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Google Learns from Experience - Good Companies Walk a Fragile Path

Richard Brandt | Tuesday 15th July 2008

The New York times has an interesting article about the internal turmoil over the Google Day Care program.

It seems that the task of having someone watch your kids at Google costs more than putting them in the Stanford Ph.D. Program. NYT says Google has been subsidizing the program to the cacophonous tune of $37,000 per child per year. (Stanford's tuition tops out at about $34K.) So the company decided to raise prices to parents, from about $17,000 to nearly $29,000 a year, although Google has apparently backed off on that “slightly.

That means parents would pay slightly; less than $29K, while Google kicks in slightly; more than $25K, assuming the price increase comes directly off Google's subsidy. That's still twice the rate at which companies such as Cisco Systems and Oracle subsidize their day care. Parents are in tears, up in arms, pleading that they'll have to use outside day care. Google PR folks deny it, but the Times was told that Sergey Brin's response was to complain about employees addicted to free perks like -- a surprising display of Assburner's Syndrome, which is what happens to wealthy people who shoot off their mouths about the whinings of ordinary folk. The "Don't be evil" company is looking a lot less kind and gentle these days. As Joe Nocera at the Times laments, Google seems to be becoming “just another company. A fundamental rule of business: Never take away perks your employees or customers have grown used to. You get burned.

The problem is the result of a fundamental part of Google culture. Everything there has to be the best, and as the company grows, it may no longer be able to afford it.

Google seems to be trying to create the greatest day care program in the world. It's based on a philosophy called Reggio Emilia, which advocates a self-directed learning program for those preschool Larrys- and Sergeys-in-training (both of whom attended Montessori schools in their youth.) It also boasts highly paid teachers, small classes and the best toys and learning tools. Who wouldn't want that?

Frankly, most parents just want a good, friendly, stimulating and safe place to park their kids while they're at work. We don't need to be obsessed with creating baby geniuses from birth. Maybe Sergey is hoping to breed a new generation of Google employees. But Google cannot back off on quality now that it has set a standard. Still, this may not be as bad as it sounds. Google says it will start offering financial aid to parents who cannot afford the fees. It all depends on how good that financial aid turns out to be. It's possible that Google just wants its highly-optioned employees to kick in more money. Even Stanford announced that it will waive tuition for families earning less than $100,000 per year because its so well endowed (partly from licensing technology created by Sergey and Larry back to Google.)

Google still doesn't look like "just another company" to me. But it has demonstrated just how easy it is to damage a good company's reputation.

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