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Is Google Draining or Retaining? Reports of an exodus of talent from the company have been greatly exaggerated.

By Chris Thompson
Posted Monday, June 2, 2008, at 12:27 PM ET
Google.

Based on coverage in the business-and-tech press, you are forgiven for thinking that all the best talent in the industry is jumping off the Good Ship Google. For the last two months, bloggers and business reporters have breathlessly cataloged the names of Google bigwigs who've left the company. Facebook, in particular, snatched up some of the search giant's most valuable names: head of global communications Elliot Schrage, vice president of global sales Sheryl Sandberg, and director of social media Ethan Beard. Whether appearing on Wired.com or the BBC or in Fortune magazine, the story was the same: Google has lost its Valley mojo, and as the company's growing bureaucracy stifles its smartest employees' creative impulses, a "brain drain" threatens to bleed it of the very talent that made it Google.

At first glance, David Friedberg perfectly epitomizes this trend. When he joined Google in 2003, he and three other people were charged with putting together the company's corporate-development team; eventually he would become the business-product manager for Adwords, the advertising function that nets billions in revenue. But over time, he began to notice that Google's early free-wheeling culture was disappearing under layers of bean counters and bureaucrats. Eventually, he left to start the weather-risk-management firm WeatherBill.

"Anyone who joined the company in the past four years has seen a project they could work on, and in three months launch it, and have it have a major impact on the business," Friedberg says. "You could have this creative chaos, and then see millions of people use it immediately and have enormous financial implications. You had the world's largest sandbox. … Because of the maturity of the company, it became harder and harder for me to do interesting things."

But what really strikes Friedberg is how few of his contemporaries have done the same thing. Despite all the buzz about Google's talent exodus, he says, the company has managed to hold onto a remarkable number of smart, impossibly rich employees—men and women who could spend the rest of their lives sipping margaritas but choose to stay at Google because it's still so damn fun. "Any company has an attrition rate, and I think Google's is lower than almost any other company," Friedberg says. "I know people who have been there for more than six years, are fully vested, and they're staying there because they're doing interesting things."

While there's no absolute yardstick for whether a company is retaining or draining talent, evidence suggests that Google is not leaking that badly. Veteran search-engine reporter Danny Sullivan recently tallied up the number of senior executives who have left Google and found that just six had departed in the last eight years. By contrast, Yahoo lost 17 senior executives in the first six months of 2007 alone.

Salman Ullah, who recently left his gig as Google's vice president of corporate development to found Merus Capital, agrees that the firm's smartest talent is mostly staying put. "Any company that has 20,000 employees, people are going to leave. That's just normal," Ullah says. "I spent three years there, and it's just an extraordinary talent pool they have accumulated. It's going to take many, many years before they regress to the mean and become just another company."

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Chris Thompson writes the Feeling Lucky blog, a feature on The Big Money, Slate's business site launching later this year.
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