.
Within days, Google executives had interviewed him and dangled
before him an enticing offer: a six-figure salary and
restricted stock then valued at several million dollars, to be
distributed over several years.
"Google was really aggressive and they moved fast," says Mr.
Baird-Smith, who holds a doctorate in computer science and is
known for his work as the developer of Jigsaw, software used
in computer servers. As a bidding war escalated, Google Chief
Executive Eric Schmidt telephoned to urge him to defect.
In the 15 months since Google went public, the Mountain View,
Calif., company has galvanized the technology world with its
innovative Internet search technology, its rapidly broadening
business plan, and its soaring stock price. In the office
parks of Silicon Valley, Google also has helped fuel something
else -- a hiring frenzy reminiscent of the dot-com boom.
To accomplish its current pace of hiring about 10 new
employees a day, Google has assembled a formidable hiring
machine. Its recruitment department includes as many as 300
free-lance recruiters who are helping it to identify who's who
in software engineering, according to three people involved in
To locate new talent, Google has held software-code-writing
contests. It has plastered billboards with math problems, such
as one on U.S. 101 in Silicon Valley that asked drivers to
identify "the first 10-digit prime found in consecutive digits
of e." It has paid to insert an "aptitude test" into tech
magazines, encouraging engineers to submit their answers to 21
questions, along with their rsums. And it has upped the stakes
in competing with other companies to draw attention from
engineering students, handing out free pizza and raffling off
gadgets to boost university recruitment.
One top-notch engineer is worth "300 times or more than the
average," explains Alan Eustace, a Google vice president of
engineering. He says he would rather lose an entire incoming
class of engineering graduates than one exceptional
technologist. Many Google services, such as Gmail and Google
News, were started by a single person, he says.
Other top tech firms are fighting back. Google's play for Mr.
Baird-Smith prompted eBay to offer him cash incentives to
stay. Bill Nguyen, a Silicon Valley entrepreneur who also had
been talking with Mr. Baird-Smith, offered the engineer $1
million over three years to work on a start-up, plus a
substantial equity stake in any resulting project. In the end,
Mr. Baird-Smith accepted Mr. Nguyen's offer.
"This is what you have to do if you want to beat Google," says
Although Mr. Baird-Smith got away, Google has succeeded in
snaring other top talent. Its high-profile hires include Adam
Bosworth from BEA Systems Inc., Kai-Fu Lee from Microsoft
Corp., Louis Monier from eBay, and Vinton Cerf, who is often
cited as a founding father of the Internet, from MCI Inc.
Google declined to comment on any specific recruiting cases.
Over the years, Silicon Valley has seen other hiring booms, as
companies such as Apple Computer Inc., Cisco Systems Inc. and
Netscape Communications Inc. wrestled for brainpower while
staffing up during their fast-growth phases. When the dot-com
bubble burst earlier this decade, however, demand for tech
talent dried up, and many workers left the area altogether.
Google, which saw its revenue increase more than sixfold to
$3.2 billion between 2002 and 2004, is helping lead the latest
charge. Its hiring drive began not long after its initial
public offering in August 2004. At that time, the company had
about 2,600 employees, a fraction of Microsoft's 60,000
employees and Hewlett-Packard Co.'s 150,000. Google grew to
more than 3,000 by year end, to nearly 3,500 by March 31, and
to just over 4,100 by June 30. As of Sept. 30, the company had
4,989 full-time employees, 87% more than when it went public.
"We definitely continue to experience the giant sucking sound
that is Google," says Joe Kraus, chief executive of start-up
JotSpot Inc. and a former executive at onetime Internet
darling Excite Inc. He says he has recently battled Google for
Google executives say their efforts to snare top programmers,
engineers and other technology experts are not unique. "We're
working hard to get [talent], but other companies across
Silicon Valley are doing that as well," says Arnnon Geshuri,
Google's staffing director.
Indeed, competition for high-tech employees appears to be
rising across the board as demand for high-tech products has
recovered. The number of job postings on Dice.com, a
tech-employment site, more than doubled to 77,600 since
October 2003. Average salaries for tech consultants are up
6.2% in the first six months of 2005 to $87,100, the company
Microsoft acknowledges trying to hire some employees from
Google and snagged the head of Yahoo Inc.'s research labs
earlier this year. Yahoo has aggressively beefed up its
research staff with high-profile hires from Amazon.com Inc.
and International Business Machines Corp., among others.
