Google Web Grows in City

By EMILY GLAZER

Google Inc. has dramatically expanded its presence in Manhattan in the past year, adding roughly 750 people to its outpost in 2011 in the most prominent example of a technology company shifting its focus toward New York.

After acquiring four New York companies and going on a hiring spree for its media and advertising arms, Google now has about 2,750 employees in New York City, a 38% increase from 2010, the company told The Wall Street Journal. That’s faster growth than for the company overall, which expanded 33% from 2010 to 2011.

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Rob Bennett for The Wall Street Journal

Google’s New York offices

“Many of the most talented and creative engineers and scientists in our field of computer science want to be here…there’s a critical mass in the city,” says Alfred Spector, the vice president of research and special initiatives based in Google’s New York office.

Google’s expansion in New York—once seen as too expensive for tech start-ups—has helped fuel a perception that the city is in the midst of a technology industry boom. It comes as Facebook, Hewlett-Packard and other companies expand their New York presences, and Cornell University moves forward with an engineering campus on Roosevelt Island.

“Increasingly every part of the economy really is the tech sector, and the tech sector really is every part of the economy,” said Seth Pinsky, president of the city’s Economic Development Corp. “There is no industry in which New York is a world leader where technology doesn’t play an important role and won’t play an important role going forward.”

Google has cemented its status in New York since 2000, when a one-person ad-sales team began working out of a Starbucks on West 86th Street. Two years later, it had moved to an office in Times Square with around 70 employees before moving to its Chelsea offices at 111 Eighth Ave. in 2006.

In December 2010, it purchased that immense brick building for $1.9 billion.

Although Google’s engineering efforts are still driven out of its Mountain View, Calif., headquarters, the New York office is now a powerhouse for both its engineering and advertising work force.

Water towers in the café. A fire hydrant in the hallway. Google’s New York City office has gone on a hiring binge, and has tricked out its offices so that new employees know they’re working in New York. WSJ’s Andy Jordan takes an exclusive look inside Google’s Chelsea office in Manhattan.

Of the new hires in Manhattan, about half are from acquisitions, 20% are new sales hires, 20% are engineering hires and 10% are hired to human resources or administrative roles, Google spokesman Jordan Newman said.

“This is one of the major laboratories where we do advertising technology as well as advertising sales and marketing,” Mr. Spector said.

Mr. Newman said Google doesn’t make hiring projections but said the company is “actively hiring in New York, with a focus on sales and engineering.”

Google moved to Chelsea because the neighborhood—with its cafes and night life—was more suited to its young employees, Mr. Newman said. Its offices have a classic New York feel with exposed brick walls, and the building gives it room to grow.

The company has begun taking some of the local public-relations steps of a business here to stay, giving large sums to area universities and donating space to community organizations. It has also made a practice of recruiting employees from local colleges.

Google donates space on a weekly basis to local organizations that have a connection to technology in New York, Google or one of the community organizations it partners with, Mr. Newman said.

The New York office has paid off for advertising executives, they say. The company regularly hosts “office hours” to see agency clients in person and strengthen those relationships, says Brad Bender, a director of product management based in New York.

“Silicon Alley is a wonderful combination of technologists coupled with Madison Avenue,” Mr. Bender says. “It creates a wonderful feedback loop that we can feed off of.”

Rob Davis, executive director of the advanced video practice at advertising, marketing and public-relations agency Ogilvy Mather says Google’s New York expansion has had a direct impact on business. One of its largest consumer packaged-goods clients has pursued a sponsorship of YouTube’s premium channels rooted in an in-person New York meeting. “It was a chance for me to bring creatives, strategists and planners together, which you normally can’t do,” he says. “The cost of flying them all to California—forget about it. We wouldn’t have the face-to-face time.”

After that first meeting, four of Ogilvy’s clients also now partner with Google third-party company thismoment Inc., a social concept management system that pulls in Facebook and Twitter experiences with YouTube, and vice versa.

The growth in New York comes even as Google faces some obstacles, like privacy issues and lack of engagement with Google+. The company’s stock price, though, has risen nearly 3% in the past year.

The New York office has specifically been a hub for creation around Google Docs. In 2011, it rolled out a Google Docs Android app, new presentations, comment availability, offline viewing, spark lines in spreadsheets, sharing forms on Google+ and image capabilities.

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Rob Bennett for The Wall Street

Google’s headquarters at 111 8th Ave.

The focus on new technology is king. With roughly 1,400 software engineers, Google has one of the highest tallies of such workers out of all New York-based technology companies.

New York is one of the two important sites in speech recognition, such as voice search on Android phones, and natural language processing. Engineers are also plugging away at local search, such as using a map on a mobile device to find something where the location is relevant, like a restaurant, Mr. Spector says. To boost those focuses, Google also acquired restaurant reviewer Zagat and licensing and royalty service provider Rights Flow in 2011.

Google’s New York office also plays a role is creating a platform for online ads, especially display ads. Various reports cite the industry running between $10 billion and $30 billion but Mr. Bender said it can be “much, much bigger than that,” estimating $200 billion.

For instance, Google works with agencies that represent companies like Ford and Intercontinental Hotels. Google wouldn’t share specific details of such deals but says it can more easily work with these companies or their advertising agencies in the evolution of new tools and technologies.

Ogilvy’s Mr. Davis said the in-person meetings build a stronger bond than a phone call. “It’s much more casual when you’re all in the same space,” he said. “You’re all sitting in a room and it’s ‘Oh, hey, look at this, I’ve got something on my machine.'”

Write to Emily Glazer at emily.glazer@wsj.com

Article source: http://online.wsj.com/article/SB10001424052970204653604577251293275921060.html