Google Plant in Pryor

[Nick Danger]

This article makes me wonder if the Google plant in Pryor that is "on hold" will ever become viable. I knew it was delayed, but this article indicates some deep issues for them to overcome.

Google Gears Down for Tougher Times Article

MOUNTAIN VIEW, Calif. -- Corporate austerity is reaching one of the most extravagant spenders of the boom years. Google Inc. has begun to tighten its belt.

For much of its 10-year history, Google spent money at a pace that was the marvel of Silicon Valley. It hired by the thousands and dished out generous perks, including three free meals a day, free doctors, ski trips and laundry facilities, and subsidized personal trainers. It let engineers spend 20% of their time pursuing pet projects. The company's goal was to develop new products that would reduce its nearly total reliance on selling ads connected to Internet searches.

But revenue growth has slowed dramatically over the past year. Products such as Google Checkout, a Web payment service, and Google TV Ads, which sells television advertising time, haven't generated significant revenue, leaving online ads still accounting for 97% of revenue. Google's share price has fallen to $275.11 in trading Tuesday on the Nasdaq Stock Market, less than half its record close of $741.79 in November 2007.

So with the U.S. economy in a recession, Google is ratcheting back spending and cutting new projects. "We have to behave as though we don't know" what's going to happen, says Google Chief Executive Eric Schmidt. The company will curtail the "dark matter," he says, projects that "haven't really caught on" and "aren't really that exciting." He says the company is "not going to give" an engineer 20 people to work with on certain experimental projects anymore. "When the cycle comes back," he says, "we will be able to fund his brilliant vision."

Last month, it pulled the plug on SearchMash, a Web site it used to experiment with new ways to organize search results. This month, it plans to do the same with Lively, a "virtual world" launched this summer where online users can create characters and rooms for them to hang out in. Google explained that it wants to "prioritize our resources and focus more on our core search, ads and apps business."
Google is also rethinking its practice of providing some Web services without ads, so that it can generate more revenue. On Nov. 17, Google began running ads on Google Finance, a financial-news site, and said it would soon start showing ads to some users of its Google News service as well.

Google's years of rapid growth were fueled almost entirely by a single business: sales of search ads, the small text ads that appear next to search results cranked out by its Internet search engine. The company realized that the torrid growth couldn't continue forever. So far, it hasn't come up with any big new revenue streams.

"Letting a thousand flowers bloom and letting many of them stall and go nowhere has worked well to this point," says Thomas Eisenmann, a professor at Harvard Business School. "But if you want to be the dominant advertising network across every medium, you need more top-down management."

Google executives say they started preparing for slower growth more than a year ago. But the economic crisis is forcing them to step up their efforts.

In recent weeks, Mr. Schmidt has held meetings with top executives to determine where to focus investment more narrowly. Top priorities include display ads, which use graphics and appear on Web pages; advertising on mobile phones; and the company's online business software.

Google, which is known for fostering a freewheeling atmosphere at its offices, like this one in San Francisco, is trimming some perks and narrowing the focus of its investments during the downturn.

Mr. Schmidt says the company is shifting more engineering and sales resources to those areas, and away from less-promising projects. Teams on projects the company is merely "fiddling with," he says, will get "naturally smaller as people get plucked off."

This fall, the company announced plans to "significantly" reduce its roughly 10,000 contract workers, whose jobs range from engineering to food services. While the timing and focus of the cuts remain unclear, Google employees already are joking that it's getting easier to find a spot in the company's crowded parking lots.

Google has also begun chipping away at perks. In recent months, it reduced the hours of its free cafeteria service and suspended the traditional afternoon tea in its New York office. A Google spokesman says its core culture is not changing. "Our unique culture is an essential part of what makes Google Google," he says.

Google is coping with a problem that has befallen other tech companies before it, from Microsoft Corp. to eBay Inc.: adjusting to the end of runaway growth. Revenue grew by a robust 31% in the third quarter from a year earlier, but that's down from 92% annual growth in 2005. Still, with $14 billion in cash and roughly 30% of the U.S. online-ad market, Google is in a much better position than its competitors to withstand this downturn, Wall Street analysts say.

Nevertheless, the internal changes represent a big shift for Google. Early in its life, the company said that it would always put long-term objectives ahead of shareholders' short-term interests. It wooed the best engineers with generous perks, workplaces that feature pool tables and volleyball courts, and a promise they could spend time pursuing side projects. Inside the company, it was considered crass to talk about whether a project would eventually make money, say current and former product engineers. The measure that mattered most was whether a new idea would be good for the Internet user's experience.

That anything-goes culture fostered thousands of projects. The company launched a program to digitize and search millions of books; a social-networking site called Orkut; Google Base, a classified-listings service; Google Earth for browsing satellite images; and a way to get answers to search queries via text messages on mobile phones. Some, such as Google's email service, called Gmail, became big hits. Many others, such as experiments with offering digital music and an online data-storage service, never took off.

