One December day last year, an email went out to a group of Google employees and contractors.
The email explained how, just more than a year after Google acquired guidebook company Zagat, the division was going to be re-organised.
One Google employee in the Zagat division read the email and then burst into tears. Her group hadn’t been mentioned, and she assumed that meant she was getting laid off.
Though she was wrong, this was a reasonable assumption. Google had just told many of her colleagues, editors working for Zagat, that their contracts would not be renewed for 2013.
This woman was not the only one upset over the email.
Another person who got the email from Google management got another, later that day, from a colleague. That second message said, in so many words: You should visit the women’s restroom. There’s something there you have to see.
There certainly was!
There in the women’s bathroom of Google, a company regarded worldwide as great place to work, someone had scrawled graffiti in thick permanent marker.
Our source took a photo with her phone. Below, see a censored version of that photo.
What did Google do to provoke so this amusing evidence of workplace frustration?
Has the Zagat acquisition been a waste of Google’s time and money and gone terribly wrong?
After speaking with a number of sources, some of whom worked in Google’s Zagat division for the past year or so, we have a story that answers those questions.
It’s a story about coming close to having something awesome, only to see it slip away.
It’s about the collision between the wealthy dream world of the technology industry and the scratch-and-claw meager existence of freelance writers.
It’s also a story about how a few seemingly small changes at the top of a large company can develop into deep, life-changing tremors at the bottom.
Welcome to Google
In September 2011, Google bought Zagat for $125 million.
Inside Google, the deal’s champion was Marissa Mayer, who was then Vice President of Local, Maps, and Location Services at Google.
It was Mayer’s first big deal since taking over this role the year before.
Mayer had big plans for Zagat.
Even though Google is an all-digital company, she wanted to staff Zagat with more editors and have it publish even more hard-copy guides in new cities.
Mayer put one of her protegés, a rising product management star named Bernardo Hernandez, in charge of Zagat, and told him to make it happen.
But Mayer and Hernandez had a problem.
Their bosses at Google did not share their enthusiasm for expanding Zagat, and they refused to approve an increase in full-time employee headcount.
So instead of hiring full-time employees, Hernandez ordered Google’s Human Resources team to hire lots contract employees, also known as “temps.”
Google HR followed his orders, and from January 2012 until about March 2012, it staffed up Zagat’s editorial division with temporary workers.
Hiring temporary workers is a fine and standard thing to do.
But here’s the thing about these particular temps.
According to three sources we spoke to, none of them felt like they were being hired into temporary jobs.
They felt that they were being hired into temp jobs just for the time being, and that soon, they would be hired into full-time jobs.
These three people tell us the main reason they felt this way is that Google encouraged them to.
We have seen one piece of evidence that suggests that this is true.
One former Google contractor who worked in the Zagat division showed us an email she got from Google HR before she was hired.
In the email, the Google HR representative carefully explained that Google wanted to hire this person as a full-time employee for Zagat/Google, but that Google management had not given the division permission to expand its fulltime headcount. The email said Google’s “hope” was that after a year, it would be able to hire this person fulltime, with benefits.
The other two sources we talked to did not get emails with such explicit language, but said they were told the same thing verbally.
All three contractors said that, over the next year, their immediate Google superiors often re-iterated their hope that all Zagat contractors would be hired on as fulltime Googlers.
Says one: “It was presented to me as they wanted to hire people fulltime as Googlers, but the Google hiring process is long and involved and so it was easier and better for them, because they needed people working right away, to bring you on as a temporary employee, and that we’d be hired eventually.”
Perhaps thanks to these promises of fulltime employment at Google – known for its wonderful workplace – Zagat was able to hire editorial staff from some impressive guidebook brands, including Not For Tourists and Fodors.
For the next several months, life at Google and the in Zagat division was great – great for Zagat’s fulltime employees as well as its newly hired contractors.
Contractors and employees alike indulged in Google’s at-work benefits, from free food and coffee, to Thursday night social events with beer and wine.
