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Ex-Googler Predicts Engineer Exodus After Bonuses

Published by: Kelly Curtis on 16th Jan 2015 | View all blogs by Kelly Curtis
Ex-Googler Predicts Engineer Exodus After Bonuses
 
A former Google employee posted a Tweet late Thursday indicating that “tons of engineers” would be moving on from the tech giant now that holiday bonuses have been handed out.  The tweet came from current Beeswax CEO Ari Paparo, a former Googler who left the tech giant to form his own start-up several years ago.  Of course, workers leaving larger firms for startups is nothing new, as each year typically brings a certain amount of just such an exodus.  And Google does see this type of employee departures each year, but a variety of factors have Paparo, and others, expecting this year's employee loss at Google to be much larger than that in recent years.
 
The primary factor that could drive a larger employee loss for Google this year is its stock price.  Over the past year, the company's shares have fallen from $577 a share to $501.  Since most tech firms, including Google, include stock options in compensation packages, the declining stock value essentially means that many Googlers will be on track to make less money this year than last.  Of course, Google can “stop the bleeding”, so to speak, if executives can find a way to drive the stock price back up.  There are a variety of factors, however, that will make that endeavor a very difficult one.
 
One of the biggest hurdles for Google in rebounding its stock price is leadership.  CEO Larry Page stepped down last year over frustration with the firm's pace of innovation, turning control over to Sundar Pichai.  Another major issue is the declining growth of the company's core business of search advertising.  Consumers are increasingly doing the bulk of their computing activities on mobile phones and tablets, and don't use search nearly as much as they did on PCs.  As a result, growth in Google's search advertising business grew at its slowest pace in six years last quarter.  Google has also lost a significant portion of its product searches, as more consumers conduct searches for specific products on Amazon rather than Google.
 
Another major hurdle for Google is an ongoing battle with Facebook over video advertising.  Google's YouTube website has been the clear leader since even before Google bought the company, but many insiders believe Facebook is uniquely positioned to capture advertising dollars from companies looking for an alternative to television.  Mobile users spend an average of 21 percent of their time online on Facebook, according to a recent study, and advertisers salivate for that kind of exposure.  Tech experts expect a series of changes from Google in the coming months as the world search leader looks for ways to increase revenue and halt the slumping stock value.  Some predict that Google will soon begin charging manufacturers more money for using their Android operating system and/or charging developers more money to sell their apps in the Google Play Store.

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