Google loses the dream, falls off the wave

commentary The departure of high-profile and long-serving senior managers Kate Vale and Lars Rasmussen from Google Australia this month signifies the end of a dream where a truly innovative technology company could escape the perils of bureaucracy and its accompanying stasis.

(Credit: Google)

Hunter S. Thompson wrote in the novel Fear and Loathing in Las Vegas that the 1960s in San Francisco was a very special time and place to be.

"There was a fantastic sense that whatever we were doing was right ... that we were winning," he wrote. "That sense of inevitable victory over the forces of Old and Evil. Not in any mean of military sense; we didn't need that. Our energy would simply prevail."

This is the sort of feeling you got when you walked around the offices of Google Australia in Pyrmont in the middle of this decade. There was an energy about the company. Flush with commercial and technical success from its main search product, and brandishing acclaimed new entries into the Googleverse like Gmail, Google Apps and YouTube, it seemed Google could do no wrong.

The search giant's flat structure and focus on technical prowess at all costs, and its extremely flexible staffing arrangements and reward structure — including the famous "20 per cent time" — meant that Australia's best and brightest were clamouring to get in the door.

But, as with that glorious era in San Francisco, all good things must come to an end. And so the term "Xoogler" was born.

"We had all the momentum; we were riding the crest of a high and beautiful wave," wrote Thompson in his book. "So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high-water mark — that place where the wave finally broke and rolled back."

The departures of Vale and Rasmussen from Google Australia's ranks are one small part of that wave rolling back inside Google, the company that comes very close to being a corporate utopia and failed.

To understand this statement, we need to examine the pair's personal histories within Google and what could have forced them to leave.

Vale could most easily be described as the soul of the search giant's Australian operation. When Google entered Australia in 2002, it was Vale that was the company's first employee, and it's not hard to see why. The executive's combination of commercial acumen, online knowledge (she was formerly the NSW sales manager for dotcom failure Looksmart) and her bright bubbly personality made her the perfect choice to launch what was essentially a start-up operation in Australia and build it from the ground up.

And build she did. Although Google has not disclosed its Australian revenues, they are rumoured to be close to $1 billion. And Vale was the one that laid the commercial foundations for that extraordinary growth over the past decade, step by painful step, in an era where search engine optimisation was a black art and targeted advertising meant advertising beauty products to housewives on daytime TV.

Vale was the executive who brought the new era of internet advertising to Australia, creating a whole eco-system around Google in the process.

When the time came for Google to appoint more senior leadership in the form of Asia-Pacific chief Richard Kimber in 2006 and then local managing director Karim Temsamani in 2007, Vale stepped back a bit from the helm of the company, eventually taking a more lightweight role as the local head of Google's bright and shiny new video toy YouTube.

As she did with Google Australia as a whole, Vale appears to have achieved remarkable success with the introduction of YouTube into the local commercial advertising and publishing market. When she first took on the role, the site had poor advertising integration with the Australian population. It's now common to see Australian pre-roll advertisements on the site. Vale can't take all the credit for that shift, but she can take some.

The departure of Rasmussen is also significant for the company.

The fact that the engineer was recruited personally by Facebook chief executive Mark Zuckerberg should give onlookers some indication of the respect with which Rasmussen is held in the global Web 2.0 scene.

The driving force behind Google Maps, Rasmussen was the public face of the search giant's Australian engineering operation since his company was acquired by Google in 2004. And, like Vale, Rasmussen has been instrumental in growing Google in Australia. He has persuaded the company's chiefs in Mountain View to invest in Australian engineers and hiring technical talent, particularly in Sydney, in droves.

Like Vale, Rasmussen stepped back from that role a little in 2007, when Google appointed serial entrepreneur Alan Noble as the head of its engineering operations locally.

And, again, like his colleague, Rasmussen appears to have stepped back from higher level management duties to get his hands dirty. He was one of the chief driving forces behind Google's next-generation Wave product, which eventually failed: a fate he does not appear to be too happy about. However, the development of Wave still brought significant prestige to Australia because of Rasmussen's efforts.

Ultimately, if you were speaking to Google in Australia for most of the past decade, it meant you were speaking to either Vale or Rasmussen. It was common for the pair to attend press conferences together — Vale to present for the commercial side of the business, and Rasmussen to explain the expansion of the company's local engineering talent and products.

The Sydney Morning Herald is using a photo this week which perfectly illustrates the dynamic between the two. They are standing in what appears to be the kitchen of Google's Darling Harbour HQ, or maybe the Pyrmont office. They are laughing, Vale's stance open, Rasmussen more reserved, as many technical people are. There is a link there that is only built up between colleagues who have worked, and fought, together for several years.

That link remains. In fact, Vale said she had dined with Rasmussen just last week. Their professional relationship appears to have epitomised the classic marriage between the technical and the commercial, which is so fruitful when it works well and so disastrous when it tears apart.

Restless souls like Vale and Rasmussen joined Google Australia to start with because it was a start-up. The company offered them something that few other companies could — the chance to make a difference. As Google grew larger and that potential shrunk, both found their niche in an attempt to keep that dream alive.

But their departures signal that they've both had enough.

In short, Google is no longer a start-up. It is now a company like any other, and one with a sizable headcount: more than 400 in Australia and 25,000 globally. It is struggling to get new products to market, or even to keep up-to-date with its existing product set. Look at the poor adoption of Google Apps in corporate Australia, for example (because of its lack of local hosting), or the delays pushing its netbook operating system, Chrome OS, into irrelevance.

Because of this fact, the company is no longer attractive to entrepreneurial change agent types like Vale and Rasmussen. There is simply too much management inertia.

This can be seen in the pair's comments to the Sydney Morning Herald. "The energy there is just amazing, whereas it can be very challenging to be working in a company the size of Google," Rasmussen said of Facebook.

"I think Google has become more corporate over the years," Vale said, noting small companies were easier to shape. "As a company grows it becomes harder to do that ... things get slow."

How far back the wave has rolled, indeed — those comments would have been unimaginable just half a decade ago.