Both groups of workers were invited to Zagat all-hands meetings, where Hernandez and other Google executives presented the company’s strategies and took employee questions.
For a few months during the spring and summer of 2012, Zagat was a great place to work – even as a temporary employee.
But even then, the whole thing was unravelling.
The trouble didn’t start in Google’s New York office, where Zagat was headquartered.
It started all the way on the other side of the country, at Google’s headquarters in Mountain View, California.
It had actually started the year before, in 2011.
Small changes at the top
In the Spring of 2011, Google’s first CEO, cofounder Larry Page, pushed Eric Schmidt aside and began running the company again.
Page’s first move was to organise Google into a handful of large groups with one person in charge of each group.
Mostly, this was easy to do.
There was a YouTube group, an Android group, a Chrome group, and so on. It was all simple – until Page tried to figure out who should run Google’s advertising business.
Until that point, Google’s ad business had been run by two people, longtime Google veterans Susan Wojcicki and Jeff Huber.
Page wanted it to be run by just one person.
Who it would be was not much of a contest. Google had once been headquartered in Susan Wojcicki’s garage. Also, she is considered by many to be the best executive Google has. Because of those things, there is a saying at Google: “What Susan wants, Susan gets.”
In the end, Susan wanted to keep running ads. So Page put her in charge of the organisation.
That meant Page had to find a job for Jeff Huber.
He found one. A tough one.
Page put Huber in charge of a new group, called “Geo and Commerce,” which included a group of Google products including Google Maps.
Page did something else that that surprised many Googlers and Google-watchers.
In putting Huber in charge of “Geo and Commerce,” Page passed over Marissa Mayer, who had already been running Google’s maps business for several months. Page assigned Mayer to Huber’s group, as one of his direct reports. This seemed odd to many because Mayer had long been considered a peer of Huber’s and even Wojcicki.
Had Mayer been demoted?
How would she respond?
Dealing with Mayer’s wounded ego would turn out to be one of Huber’s easier challenges.
Unlike the other macro groups at Google, “Geo and Commerce” was a mishmash of products, including Payments, Wallet, Offers, Shopping, Local Search, Maps & Earth, Travel, and eventually, Zagat.
There was a theory behind putting all these products all together. It was something about how shopping is mobile and location-based, and maps are a key part of location. The details of the theory are unclear, however, even to Google executives.
According to senior Google executives we spoke to for a story last year, Geo and Commerce has always been considered a particularly difficult group to manage, for two reasons.
The first is that it is very large. With 2,500 people, it is the largest group at Google, not including Motorola Mobility. And that’s just full-time Googlers. The “Geo” part of the organisation – Local Search, Maps & Earth and Travel – has 1,100 full-timers and 6,000 contractors.
The second reason Geo and Commerce was hard to manage was that, while the “Geo” side was, by 2011, already a mature business with lots of successful products, the “Commerce” part was nascent.
This was a challenging combination, and before Huber had finished his first year running the organisation, it became a mess.
Eventually, Huber would step down from managing the group to go work in Google’s research and development lab, called Google X.
But before he could make this transition, several key executives in his group were fired or quit. For example, over one period of a few months, the entire team that launched Google Wallet exited the company.
Another executive who quit was Marissa Mayer. It turned out, to no one’s sup rise, that a small job didn’t suit her. She became the CEO of Yahoo! in July 2012.
In leaving, Mayer didn’t just quit Google. She also left Zagat behind, without a champion in Mountain View – just another “nascent” product among many Jeff Huber had to worry about.
This turned out to be a bad turn of events for a small group of Zagat editorial contractors in New York, who were, at that time, still holding out hope that someday they would become full-time Googlers.
They never would.
This started to become obvious by the middle of August 2012.
Meet your replacements
On August 14, 2012, Google announced that it had acquired travel-guide publisher Frommer’s.
Inside Google, the Zagat team held an all-hands meeting to announce the news and discuss Google’s plan for the acquisition.
