by Jessica E. Vascellaro
Google Inc. is revamping how it develops and
prioritizes new products, giving employees a
pipeline to the company's top brass amid worries
about losing its best people and promising ideas
The Mountain Vies, Calif., company famously
lets its engineers spend one day a week on proj-
ects that aren't part of their jobs. But Google has
lacked a formal process for senior executives to
review those efforts, and some ideas have lan-
guished. Others have slipped away when employ-
ees left the company.
"We were concerned that some of the biggest
ideas were getting squashed," said Google Chief
Executive Eric Schmidt in an interview.
Google can no longer afford to let promising
ideas fall by the wayside. The Internet search gi-
ant's once-torrid growth has slowed. At the same
time, it faces fresh competition from Microsoft
Corp.'s new search engine, Bing, and start-ups
such as Twitter Inc., which was founded by for-
mer Google employees.
In response, Google has recently started inter-
nal "innovation reviews," formal meetings where
executives present product ideas bubbling up
through their divisions to Mr. Schmidt, Google
founders Larry Page and Sergey Brin, and other
The meetings are designed to "force manage-
ment to focus" on promising ideas at an early
stage, Mr. Schmidt said.
The efforts have been behind several ser-
vices that Google has recently unveiled, including
software that allows companies to use Micro-
soft's Outlook email and calendar software while
storing their data with Google. Microsoft said
Wednesday the Google software interferes with
an Outlook search function; Google disputed the
severity of the problem, but said it is working to
improve its software.
Another project, an imaging product that is
based on facial-recognition software developed
inside Google, is expected to be released this sum-
Google has also begun to give a few engineers
broad leeway to start big projects of their choos-
ing, Mr. Schmidt said. One result of this ef-
fort: Google Wave, a collaboration tool that the
company previewed last month.
The moves are a shift for Google. Previously,
its early-stage projects weren't systematically vet-
ted by top executives. Employees with a new idea
would lobby their bosses for resources and time.
Once approved, a project could linger or die without
getting much attention from senior management.
Google needs new products to jumpstart its
growth. While it remains a juggernaut with one-
third of all U.S. advertising dollars spend online, its
year-over-year revenue growth has slowed from
56% in 2007 to 315 in 2008 and was just 6% in the
first quarter of this year.
What's more, employees continue to leave Google
as it evolves into a mature company with 20,000
workers. "Most products managers evaluate [wheth-
er to stay] every six months," said Chris Vander
Mey, a senior Google product manager who worked
on the Microsoft Office integration.
While praising how Google has supported small
projects like his own, he said he still expects to leave
the company over time to explore other interests.
Google has taken cracks in the past at the reten-
tion problem. In March, it repriced million of em-
ployee stock options whose value had been wiped
out as Google's share price has fallen over the past
two years. The company has also begun testing a
mathematical formula to try to predict which em-
ployees are most likely to leave, based on factors like
David Yoffie, a Harvard Business School profes-
sor who studies technology and e-commerce com-
panies, said prioritizing is important for Google.
While Google has launched hordes of new experi-
ments, "in the absence of focus and promotion" few
have turned into blockbusters, he said.
In the case of Google Wave, the company singled
out Lars Rasmussen and Jens Rasmussen to test its
approach to developing ideas.
The brothers, who are based in Australia, had
been working on Google Maps. On the side, they
were also thinking about creating a new communi-
cation system to replace email.
Messrs. Schmidt, Page and Brin where intrigued
and gave the engineers a long leash. "We said go
do something really interesting and take as many
resources as you need," Mr. Schmidt said. Then
gave the Rasmussens dozens of employees, he add-
ed, substantially more people than most early-stage
To allow the due to stick to their vision for the
product, the top executives kept Wave secret from
the rest of the company. Wave wasn't opened up to
broader employee feedback until later in the devel-
Lars Rasmussen said the conditions freed his
team from concerns such as fighting for engineers
and removed pressure to integrate with other
Google producsts. "We knew we had to do something
different," he said.
- Jun 22 Mon 2009 14:41
by Jessica E. Vascellaro