Just days after taking over Google’s CEO seat, Larry Page sent out a company-wide memo informing employees that bonuses are now tied directly to the company’s social media success, according to a report from Business Insider, which supposedly received a copy of the memo.
According to the leaked memo, bonuses will depend on how well the company does on its “strategy to integrate relationships, sharing and identity across our products. If we’re successful, your bonus could be up to 25 percent bigger. If not, your bonus could be up to 25 percent less than target.”
“It’s a firm wide initiative across Google,” said Colin Gillis, an analyst at BGC Financial. “There’s no greater way to signal the importance of this than tie everyone’s pay to it.”
For months now, Internet rumors about Google’s social networking strategy have circulated widely. Some suggest that the company is building a Facebook-like tool, while others predict a gaming-focused social network or the addition of social features to Google services such as Search and Maps.
This week’s memo, if legitimate, seems to indicate that Page wants Google to dive head-first into social networking. And he wants every single employee working in that same direction.
And he has good motivation as Facebook increasingly becomes a major rival.
Facebook, with more than 500 million users, is the largest social networking site in the world. That alone is a threat to Google, which wants users to spend their time on Google sites.
“This is the biggest threat to them – being disrupted by Facebook,” said Gillis. “I think Microsoft is attacking the existing business but the real disruption in future business comes from Facebook.”
In a management reorganization this week, Page named Vic Gundotra, a former Microsoft general manager, as Google’s senior vice president of social.
Rob Enderle, an analyst with the Enderle Group, lauded Gundotra’s appointment. “He is one of the sharpest guys to have left Microsoft. He has a strong ability to build relationships. He’s probably one of the most experienced people to put on a social project. However this is an area that is very new and still largely in the discovery phase, which means his success is not assured,” he said.
Google’s real plan remains firmly up in the air, said Ezra Gottheil, an analyst with Technology Business Research.
Gottheil said it doesn’t make sense for Google to go head-to-head with Facebook considering the size of the social network’s lead and dominance in that space.
“Gaming, especially multi-platform gaming, is one real possibility,” said Gottheil. “I think there are opportunities to complement Facebook with more group-oriented and topic-oriented social networking offerings. Google tried to do that with Wave, and failed, but it doesn’t mean the opportunity isn’t there.”