Google hired away Microsoft's Mr. Lee in July by offering the
speech-recognition expert a pay package valued at some $10
million over four years, according to documents in a court
case over the matter. Microsoft Chief Executive Steve Ballmer
tried to hold on to Mr. Lee by offering him a new job and
higher pay, according to Mr. Lee's sworn declarations in the
case. When Mr. Lee said he planned to leave anyway, Chairman
Bill Gates told him to expect a lawsuit. "We need to do this
to stop Google," said Mr. Gates, according to the
The result is a legal battle reminiscent of the recruiting
wars of the late 1990s. Microsoft filed suit against Mr. Lee
and Google in July in Washington State Superior Court in King
County, alleging that Mr. Lee violated a noncompete agreement
when he defected to Google. Google and Mr. Lee have disputed
the claim. The case is scheduled for trial in January.
Google's typical hiring process is regarded as one of the
industry's most grueling and extensive. Candidates are often
subjected to weeks of interviews, with hiring decisions often
made by large committees of executives.
"Google is super active and they're one of the most visible
companies" on campus, says Jitendra Malik, a computer-science
professor at the University of California at Berkeley. Google
held 179 interviews with UC Berkeley's electrical-engineering
and computer-science students this fall, up from just 10 job
interviews in the same period a year ago, says the university.
UC Berkeley says demand from other tech companies hasn't
increased as much over the past year.
Google's Mr. Eustace maintains that the salaries it offers for
top talent are generally on par with its competitors, or
slightly lower. But the offers are often accompanied by hefty
grants of restricted stock known as "Google Stock Units."
Unlike stock options, which can become worthless if a stock
falls below a certain price, restricted stock usually retains
value. If employees stay long enough for shares to vest, they
receive actual Google shares.
Google began offering restricted stock to all new hires
earlier this year. In a recent regulatory filing, it said it
had 498,000 such shares outstanding, with a current total
market value of around $200 million. According to some Google
rivals, if Google discovers that a top job candidate has
competing offers, it sometimes doubles its restricted stock
offer. Mr. Eustace says Google has engaged in heated
competition in only "a tiny fraction" of recruiting situations
and generally makes offers in the same range as rival tech
To compete against its larger rivals, Google beefed up its
recruiting effort, retaining veterans like Shally Steckerl, a
contract recruiter who runs a consulting firm called
JobMachine, and Eric Jaquith, a free-lance recruiter who runs
Recruiting Choices. Both began working as in-house consultants
for Google in September 2004, when the company had more than
80 full-time and contract recruiters in-house, says Mr.
Messrs. Steckerl and Jaquith say they were instructed to
diversify Google's engineering pool by hiring more female
engineers. They called their team "Zion," after the
underground city of humans in "The Matrix" movies. Mr. Jaquith
says he was assigned to track down all women from the top 50
universities world-wide who had graduated after 1980 with
Ph.D.s or master's degrees in physics, math or computer
science. By last December, the end of his stint at Google, he
had made thousands of phone calls to female engineers, he
Jim Stroud, a contract recruiter involved in the effort
between December 2004 and June, says he unearthed several
hundred names of female engineers. He estimates that fewer
than 10 of those were hired during his tenure. Google's
job-interview process is "like a Senate committee hearing,"
says Mr. Stroud. "You have to get approved by 14 people at
least before you get hired."
Mr. Steckerl says the Zion group hired more than 45 engineers
during the last quarter of 2004, and increased the total to
more than 100 in the first quarter of 2005. Google declines to
comment on Messrs. Steckerl, Stroud and Jaquith or the
percentage of engineers who are female. Google says it doesn't
have 300 recruiters, but declined to elaborate.
'They Went After Us'
Other tech companies have made runs at Google employees. Mr.
Steckerl says Microsoft approached him earlier this year. In
April, he joined Microsoft as a full-time employee. Within
weeks, he says, Microsoft had hired away three other Google
contract recruiters from the Zion team, including Mr. Stroud.
"They knew who they wanted and they went after us," says Mr.
Abilio Gonzales, Microsoft's general manager of staffing, says
the software maker has stepped up recruiting in the past year,
telling prospective hires that it works on a wider array of
technologies than Google. He says Microsoft's staffing
department has grown to 355, up 15% from a year ago.
