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the millionaire headhunting in Silicon Valley

Companies like Facebook, Google and Zynga not hesitate to acquire small companies with the sole aim of achieving a specific profile of engineers to add to their platforms

Sunday 22 May 2011

Facebook CEO Mark Zuckerberg,

during a presentation of the company. Photo: Reuters

By Miguel Helft
The New York Times

Sam Lessin fledgling company sold its site to Facebook by the millions of dollars the year Finally, and then quickly closed it. All that the company wanted was adding him to their ranks.

This is what has happened in the Silicon Valley bubble. Companies like Facebook , Google and Zynga are so hungry to grab the best talent who buy newly started companies to keep their founders and their engineers (and then dispose of such products signatures).

Some technology blogs call this mode "acqhire" (ie, a large company buys a small and keeps its employees). The companies said the purchase made which is a talent acquisition and generally it comes with a price per head.

"Engineers are worth half a million to one million U.S. dollars," said Vaughan Smith, who is the director of corporate development at Facebook, who has helped negotiate many of the approximately 20 acquisitions of talented people Facebook conducted during the past four years. Moreover, often, money (expressed in the form of shares) is distributed among the founders, employees and investors of the firm that has just begun. In addition, employees earn a high salary acquired and often get more stock options, which makes this a good time for engineers to entrepreneurs.

Lessin, 27, gladly traded his dream of becoming the next Internet superstar by a leading work on Facebook. "The impact here is astronomical," said Lessin, whose company recently launched was Drop.io . "It's great."

But agreements may not be as good for everyone. Some Silicon Valley veterans worry that companies pay more for talent, and some acquired employees will drop out as possible, perhaps because they will not break in a corporate environment. And venture capitalists, who want a windfall of tens or hundreds of millions of U.S. dollars, or more simply be content with less reluctantly.

"It is what we aim as investors," said Dave McClure, who is the founder of 500 startups, a venture capital fund. "We're trying to build businesses large and lasting."

However, McClure and other investors said that an acquisition talent that offers a modest salary is better than no agreement, if the person who owns a company that just started complaining. And, while a sale of a few million will not add much to their funds or the ruin, could be a considerable sum for an engineer who has just received, they said.

"Who are we to tell a young entrepreneur who can not have your first million?" Said Paul Graham, a partner at Y Combinator, a well known "incubator" that has invested in hundreds of companies starters.

Acquisitions talent are a reflection of the competitive market of children connected to computer experts in more than a decade. Big companies like Google, and small firms starters complain because they can not find enough good people. Used as bait new benefits and incentives, from free iPads to lessons on business topics, in order to attract them.

"The war for talented people has become even more heated," said Scott Dettmer, an engineer who has advised companies involved in technology for decades. "And this is another vehicle to meet the insatiable quest for talent. "

Perhaps no one has climbed so much, and more enthusiastic, Facebook, which bought a string of small firms who are just starting, with names like: Parakey, Hot Potato and Octazen. Almost all their products have gone.

In 2009, he bought FriendFeed Facebook , a service that helps people to track the online activities of your friends. Those who are in the business of technology believed the company was trying to compete more effectively with Twitter. But Facebook, in fact, was looking for a dozen recognized product managers and engineers from FriendFeed, among which includes two of its founders, Paul Buchheit and Bret Taylor, who had also worked at Google.

"I really wanted to have Bret" said Mark Zuckerberg, Facebook's chief executive, in an interview last year.

FriendFeed Although the service is still available, has not been updated or new features have been incorporated. Of the 12 employees who entered Facebook, eight remain in the firm and Taylor is the director of technology. Buchheit, best known as the creator of Gmail, it was.

people not acquired or purchasers like to talk about numbers. But acquisitions are usually in stock and the employees usually must wait a year or more until they can sell. For its part, Facebook says that agreements worth it because the company needs creative entrepreneurs can also help keep alive the culture of Facebook related to the acquisition of firms who are just starting.

A view of the official conference for Facebook developers in 2010. On several occasions, the acquisition of companies is intended only to add and retain talent in Silicon Valley. Photo: AFP

"The measure of how well this works for us is that the CEO of every acquisition we've done is still an employee of the company," Smith said.

But the size of some agreements causes surprise.

He FriendFeed widely known that he bought for about U.S. $ 47 million, or about U.S. $ 4 million per employee, although some money went to outside investors. When Facebook acquired Drop.io, an amount is unknown, only Lessin, who is a friend of Zuckerberg since I went to college, joined Facebook. Now he is in charge of the pages linked to user profiles.

Facebook

paid several million dollars by Drop.io, according to people familiar with the deal, which would speak only on condition of anonymity because the terms and conditions of the agreement were confidential.

Facebook declined to comment on the price you paid.

"Some values \u200b\u200bper capita appear to be difficult to justify," said Randy Komisar, a venture capital investor in a long time. "There are not many proven talents in areas such as social networks that are battlegrounds for companies today. The people will look back and realize they paid too in some cases. But in the heat of events, you may not feel they have many options. "

In the interview which took place last year, Zuckerberg suggested that a high price for people like Taylor and his colleagues at FriendFeed was justified: "Someone who is exceptional in his role is not just a little better than someone who is pretty good," he said. "It is 100 times better."

Other companies are more wary of their strategies .

Google did not accept to be interviewed on the subject. In a statement, the company downplayed his involvement, saying that even if a department of an acquired company ceased to exist, their ideas often appeared later in the Google products.

Zynga said it bought 12 companies last year and the reason for the purchase of an unspecified number of them were talented employees. One company was Area / Code, a studio specializing in games, located in New York, which has 20 employees. But retained one of the mobile phone games Area / Code, the Drop7, Zynga bought the company said mainly by the ability to design with their employees.

In a recent networking event for companies on startups in Silicon Valley, many entrepreneurs spoke of possible agreements. Alexander Moore, 27, said he had never heard of acquisitions of talent when he founded Baydin (which helps people organize their inboxes email), in Boston, in 2009.

Since then, Moore moved his new company, consisting of three persons, to Silicon Valley. "This happens all the time, "he said," and is definitely something we would consider. "

Source: lanacion.com