Google Cost Cuts Take The Company Away From Its Engineers (GOOG)
For example, remember Google's 20% rule? The one that allowed engineers to spend a fifth of their time on any project of their choosing?
Google CEO Eric Schmidt's not even pretending its real anymore. Here's the money quote from the Wall Street Journal's rehash of Google's cost cutting campaign:
"We have to behave as though we don't know" what's going to happen, says Google Chief Executive Eric Schmidt. The company will curtail the "dark matter," he says, projects that "haven't really caught on" and "aren't really that exciting." He says the company is "not going to give" an engineer 20 people to work with on certain experimental projects anymore. "When the cycle comes back," he says, "we will be able to fund his brilliant vision."
Google's (GOOG) finally getting smart about allocating human resources and capital. Here's what that means in the short term:
- A sense of urgency about diversifying the business, which means new priorities include display ads, mobile ads and enterprise software.
- Non-revenue generating products will starve if they're not killed altogether. Project the company is just "fiddling with," Schmidt told the WSJ will get "will get "naturally smaller as people get plucked off."
- Reigning confusion. One Google current operations manager told the Journal: "It's not exactly clear where that bottom line is now. I don't think they know that either."
- Dispirited engineers. Google no longer belongs to the dreamy engineers and it's going to make them feel bad. Quoth the Journal: "Some engineers complain they can no longer tap the employees and machines they need to develop their ideas. This is no small issue among elite programmers, many of whom joined the company for the chance to work on such projects, according to current and former employees."
- Cramped quarters. Google will close offices in Dallas and Denver.
- Shutting off services. Search sandbox SearchMash, virtual world Lively and Google Page Creator will soon be gone. Google Audio Indexing and Google Notebook could follow.
- More grunt work. Google wants to "significantly" cut its 10,000 its contractor workforce and somebody has to pick up the slack.
See Also:
Analyst: Google Revenues Will Shrink Through 2010 (GOOG)
Photo: heartbeaz
Hey, what about that name anyway. “Google” sounds like some name a child invented.
It might be cute to some but in hard times it might seem just silly.
Now that random creativity is going to have to be directed in ways that suits think is "useful", so I'm predicting that Google's home page will soon become the kind of needlessly complex collection of random junk that you see at Yahoo or MSN, with the search box hidden away in a corner someplace.
The short-term revenue they get from selling ads on their home page (can you imagine the prices!) will result in losing their search leadership in five years time to a company that doesn't even exist yet.
Most of what you point to as evidence of Google's apocalyptic implosion has been going on in one form or another even though it's heydays. Google is constantly starting up and shutting down projects, products, offices, data centers, etc... It's just part of how it has always done business. Let people try something. If it works, great. If not, kill it off and move people to a different project. Also, the dark matter that Eric is referring to is stuff projects. It has nothing to do with 20% time.
It wouldn't surprise me at all if 6 months from now they are doing the exact same thing and you are painting an equivalently jubilant article on how they manage to preserve a culture of fun and innovation in trying times.
1) i'll bet the farm they never place banners on their home page. EVER.
2) if you can keep accountants on project 70% of the time, you are doing well.
3) this article is about ACCOUNTABILITY. it's shrewd to not pursue hundreds of unrelated, unproductive, and often idiotic projects.
Time for austerity in all ventures these days.
I had no idea accountants were such slackers. I'm looking forward to hearing tales of companies leaning on them: "Get to work! This isn't university you know! Crunch those numbers HARD if you want to see your paycheque!"
Humour aside, accountability comes with costs. Some of the least productive development organizations I've ever had the misfortune to be associated with have had the most stringent micro-accounting of development time, and some of the most productive allowed developers the freedom to do what was necessary to move the product forward, particularly things like spending time on non-development activities such as process improvements, or non-feature-related activities like refactoring.
Maintaining overall product focus is certainly a good thing, but there are a range of ways of doing that, and suits almost never pick the right ones, tending toward micro-accountability that reflects their distrust of developers and their ignorance of the well-documented, empirically proven features of productive development cultures.
Many of perma-temps did quite well from the lawsuit (and conversely, it also resulted in very drastic cuts in the use of temps at Microsoft - basically it was "hire them as full-time or find a way to do without").
The WSJ article mentions that Eric Schmidt says something about the fact that his organization will be more reluctant to alloate big groups of people to work on someone's experimental project. This does not mean that engineers will not have 20% of their time to work on their own ideas. It means that it is less likely that 20 people other than the person with the idea will be allocated to work full time on it.
Even before the current economic environment allocation of resources on intrapreneurial ideas inside Google was not that easy. And this is one of the major reasons why the dodgeball crew left the company not long after being acquired.
David
Because Bell Labs is no longer Bell Labs and while Microsoft and IBM had aspirations to be more research oriented, few companies are supporting the pure research necessary to drive innovation in the coming years.
Much of Bell Labs' success came out of its multidisciplinary approach. Fertilization of concepts across academic specialities resulted in entirely new technologies. If was even vaguely related to something that telecom might benefit, it was fair game.
Google should be taking a similar approach to all things that relate to driving the Internet deeper into the world (thus broadening their customer base - think public Wi-Fi, Android, White Spaces efforts) or improve Google's delivery of services (thus data center redesigns, energy efficiency efforts, pure research in massive parallelism, machine natural language translation, and even a focus on renewable energy and a Smart Grid for the electrical grid).
Google doesn't have to monetize most of the 20% efforts. They just need some set of the efforts to actually increase their customer base or their own internal efficiency.
reinharden
PS: Lots of folks in the US think Orkut, for example, is something of a failure. On the other hand, there's reportedly something like 120+ million users. 50% of whom are in Brazil and 60% of whom are 18 - 25. Most companies would love to fail on that scale with those demographics. ;-)
Bob
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Please send articles to a member of my staff before posting them. Or at least read them twice and fix some of your more obvious errors.
- The Editor
- Editor 2
It has either moved overseas or pushed back into the political arena of academia and the fed gov't.
Newton was not a corporate researcher, nor was Einstein, nor Galileo, and most of the famous scientists. They were independent researches, which is pretty much non-existent nowadays. Ironic it is... Researchers are either corporate MBA wonks, gov't policy lobbyists, or academic patent hoarders in the current environment.
Google's 20% time was a HR stunt. And it worked for Google when investors were throwing money at it like water. Nowadays, 20% really is a myth. Unless you can 'sell' your idea or have the right connections within Google management, yes, you'll get your 20% time. But guess what, that's typical in nearly all corporate R&D environments--and not a lot of projects get approved, and some getting the shaft as the ad market worsens.
Need I remind you all that one of the most used items was invented as an accident (read - not with the intent of making gads of money)...
... the Post-It note.