Is Google too smart for its own good?

Google's famous for hiring the best and the brightest, but when they get bored, they're bound to create the son-of-Google, warns Fortune's Jeffrey O'Brien.

By Jeffrey M. O'Brien, Fortune senior editor

SAN FRANCISCO (Fortune) -- A roomful of 300-odd flaks gathered over rubber chicken on Friday to hear a panel of 7 top tech journalists talk about the big stories as we see them. If you're interested in the collective wisdom of Don Clark at the Wall Street Journal, David Satterfield at the San Jose Mercury News, Joel Dreyfuss at The Red Herring, Steve Fox at Infoworld, Andreas Kluth at The Economist, moderator Larry Magid of CBS News, and me, listen to the podcast here.

One of the main topics was the coming son-of-Google boom. With Google's (Charts) stock price north of $500, it's clear the company is still on an upward trajectory. The company continues to command respect in the Valley. It has a great brand and is raking in cash. Meanwhile, smart people like Joe Kraus continue to join the fold.

And yet, just over two years after the IPO, employees have begun trickling out. The evidence is mostly anecdotal at this point, yet everyone seems to know someone who has either left the company or is about to go. Of course this always happens with a successful company. But Google's famously lofty hiring standards and arduous interview regimen seems to be hastening the process.

Too many smart people

I met Kraus over coffee a couple weeks ago, 10 days into his new job as director of product management (Google acquired his latest wiki startup, Jotspot). When I asked him about his first impressions, he said his colleagues were smarter than he could have imagined.

Seeing that I was unimpressed by the observation, Kraus grew more insistent. "Ten days in a new job and you don't meet anyone who's dumb? That's weird," he said.

Kraus meant it as a compliment for his new colleagues and to his new employer. Every company wants to hire the smartest people possible, and Google has clearly succeeded. But you know what you get when you get too many smart people in one room? You get the corporate equivalent of the U.S. Olympic basketball team.

Think about it: there can only be one smartest person in every room. There are dozens of trophy hires and incredibly smart, entrepreneurial minds buried inside Google who are fast-becoming frustrated with their inability to accomplish anything. And while Google motors along, minting money with its AdSense and AdWords programs, these brilliant minds are getting antsy.

Armed with seven-figure bank accounts and professional networks of dozens of other equally brilliant and rich new friends, those frustrated Googlers are bound to set out on their own and ignite a son-of-Google wave of innovation. If a company the size of PayPal can kick off a second wave that includes LinkedIn, Slide, Yelp, YouTube, Clarium Capital, and Room 9 Entertainment, among others, the sons-of-Google wave should be a world-changer.

But what will it mean for Google? For starters, it'll provide an additional food chain for new products and features. The profligate M&A spending of all the GAMEY (Google, Apple (Charts), Microsoft (Charts), Ebay (Charts), Yahoo (Charts)) companies has touched off a run of feature innovation over the last few years. You can be sure Google will be on the inside track to acquire the latest ideas of former employees.

But this trend should also alter the company's hiring practices. With less and less obvious upside in GOOG stock, the company can no longer count on hiring the crème. Which is just fine. I guarantee there are a ton of menial jobs at Google that would bore the average Googler to tears. If you need someone to write press releases, you don't start the hiring process with Pulitzer prize winners. If you need someone to hold the camera for the weekly vlog, it's in no one's best interest to recruit a Ivy League grad with an Academy Award nomination.


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