Google to expand Ann Arbor office in hiring splurge

Posted on January 26, 2011

SAN FRANCISCO — Google Inc. plans to hire more than 6,200 workers this year — boosting its work force by at least a quarter — in the biggest expansion yet by the Internet’s most profitable company.” target=”_blank”> reported Tuesday that the hiring will include expanding Google’s Ann Arbor AdWords office on Division.

It quoted spokesman Jake Parillo saying: “We expect to grow our entire Michigan operation in the coming year.”

The hiring spree comes as President Barack Obama emphasized the need for more jobs during his State of the Union address Tuesday night. Google CEO Eric Schmidt was among a group of business leaders who met with Obama last month to discuss ways to bolster the economy.

But Google’s push to further expand its work force, which grew by 23 percent last year, may not be well received on Wall Street. The Internet search leader’s spending has annoyed some investors who prefer a more frugal approach in hopes of fatter returns.

Google executives have consistently brushed aside those concerns. They say the company needs to aggressively recruit the smartest computer engineers and the most persuasive sales representatives to maintain its lead in online search and advertising. They also stress the need to diversify into other services in computing, telecommunications and the media.

The company outlined its hiring plans Tuesday with The Associated Press without providing many specifics beyond its pledge to hire more people than it did in 2007, when it added 6,131 workers. Google hired nearly 4,600 people last year to end 2010 with 24,400 employees.

The expansion was announced on the same day Yahoo Inc. cut 100 to 150 workers, or about 1 percent, of its payroll amid pressures from falling revenue.

Google’s commitment to increase its work force by at least 25 percent this year means Google’s payroll may grow faster than its revenue.

Analysts polled by FactSet expect Google’s revenue to increase 22 percent this year, after subtracting commissions it pays advertising partners.

Google wouldn’t say how many of the new jobs will be based in the United States, where most of its current workers are located. In a speech Tuesday, Schmidt said Google will hire more than 1,000 workers in Europe this year. All told, Google has more than 60 offices in 30 countries.

“At this stage, the number of opportunities just vastly exceed the number of people we have at the company,” said Alan Eustace, Google’s senior vice president of engineering and research.

Even if it surpasses 31,000 employees this year, Google will still have far fewer people than Microsoft Corp., among its fiercest rival. Microsoft employed about 88,400 people through September, the most recent available.

Managing a company with the population of a small city will pose another challenge for Google co-founder Larry Page as he prepares to take over as the company’s CEO April 4.

Page, 37, served as CEO in Google’s early days when the company was far smaller. Google had fewer than 300 employees when Schmidt replaced Page as CEO a decade ago.

Google has become a coveted place to work, largely because Page and fellow co-founder Sergey Brin have always insisted on making the company’s offices seem like a home away from home in an effort to make people more productive. All meals, snacks and drinks are free at Google, and employees can commute on free shuttles equipped with Internet access to San Francisco and other cities.

The company can afford to splurge because it has become increasingly prosperous. Google earned $8.5 billion last year, far more than its Internet peers, and ended December with nearly $35 billion in cash.

A sprawling headquarters in Mountain View, dubbed the “Googleplex,” is a testament to the company’s explosive growth and its ambitions to become far larger.

Google owns or leases about 4.2 million square feet scattered across more than 60 buildings in Mountain View, and it hopes to build another corporate campus on a nearby NASA complex in Silicon Valley. It also signaled plans to expand in New York last year when it paid about $2 billion to buy a 15-story office spanning about 2.9 million square feet — more space than the Empire State Building. About 2,000 Google employees currently work in that New York office.

Trying to get a job at Google is akin to trying to get into Stanford University, where Page and Brin started working on their search engine as graduate students. The company receives more than 1 million applications a year and identifies the top candidates through a rigorous screening process that analyzes SAT scores, grade-point averages and their performance on tests with such questions as: “How many different ways can you color an icosahedron with one of three colors on each face?”

The people who make it through Google’s intellectual gauntlet will likely be under intense pressure if they get hired. Management is pushing aggressively for more innovation so that the Internet giant can fend off emerging threats from smaller companies such as Facebook and Twitter.

“The opportunities are so big this year that for us to maximize them we are going to have to work quicker and we are going to have to make decisions faster,” Eustace said.

As its Internet social network grows, Facebook has become more successful at luring away Google’s workers. About 200 of Facebook’s roughly 2,000 employees used to work at Google. The defections haven’t left a big dent, given that the company hired an average of nearly 200 workers every two weeks last year.

But the recent raids by Facebook and other promising startups got Google’s attention. To retain employees, the company gave its entire work force a 10 percent raise. That move alone could increase Google’s operating expenses by about $500 million this year, based on analyst estimates. Virtually all employees also receive stock options, a benefit that turned most of the company’s early hires into multimillionaires.