It would be the last all-hands meeting Zagat’s editorial contractors would attend.
Technically, they were invited to one more meeting. The next all-hands. All of the Zagat contractors got an email about it. But then they got another email. It was a dis-invitation to the meeting.
Pretty soon it became clear to the Zagat contractors that all the fulltime jobs Google HR had hoped to give them had just gone to the editorial staff of Frommer’s.
After months of living the Googler dream, working at Zagat became miserable.
“It was probably the least happy place I’ve ever worked,” says one former Zagat editor, describing that time. “It was quiet as a tomb, and nobody was happy.”
Bernardo Hernandez was still trying to run the place, but Zagat’s editorial production kept missing goals. Originally, the plan was to “Zagatize” the world and produce 100,000 ratings for small businesses around the world. But then the goal was reduced to 50,000.
The Zagat contractors grew to resent the Frommer’s full-timers who replaced them. One Zagat contractor described the Frommer’s people as the kind who show up to work at 11 A.M. and leave by 4 P.M. Another Zagat contractor says it seems to him that the Frommer’s people don’t even want to work at Google.
“They want to write travelogues, which Google doesn’t care about. Google just cares about addresses.”
In December 2012, the awkward arrangement got much worse.
Google sent out a memo telling most of the Zagat temps that their contracts would not be renewed in 2013.
Many of them started looking for jobs.
Then, a few days later, Google sent out a second memo. Google would renew its Zagat contractors for another six months, through June 30, 2013.
This seemed like good news at first, but, in the end, it really wasn’t.
The first six months of 2013 at Zagat have not been good.
During this time, in fact, it has started to get weird.
The Zagat contractors say it seems like Google’s fulltime employees have been instructed to stop talking to them.
“The guy who brought me here stopped talked to me two months ago,” says one source. “He’s acting like I don’t exist.”
A few weeks ago, Zagat contractors had the office entirely to themselves for a couple of days, because Google had bused all its fulltime employees out to Montauk for a wine-tasting retreat. Morale was low during those two days.
Meanwhile, Bernardo Hernandez is no longer running Zagat. He may have quit. He may have been fired. It’s hard to tell at Google, says once source, because Google throws a party for everyone who leaves – even if they were fired.
If that’s the case, there have been many parties in the last couple weeks in Google’s Zagat division. Our sources say that as the Zagat editorial team’s final contract approaches its expiration date, the larger division is shedding people left and right. Huge cuts to sales and production staff were announced just last week.
“The future of Zagat book production looks extremely bleak,” says a source. “The whole division as currently structured seems to be on death watch. Lots of chatter about outsourcing.”
Though Google declined to comment for this article, it’s not hard to imagine the company is basically pleased with its acquisition of Zagat and the integration that followed.
From a pure business point of view, it’s easy to see why.
For a relatively small price – $125 million – Google now owns a strong brand in local restaurant recommendations. It also now has lots of content for location-based searches – a popular kind of search to do on mobile, which is the future of the Internet.
But from the perspective of the people who joined Zagat after Google acquired it, the whole saga is bittersweet.
The “sweet” part is that a group of editorial workers managed to escape the dying book industry for a whole year. They lived the Googler life – typically reserved for the country’s most elite engineers. One source did the calculation and figured out that he’s eaten $3,000 worth of Google’s food in the past year.
The “bitter” part is that these people really believed they were joining Google’s team permanently, and that they were going to do something big.
“Maybe I was a little naive,” says one of them. But, she says: “I’d never had a bad experience with big or small companies. I’d never been told something and have a company do something else.”
Says another: “I feel bad about it because I liked everyone I worked with.”
“That’s the sad part. Our bosses hired some good people. They did a really good job of hiring smart, pleasant people to work at this company. That’s why it felt like a real shame. It ended up not really being a benefit for anyone.”
The other hard thing for these people is coming to grips with the idea that they are never going to become fulltime Googlers.
Says one: “We’ve gotten a taste for what could have been a dream job and it’s now it’s a nightmare.”
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