Google has a (big) people problem

The new Google risk: Googlers

UPDATE: I heard Google CEO Eric Schmidt last week at the Personal Democracy Forum tout the superiority of his merry band of "rocket scientist" Googlers once again.

BUT, is that really a good thing? Last month (see my "Google Risk" story below) I underscored the new risk Google faces in retaining its super-duper human capital.

Robert Cringely concurrs with my thesis in a piece this week.

Moreover, Google is hard-pressed to satisfy the net growth in staffing it needs to fuel the "blizzard" of product development it seeks, as its top engineer, Alan Eustace, acknowledged yesterday:

We have very big potential revenue opportunities that we're not able to execute on because we just plain don't have the people to do it.


APRIL 5, 2007: As Google Inc. closes in on the ten year anniversary of its founding, top Googlers are finding they may be able to parlay their Google resume into greater fame and/or fortune, outside of the Googleplex.

“We are in a wonderful situation that we are able to now in fact increase the standards by which we select and hire new people into the company,” so touted Google CEO Eric Schmidt at the 2Q 2006 earnings call:

Currently we've raised the hiring bar. Even with that, we've been able to continue our expansion in headcount, especially internationally and outside the United States.

But what about inside the United States? Google’s staffing concerns do not just concern staffing up anymore.

Google is maturing in age and with that comes a new business risk: defections by key staff.

(After all, it’s no fun watching GOOG on the way down, even thought there always is the free lunch!)

Not only are top tier Google execs leaving the Googleplex, they are leaving with a seeming ability to profit off of their insider Google knowledge, regardless of any potentially negative impact on Google’s business model objectives.

Recent examples:

Patrick Keane left his has position of Head of Advertising Sales Strategy at Google to move to CBS Interactive, as Executive Vice President, Chief Marketing Officer, responsible for helping CBS “monetize new inventory generated by next-generation platforms,” such as Google’s YouTube.

(see “Google, CBS drama takes new video turn”)

Adam Goldberg started the first Google inside sales team in 2003 and helped build it to a $500 million dollar a year organization. Goldberg left his position at Google to found his own company, ClearSaleing, dedicated to offering “desperately needed technology and processes to address limitations and client frustrations” regarding search engine marketing programs, such as Google AdWords.

(see “Google clients ‘frustrated’ by unprofitable AdWords buys”)

Google famously has prospective new hires “sign pretty hefty NDAs, non-disclosure agreements” before interviewing.

But is it fully protected on the non-compete front when full-fledged Googlers go elsewhere to seek greater ROI from their personal investments in Google?

In its required SEC reporting of risk factors impacting its business, Google states:

Competition in our industry for qualified employees is intense, and we are aware that certain of our competitors have directly targeted our employees.

If we are unable to retain or motivate key personnel, we may not be able to grow effectively.

Google also warns:

The historical rise in our stock price has created disparities in wealth among Google employees, which may adversely impact relations among employees and our corporate culture in general.

SEE: Why Google CEO is ‘harmless’