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Management Report

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Google vs. Facebook : Competing for Talent

Google vs. Facebook : Competing for Talent

KIM Jae-Won

Feb. 18, 2011

Transcript

Welcome to our video program. I’m Jae-Won Kim from the human resources department.

Rivalry between Google, the Internet’s king of search, and Facebook, the world’s dominant social network, is slowly coalescing into reality. Although Facebook’s revenue and employee count are still only a tenth that of Google, it now boasts over 500 million members, and in 2010, surpassed Google in site visits and time spent. Competition between these two firms has grown because they now do business in overlapping areas: social network services, e-mail, search engines, and mobile communications.

Let's look at some of the major figures who have moved from Google to Facebook. Sheryl Sandberg was Vice President of Global Online Sales and Operations at Google and contributed greatly to the success of the company. She then took the job of Chief Operating Officer at Facebook in 2008. Her successor at Google, David Fischer, also moved to Facebook as Vice President of Advertising and Global Operations.

It’s not only top management that has jumped ship. Many staff who were previously developing Google’s core technologies like Google AdSense, Android, Chrome OS, Google Map, and Google Wave have also dumped Google for Facebook. It is not hard to imagine how Google reacted in such an emergency situation. To prevent any further defections, Google gave all its employees a large salary increase and bonuses in November of last year.

Then the question arises: What is so compelling about Facebook that it can attract employees from Google, widely considered the world’s dream company?

First, Facebook boasts an organizational culture that encourages creativity and autonomy; which, in fact, counted as one of Google’s strengths in its early days. Google’s “20% Rule” which allows an employee to spend 20% of their work time doing something of their own choosing was unique to the company.

Now, however, complaints have grown that engineers spend more time improving existing products than working on new products, while being subject to micro- management. Such complaints were confirmed by several interviews of Facebook staff who had left Google. They claimed that “Google’s gotten to be a lot bigger and slower- moving of a company,” or that “Google has become more of a safe work place than a hot one.”

As Google grew in size, it faced increasing problems like bureaucracy.

In contrast, Facebook made sure that their core talent, content developers, could really enjoy autonomy and be creative. Suppose there is a new project. The engineer who develops a product gets to determine its duration, schedule, and type. Facebook also encourages employees to leverage their creativity through an idea suggesting program.

At Facebook’s center are “Hackathons.” Any employee who comes up with an interesting idea can propose a Hackathon. Employees then gather to have discussions and build projects. CEO Mark Zuckerberg also often attends to share ideas with employees. Hackathons have been successful in creating new ideas and major Facebook features like the News Feed and iPhoto exporter.

Second, Facebook provides high compensation and many opportunities

The prospect of vast riches, of course, has always been Facebook’s surest ticket to attracting talent, and Facebook’s corporate value is astonishingly high. According to an estimate by Goldman Sachs as of January 2011, the company’s value is $50 billion. This is well above two listed Internet giants, Ebay’s US$37.4 billion and Yahoo’s US$21.8 billion.

Facebook is the first unlisted online business to be valued at this level. As Facebook plans to go public soon, employees who receive stock options can expect massive profits. In addition to these financial rewards, Facebook’s non-financial rewards also motivate employees, including realizing one’s growth potential, and gaining recognition at work. In particular, those who were dissatisfied by their career development and promotion at Google have had new opportunities to achieve at Facebook.

Lastly, Facebook has a star founder who also serves as a role model and the source of the company’s vision.

In 2010, Fortune magazine named Mark Zuckerberg the best founder in the IT industry, and Time magazine named him person of the year. Indeed, he is a role model for many people, and his vision for the growth of his company is enough to attract substantial talent.

Lars Rasmussen, who led the invention of Google Maps and Google Wave, said he decided to move to Facebook after meeting Zuckerberg and listening to his future business vision.

We have looked at how Facebook was able to lure so much talent from Google. Truth be told, the three major strengths I’ve mentioned for Facebook are identical to the ones Google enjoyed for a decade. Although Google remains one of the best and most popular places to work, its loss of human capital to Facebook gives us food for thought. Just as Google faces challenges from emerging companies, Facebook is sure to face the same fate once another new star arrives on the horizon.

Now, turnover takes place at a faster pace than ever before as better people seek better companies. The days are long gone when a company can expect its employees to stay for life and be loyal to the company. That is why companies need to be alert about bureaucracy so that employees can realize their full potential. Companies also need to make continuous efforts to maintain dynamism. They must also keep in mind that innovation, creativity, and the CEO’s entrepreneurship is key to attracting talented workers.

To help Google, its founder Larry Page came back to management. He also announced that he would make Google a giant which has a startup’s passion, spirit and speed.

“I wanted to do a search on immortality.” This is Google’s early corporate motto. Can the Internet giant overcome bureaucracy and become an immortal company?

Thank you for watching. I’m Jae-Won Kim.

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