At 10-year mark, Google's glossy facade shows cracks

Now that Google has reached its 10-year-mark, the company is facing the cultural complexities and challenges that come with the transition from hip startup to corporate giant.

In the early days of Google, the company was able to take Silicon Valley by storm because it was a tiny company with a big idea. Unencumbered by the corporate bureaucracy of larger companies like Microsoft, Google was able to build grassroots support around its search engine and online advertising business model to grow quickly and nimbly into the multibillion-dollar company it is today.

However, with that kind of fast growth and mega-success comes a down side. The excitement of Google's game-changing technology and the collegiate culture that the company founders fostered at corporate headquarters in Mountain View, California, made the company for many years the hot place to work. But in the past year, the image of the Silicon Valley nirvana Google has created has begun to show some cracks, with key members of the brain trust leaving for other companies and stories of employee dissatisfaction with the corporate culture beginning to travel up and down the valley.

As it turns 10, one of Google's main challenges is to continue to foster technology innovation and draw the caliber of talent that startups can attract even as the company, in both size and culture, begins to look more like a Microsoft or an IBM -- behemoths over which Google once had an edge because it was different.

"Gravity affects all organizations and will inevitably affect Google," said Charles O'Reilly, Frank E. Buck professor of management at Stanford University's Graduate School of Business. "The question is whether they will deal with this in a productive way, or do something foolish."

A little more than a year ago, Google began to experience the brain drain that comes when a startup becomes a corporation and many of the early intelligentsia cash out and go on to bigger and better things -- or leave to start their own ventures.

Key Googlers such as former Chief Information Officer Doug Merrill and former Vice President of Global Online Sales & Operations Sheryl Sandberg left the company in the last year -- the latter for Facebook, where other key Google employees also defected.

Then there was the child-care fiasco that made Google's executives question the sense of entitlement the company had created among employees, and how long they could sustain it. At a TGIF (thank God it's Friday) meeting -- a weekly forum where Google's leaders meet with employees in a question-and-answer session to address any concerns or thoughts they have about the company -- employees expressed concern that the costs of company-provided child care were going to nearly double. In response, according to published reports, Google co-founder and co-President Sergey Brin bristled about employees feeling a little too entitled to perks like bottled water and candy, which the company gives out for free.

The meeting left some at the company thinking that their executives were beginning to feel the pressures about the culture they created, insiders said privately.

The IDG News Service is a Network World affiliate.