Google on move with hiring, Kirkland plans

While Microsoft has been courting Yahoo, Google has been steadily building its presence in Microsoft's backyard.

After a pause last winter to adjust to the economic downturn, Google has resumed plans to expand its presence at twin campuses in Seattle and in Kirkland, where the company has about 500 employees, including 360 engineers.

The company's hiring has picked up, though at a measured pace, and it plans to increase the size of its Seattle engineering team by 5 to 10 percent through the end of the year.

Google also has resumed work on its large new campus south of downtown Kirkland, which it plans to occupy in late September.

The campus — one of the company's largest outside of its headquarters in Mountain View, Calif. — was mothballed after Google abruptly froze its plans last November and began trying to sublease two of the three buildings.

One reason was Google had to aggressively manage expenses in the face of slowing ad sales. A chief financial officer (CFO) was hired, and benefits and contingent staff were trimmed.

By delaying occupancy in Kirkland, Google also postponed having to record the project as a capital expense, managers told me at the time.

Now the company is planning to be in at least one of the buildings by the end of the third quarter. Subleasing plans aren't finalized yet, a spokeswoman said Friday.

Work that resumed in June included installation of fixtures in the on-site cafe, according to city of Kirkland permit activity. On July 16, inspectors even did a seismic evaluation of "suspended clouds" attached to the ceiling in Building C.

Google didn't stop growing in the Seattle area, insisted Brian Bershad, Google's Seattle site director. The company merely paused to assess the economic situation, he said.

Bershad, a former University of Washington computer-science professor, provided a broad update during an interview shortly before Microsoft and Yahoo announced their alliance last week. Here are edited excerpts of the conversation:

Q: Do you think people understand what Google does in Seattle and Kirkland?

A: The way I talk about it is that Google as a whole does four basic things. It does ads, it does applications and it does search, and then there are systems — back-end, boiler infrastructure to keep things going.

If you go to Mountain View, you'll see many people working on those four things — ads, apps, search and systems. If you look in Seattle and Kirkland, you see that same cross section: Fewer people, fewer projects, but overall the mix consists of people here working in advertising, people here working in search, people here working in applications — Gmail, Maps, contacts — the sort of things you and I use when we go to Google.

[There also are] a sizable number of people working on things you never see, the back-end infrastructure. So in that sense, what we do here is really quite similar to what we do in Mountain View.

Q: When we talked last time, you took exception to my saying Google's growth was contracting [in a Dec. 22 column saying Google's honeymoon is over and it was hiring at a slower pace].

A: It was wrong.

Q: Google's last earnings report showed its employment declined by something like 300 people.

A: We shrank overall by 300 people relative to 20,200. We had communicated that we were going to be flat. The fact we shrank by less than a percent, or a percent, I would count that as a rounding error due to the ebbs and flows of hiring. Our goal was to be flat last quarter. We were.

In fact we are not shrinking in Seattle and Kirkland. We've been on a continuous growth path. It has been slower the last year, but the number we have here is 10 to 15 percent more than we had a year ago at this time. My expectation is by the end of the year we'll be up another 5 or 10 percent.

Q: So there wasn't really a hiring freeze, but you were trying to save money?

A: It's not so much saving money. ... We have tons of money; you can look at our numbers on this. The question was about slowing growth in the face of uncertainty, which is a completely rational thing to have done and I'm really pleased. We should not have been growing at the same rate when you don't know what the future is going to hold.

So growth did slow. It never stopped; hiring never stopped, but it certainly did slow from its most aggressive rates in 2007, which was, I think, when we were hiring most quickly.

Q: From outside, I've detected a change. Maybe it wasn't a freeze, but whatever it was seems to have thawed — you have job postings, for instance.

A: There's been a thaw. The way I talk about it internally and externally is, Seattle and Kirkland are hiring aggressively.

There was that period between Q1, end of Q1, and now when we really were on a much slower growth path, but now we recognize that the things that we need to do, we're now sure enough we know that we need to do them. We've got to hire to make them happen.

Q: Lots of companies didn't know what was happening in November.

A: I think overall there's more clarity going on, not just at Google but across the board. We would wake up in November, December, January and we didn't know if the banks were going to be there tomorrow. I don't think there's that same level of confusion.

For us, we didn't know what was going to happen with advertising, our primary revenue. We didn't know what was going to go with the change in the economy. I think we've got a pretty good sense that things are holding well and there's growth in some areas and the world is not coming to an end.

So were we trying to save money? Absolutely not. We were preparing for a possible world coming to an end. And it didn't. There was a very short period of time when we didn't know.

Q: Google was managing capital expenses, right?

A: We hired an amazing CFO [Patrick Pichette] about a year ago. He's done a remarkable job of helping us control spending without actually causing us to wake up every morning thinking we've got somebody watching every dime. We've gone through a transition as a company, from one where anything was possible to, "Let's try to think about how we spend our money."

A lot of the things that you might have seen externally — for example, the decision to delay the [Kirkland] move — that was driven by a desire to make sure that in any given quarter our numbers were gong to be rational and we would continue to be supported by our investors. I think those were all good decisions.

Q: If the Kirkland campus put, say, $100 million of expenses on your books last quarter, it would have made a difference?

A: Finance made a really good decision that said we should delay until we've got more clarity and we know what our budgets can be.

Q: Some CFOs might say you should all be in the same place, instead of having two facilities, in Seattle and Kirkland.

A: A CFO tries to do what's best for the business. Our decision to have a sizable presence in Seattle and a sizable presence in Kirkland is because that's what's best for the business. We think it's really important the engineers are able to work close to where they live. If you're on one side of the lake or the other, you end up excluding half the population from that benefit.

So in a way you can think of it as a benefit we make available to the employees. No one is told where they must work. They're encouraged to find projects that they like, and they're encouraged to find projects that give them a lifestyle they enjoy.

Q: How about Google's Chrome operating system. How much of its development will be done here, where there's a lot of OS expertise?

A: We're not going to talk about Chrome. We've made some really clear statements around Chrome, and they've got a good box around that. The way to think about Chrome is, Chrome is a Google product.

Q: OK. Are you still hearing from a lot of people at Microsoft wanting to work here?

A: We still get tons of résumés; the résumés haven't stopped. We're a healthy company that makes products people like, so there's been no real change in the résumé stream.

Brier Dudley's column appears Mondays. Reach him at 206-515-5687 or bdudley@seattletimes.com.