If Google wants a peek at its future, think of Microsoft

Why believe Schmidt can succeed where Gates couldn't?

(Credit: CNET)

No doubt it was a platinum opportunity, one that Sheryl Sandberg could not turn down. But the departure of a highly regarded Googler to become Facebook's chief operating officer is more than just another Silicon Valley tale of lighting out for greener pastures.

Sandberg may be the headliner, but about one third of the company's first 500 employees have already left Google. Meanwhile you've got roughly 2,000 people who are pre-IPO veterans now waiting out the clock before their shares vest. I don't care how delish you find the free food in the corporate cafeteria. There's potential here for major employee churn on the horizon.

"Google's about to become the story," says a senior industry executive familiar with both companies. Just as Microsoft went through a period of churn, this person believes Google's turn is next. "A lot of people over there have way more money than know what to do with" thanks to stock options cashed in over the years.

In that sense, Sandberg's exit fits into a familiar narrative. Every big successful technology company reaches a juncture where the loyalty of the rank-and-file wavers. The "let's burn the midnight oil" exhortations only work for so long before the hired help start to wonder about making a fresh start elsewhere.

"This is what happens where people with a lot of ambition decide that it makes no sense staying around any longer," a former Microsoft exec told me. "It's nothing extraordinary but it becomes a management challenge. They're already wealthy. How do you keep them fired up when the basic corporate rules of the road have already been decided?"

Microsoft lost employees to start-ups during the go-go days of the 1990s and Bill Gates and Steve Ballmer were not able to do much to stem the defections. The irony is that the subsequent economic recession turned out to be Microsoft's best weapon for retaining its people. Why throw the dice when you've got a sure job with a steady paycheck?

Back to Google. The company's enjoyed an incredible run. But with the wilting of the company's shares, toughing it out for the duration suddenly sounds a lot less appealing. With all due respect to Google's ruling troika, "Do no evil" is not poetic enough to set many hearts aflame. Not with sundry headhunters banging on the door because they believe you're so much smarter than the average bear.

[coryschulz]

I believe Google would handle a similar situation more gracefully. I can see why people would want to leave Microsoft, but Google is different and is a pretty nice overall package. I think people will always want to work for Google and they will continue to attract creative minds.

[tyman703]

@ Cory<br /><br />"I can see why people would want to leave Microsoft, but Google is different ..."<br /><br />Apparently you don't remember the Microsoft of the mid 90's. I believe "Unstopable Tech Behemoth" would've been an appropriate descriptive phrase.<br /><br />The average man off the street in 1996-7 might've sold his life away if only he had come up with the idea of Microsoft. The same song might be heard on today's streets, only with Google as the subject.<br /><br />So, before cries of epic loyalty are made on Google's behalf, let's not forget they travel the same road as Microsoft once did. And although they may have a different platform (Internet) to work with, the road still leads to the same place.<br /><br />With that, Cory, I'm personally holding you accountable in 10 years when Google turns into the bloated corporation, and a hot young start-up comes along to change the world and take your "loyalty" away.<br /><br />-Tyler

[charlie cooper]

Good institutional memory, Cory. Back in 1996-97, folks were saying about Microsoft about the same they now say about Google: Unstoppable, brilliant, cutthroat, etc. But if history teaches anything, it's that all glory is fleeting....<br /><br />cheers

[AbuLafya]

The fact of the matter is that Google is a different company than others in the valley.<br />The hordes of smart people working there have great incentives to stay withing the company to develop their bright new idea, because of the nurturing environment found in Google. While this does not mean all will stay, it does mean more will stay as compared to other companies.<br />Great differences are "do no evil" motto, many of the Engineers working there believe in (as oppose to the media) as well as the open-source support, make the world a better place and philanthropic side of Google at www.google.org. These are the things young passionate Engineers have close to their hearts.<br />I don't understand at all the need to compare monopolistic company with questionable anti-competitive business tactics to Google.

[microsoft slayer]

microsoft got dumb people who don't know what they're doing!

[NoReligion]

Your statement, Sir, takes the prize for most cognitively challenged ever. Congratulations!

[stuxstu]

Yep Microsoft is filled with idiots... a 90% market share of the desktop PC, absolute dominance over Office/Enterprise application , 30 market share in internet search, 70% share for IE and Google is worried about those idiots over in Redmond. <br /><br />Thank you for your brilliant analysis of the tech world...

[AppleSuxLeo]

Goog`s leaders will have to give up a few 747`s...and forget about the moon-shot. They better be more afraid of competition from a combined MSFT/YAHOO ;)

[jackdaniels08]

Obviously Charles Cooper, the author of this article is pro Microsoft, anti Google. He says "The irony is that the subsequent economic recession turned out to be Microsoft's best weapon for retaining its people. Why throw the dice when you've got a sure job with a steady paycheck?" How come he did not apply the same comment and logic to Google as well. He saying that people are leaving Google because they want to find the next exciting thing. Well people are also leaving Microsoft to find the next exciting thing as well. Amazing how he thinks he can get away with a double standard logic talk, much like the way Microsoft has been the pot calling the kettle black with the DoubleClick/Google deal.