The failures didn't matter much when money was rolling in: Revenue grew 92% in 2005 and 73% in 2006. But in July 2007, the company said it had overspent on hiring, causing second-quarter operating income to fall from the prior quarter, a rare misstep. Even so, revenue grew by 56% that year.

Google hired a new vice president of financial planning and analysis, Francois Delepine, who sought to standardize and more tightly manage the budget process. Finance teams started allocating more new hires to groups that generated the most revenue per head, say people familiar with the matter. To better predict revenue, the company implemented quotas for ad-sales representatives and tied the pay of more employees to performance, these people said. Different departments were required to budget the same amount for the same item, whether it was a server computer or a business-class ticket to Europe.

The company stopped the pell-mell hiring of virtually any employee who met its qualifications, focusing instead on adding heads only where they were needed. Hiring slowed to 889 new employees in the fourth quarter of last year, down from around 1,300 in the year-earlier period.

To better manage projects in development, top executives asked engineering vice presidents to rank the 20 most promising projects within their units; those that made the lists were granted the bulk of the resources, say former Google product managers. Projects not on the lists were far less likely than before to get technical support.

In last year's fourth quarter, the company's revenue and profit fell short of analysts' expectations, amplifying concerns about the impact of an economic slowdown on online advertising. But the company's profit jumped 30% in the first quarter and 35% in the second as it continued to steal search-market share from competitors. Google said it had not yet felt any impact from the weakening economy. It was well-positioned to continue to thrive, it argued, because its search ads provided the best, and the most measurable, return for advertisers.

But U.S. Internet-advertising revenues for the industry totaled $5.9 billion in the third quarter, up just 2% from the prior quarter, according to the Interactive Advertising Bureau. Google said during a recent earnings call that it is seeing weaker spending from auto-financing, home-financing and real-estate advertisers.

The financial crisis has created a new sense of urgency within the company. Top executives say they remain committed to projects they believe hold long-term potential, but are prepared to "starve" lesser ones. Among the projects whose future is uncertain are Google Notebook, a site for storing and taking notes on Web pages, and Google Audio Indexing, which allows users to search for phrases within online video footage of politicians, say people familiar with the matter.

The company also has moved to merge overlapping products. Google Page Creator, a service that allowed users to create their own Web pages, was recently quietly discontinued, effectively merged into a similar product called Google Sites.

Employees say they're unsure which products will make the cut. "It's not exactly clear where that bottom line is now," says a current operations manager. "I don't think they know that either."

One senior Google executive says the company is basing decisions on the same criteria it has always used, including how many users a product has and how much money the company thinks it can make. "If I look at the criteria now and three years ago, the same things are monitored," he says.

Some engineers complain they can no longer tap the employees and machines they need to develop their ideas. This is no small issue among elite programmers, many of whom joined the company for the chance to work on such projects, according to current and former employees.
Another senior executive says the company is still committed to some experiments. "If it doesn't cost much, we go for it," he says. "We are not betting the farm on these things."
Earlier this year, managers underwent an operational review of Google's sprawling real-estate footprint. For years, the company elected to open offices wherever it felt it could find talented engineers. That often led to multiple offices around relatively small markets like college towns. To reduce overlap, in July the company said it was closing an office in Dallas and another in Denver, saying it already had at least two offices in each market.

Google recently hired a new chief financial officer, Patrick Pichette. Trained in "Six Sigma" management practices -- a rigid quality-control system designed to eliminate waste -- Mr. Pichette is looking to reduce inefficiencies and delay spending when possible.
Google used to build with abandon new data centers to house its computer servers. It figured that demand for the company's products would inevitably catch up with capacity. Mr. Pichette has made the company pay more attention to aligning its capacity with its needs, say people familiar with the matter. Google's operating committee recently decided to delay opening a new facility in Oklahoma that was planned during flusher times.

There is some evidence that Google's efforts are starting to pay off. In October, rivals like Yahoo and eBay announced layoffs after issuing grim third-quarter results. Google beat analysts' diminished expectations, largely because of tight cost controls. "There's a lot more we can do," said Mr. Schmidt at the time.

[sgrizzle]

Google Checkout is a good product and will become a revenue generator if they can get 1-2 major vendors (like amazon) to start using it. Paypal would've been nothing without ebay after all and google checkout is a much better payment system.

They have issues but they are still on top in their market and will continue to be. As soon as there is any kind of upturn they will be doing very well while everyone else will just be catching up.

[inteller]

this plant is never going to happen.  Mainly because they were too upper crust for the work force around here (i predicted that) and they are starting to see more competition which requires them to be lean.

[rwarn17588]

quote:Originally posted by inteller

this plant is never going to happen.  Mainly because they were too upper crust for the work force around here (i predicted that) and they are starting to see more competition which requires them to be lean.