Yahoo has also expanded its recruiting team. Its executive
committee discussed Google's hiring push at meetings earlier
this year, says Usama Fayyad, Yahoo's chief data officer. "We
believe the [compensation] levels they are willing to go to
are unreasonable," says Mr. Fayyad. "It has gotten nuts over
the last six months."
Nevertheless, Prabhakar Raghavan, Yahoo's head of research,
contends Yahoo has won a majority of the head-to-head hiring
battles against Google that he has been involved with. But he
says it may become harder to compete if Google continues with
what he contends are inflated compensation packages. Earlier
this year, he says, Google offered one job candidate much more
money than Yahoo was willing to pay. When the engineer decided
to join Yahoo anyway, Google doubled the amount of stock it
was offering, to no avail, he says.
Mr. Raghavan, who says he was wooed by Google and Microsoft
before joining Yahoo in July, argues that such "irrational"
offers are bad for the tech industry because they distort
compensation expectations and sow resentment among lower-paid
Allan Brown, Google's director of recognition and
human-resources systems, disputes that the company is bidding
too aggressively for talent. He estimates that Google wins
only about half of its hiring showdowns with Yahoo. He says
Yahoo also engages in bidding wars, and that Google would
consider doubling a restricted stock offer only if there was a
strong argument for doing so. Mr. Eustace adds that Google
sometimes offers compensation of up to about 15% more than
other tech companies, but generally stays within the same
range as its rivals.
EBay spokesman Hani Durzy says the San Jose, Calif., Internet
auctioneer has lost 10 to 20 technologists to Google since the
start of the year. But Mr. Durzy says eBay hired 1,300 people
during that period, including 800 technologists.
Google may need to assemble an engineering brain trust to
hedge against a potential talent drain. With its stock closing
yesterday at $416.47 a share, many of its earliest employees
have become multimillionaires. At other successful tech
companies such as Microsoft, some wealthy veterans have
retired young. Earlier this year, a Google vice president of
engineering, Wayne Rosing, retired to pursue his passion for
astronomy. Google says there is no mass exodus and that its
annualized attrition rate is in the low single-digits, below
average for a tech firm.
The industry is watching closely the legal dispute over
Google's hiring of Mr. Lee from Microsoft, which sheds light
on how Google courts top talent. In an email disclosed in the
litigation, Mr. Eustace wrote that he "pursued [Mr. Lee] very
hard because he has incredible hiring ability," which might
help "shake a few more people loose."
Google Vice President Jonathan Rosenberg wrote in an email to
colleagues: "I all but insist that we pull out all the stops
and close him like wolves."
Write to Pui-Wing Tam at email@example.com and Kevin J.
Delaney at firstname.lastname@example.org
Copyright 2005 Dow Jones & Company, Inc
*** FAIR USE NOTICE. This message contains copyrighted material whose use
has not been specifically authorized by the copyright owner. The
'johnmacsgroup' Internet discussion group is making it available without
profit to group members who have expressed a prior interest in receiving
the included information in their efforts to advance the understanding of
literary, educational, political, and economic issues, for non-profit
research and educational purposes only. I believe that this constitutes a
'fair use' of the copyrighted material as provided for in section 107 of
the U.S. Copyright Law. If you wish to use this copyrighted material for
purposes of your own that go beyond 'fair use,' you must obtain permission
from the copyright owner.
For more information go to:
"When you come to the fork in the road, take it" - L.P. Berra
"Always make new mistakes" -- Esther Dyson
"Any sufficiently advanced technology is indistinguishable from magic"
-- Sir Arthur C. Clarke
"You Gotta Believe" - Frank "Tug" McGraw (1944 - 2004 RIP)
"We do not have to change because staying in business is not compulsory"
-- W. Edwards Deming (1900 - 1993)
John F. McMullen
email@example.com firstname.lastname@example.org email@example.com
johnmac@panix firstname.lastname@example.org email@example.com
firstname.lastname@example.org email@example.com firstname.lastname@example.org
ICQ: 4368412 Skype, AIM, Yahoo Messenger & Google Talk: johnmac13
------------------------ Yahoo! Groups Sponsor --------------------~-->
Fair play? Video games influencing politics. Click and talk back!
This archive was generated by hypermail 2b30 : Tue Jun 09 2009 - 05:00:12 EDT