Google Considering Startup Incubator to Retain Talent

The 12-year-old Google is tired of losing talented employees to younger rivals, and is considering starting an internal startup incubator to keep them in-house, according to a New York Times report.

Upstart Facebook has nabbed at least 142 employees from the search giant, the Times said, and as the company moves into middle age, the startup environment that it fostered when it began in 1998 has become rigid over time.

“There was a time when three people at Google could build a world-class product and deliver it, and it is gone,” Google CEO Eric Schmidt told the Times. “So I think it’s absolutely harder to get things out the door. That’s probably our biggest strategic issue.”

Google is reportedly focused on retaining employees with startup dreams by offering them a chance to start their companies withing Google, using company resources and tools. One such project was the failed Google Wave, a tool that let users collaborate in real time. The manager who led the Wave team has since moved on to Facebook.

Since it’s early days, Google has had a policy of letting employees spend 20% of their time developing independent projects. The popular Gmail email service is a result of one of those projects. However, according to the Times, Google has been pushing its engineers to improve existing products rather than develop new ones, leaving forward-thinking employees frustrated.

The internal startup incubator idea has been tried before. Yahoo! tried something similar, but shut it down in 2008. Companies such as Cisco Systems and IBM have had more success.