If inteller says it, then it must be so. [}:)]

[izmophonik]

Upper crust?  This is just supposed to be a data center..not a corporate office.

[inteller]

quote:Originally posted by izmophonik

Upper crust?  This is just supposed to be a data center..not a corporate office.

exactly, but google is full of themselves.

[perspicuity85]

quote:Originally posted by inteller

this plant is never going to happen.  Mainly because they were too upper crust for the work force around here (i predicted that) and they are starting to see more competition which requires them to be lean.

That's a ridiculous generalization.  The data center will open during improved economic conditions.  There simply isn't sufficient demand for the expansion of their services right now to warrant the opening of new data centers.  If you look at their corporate web site (http://www.google.com/support/jobs/bin/topic.py?dep_id=1060&loc_id=11387&topic=1060), there are job postings for the Pryor site.  Why would they waste administrative time processing job applications for positions that will never be filled?

[inteller]

quote:Originally posted by perspicuity85

quote:Originally posted by inteller

this plant is never going to happen.  Mainly because they were too upper crust for the work force around here (i predicted that) and they are starting to see more competition which requires them to be lean.

That's a ridiculous generalization.  The data center will open during improved economic conditions.  There simply isn't sufficient demand for the expansion of their services right now to warrant the opening of new data centers.  If you look at their corporate web site (http://www.google.com/support/jobs/bin/topic.py?dep_id=1060&loc_id=11387&topic=1060), there are job postings for the Pryor site.  Why would they waste administrative time processing job applications for positions that will never be filled?

those positions have been up for months and I know of people that have interviewed for them (who were MORE than qualified).

[stageidea]

Looks, like the Google project is getting going again:
Google officials to provide details of restarted Pryor project
http://www.tulsaworld.com/news/article.aspx?subjectid=11&articleid=20101021_52_A1_Google188106

Google Inc. announced late Wednesday that it is resuming work on its data center at Mid-America Industrial Park in Pryor, a $600 million project that has been on hold since 2008.


Google officials will provide more information and answer questions at a public meeting Thursday morning at 11 a.m., according to the announcement.

More information will be posted on tulsaworld.com following the meeting.

The company expects the facility to be fully operational late next year.

Eventually, it will employ 100 people, officials said.

"We'd like to thank the people of Mayes County for their patience and we look forward to becoming an even bigger part of your community going forward," said Paul Froutan, director of hardware operations for Google, in a news release. "We will keep you informed as we bring this data center online."

Mountain View, Calif.-based Google started the project in 2007 but later determined it did not need the server capacity as quickly as had been thought. Some equipment was installed in an initial building, and a small number of staff members were hired to maintain the facility, which sits on 800 acres.

This type of data center also is called a "server farm" and essentially is a massive cluster of computers. Together, they help power Google's growing array of online services, including Internet searches, e-mail and Google Maps.

"This facility will handle all of the services Google offers," said Emily Wood, a company spokeswoman, in
a telephone interview with the Tulsa World on Wednesday night.

Google, she said, had "done a lot of the basics" at the Pryor site before the project was halted.

"We'll be installing additional servers now and hiring more people," Wood said.

The data center had been highly anticipated.

The Tulsa Metro Chamber estimated in 2007 that the Google project could have an impact of $400 million during construction and an ongoing impact of $14 million annually to the entire area, with $7.3 million of that within the Tulsa metro area.

The announcement is some welcome news for Pryor, which has taken some economic hits lately.

In February, another high-profile corporation, PepsiCo, decided to close its two-year-old Gatorade plant, which also was in the Mid-America Industrial Park.

The company terminated 108 people at the 1.4 million-square-foot facility.


Read more from this Tulsa World article at http://www.tulsaworld.com/news/article.aspx?subjectid=11&articleid=20101021_52_A1_Google188106

[custosnox]

I saw this, and was thinking of looking into it when I get my degree.  Problem is, I don't care to move out to Pryor, and that is one heck of a commute.

[Ibanez]

this plant is never going to happen.  Mainly because they were too upper crust for the work force around here (i predicted that) and they are starting to see more competition which requires them to be lean.

Do you ever get tired of being wrong?

[Conan71]

Do you ever get tired of being wrong?

No more than he gets tired of being a dick.

[Townsend]

No more than he gets tired of being a dick.

Ha, snort

[Red Arrow]

Problem is, I don't care to move out to Pryor, and that is one heck of a commute.

It's not too difficult since most of the way you are going opposite the heavy traffic.  It is close to 50 miles from 111th & Memorial and your gas bill will be significant.  Did it for several years before getting RIFFED in early 2003.

[nathanm]

It's not too difficult since most of the way you are going opposite the heavy traffic.  It is close to 50 miles from 111th & Memorial and your gas bill will be significant.  Did it for several years before getting RIFFED in early 2003.

Yeah, it took about an hour to Pryor back when I lived out south. It's about 45-50 minutes (or would be without the construction) from 15th and Harvard.