When Google Moved To The Docks

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An excerpt from Silicon Docks: The Rise Of Dublin As A Global Tech Hub, edited by Pamela Newenham (Liberties Press).

One of the many elements of David Denby’s job is spotting plot holes. Narrative problems are exposed and ill-conceived character decisions highlighted to his readers.

This is perhaps one of the main reasons the New Yorker film critic can barely comprehend the logic he employed within his dot-com bubble diary, American Sucker. Denby, a sometimes investor, wanted to make $1 million on the stock market to buy his soon-to-be ex-wife out of their Manhattan condo in 1999. To do so, he invested heavily in tech shares. He lost out. Badly. Denby, though, was far from the only sucker in town. The end of the 1990s and the start of the next decade was a time littered with tales of investments gone wrong.

Another man whose name is almost always thrown into the mix when discussion turns to dot-com-era mistakes is George Bell, the former chief executive of the online news source and search engine Excite. In 1999, he decided to decline an offer to buy a company by the name of Google for $750,000. Moreover, this was after the asking price had been brought down from $1 million. Google, as a large portion of the globe knows by now, was founded by Stanford students Larry Page and Sergey Brin in 1998. It was their second stab at creating a search engine after another – which went by the moniker BackRub – suffered bandwidth issues.

Andy Bechtolsheim, the co-founder of Sun Microsystems (a company which played a bizarrely large part in getting Google to Ireland), was their first investor, writing Google a cheque for $100,000 before the company was even incorporated. At the time, very few people seemed sure of which web companies had potential for growth and which were built on sand. A number of European countries decided to withdraw foreign development offices from Silicon Valley, wary of getting involved with another dot-com-type blowout.

The IDA stayed though, with the agency’s director of operations in California, Dermot Tuohy – described, in a complimentary sense, by one person who met him at the time, as a ‘grizzled veteran’ – and others in the organisation convinced there were still plenty of potential partners for Ireland in the area. The agency kept knocking on doors in Silicon Valley and elsewhere in the region, with companies such PayPal, eBay, Overture (which would later become part of Yahoo!) and, of course, Google on their radar.

In the case of the latter, the IDA’s recently hired vice president for business development at their offices in San Jose, Noel Ruane, cold-called newly installed chief financial officer George Reyes in August 2002 to start the ball rolling. Ruane left a message that he’d be back in town soon after. Not yet a full-time resident in the area, Ruane returned in September, this time leaving a message with Reyes’s assistant and eventually grabbing a meeting with a trio comprising Reyes, corporate controller Pietro Dova and Ian Cunningham, a consultant the company employed for its site-selection committee.

The IDA’s efforts continued as other divisions, including the newly-formed Strategic Business Group, led by Denis Molumby, believed strongly in the potential of the company which has since become a verb for web searches, never mind one of the biggest names in Silicon Valley. Gus Jones was assigned to work on the Google ‘account’, while back in Dublin, with the development agency now convinced it wanted to get the company to the Irish capital, John Bolton acted as project manager for the operation.

The Google they were trying to woo at the time had 500 employees and relatively modest (compared to now) revenue of $40 million per annum. Combined with efforts on the IDA side, recommendations from senior Google staff members who had previously done business in Ireland convinced the company to take Dublin seriously as a potential location for its European headquarters. In October 2002 Google sent that same trio of Reyes, Dova and Cunningham to Dublin. The itinerary that followed was, according to the IDA’s Jones, ‘typical’ of the kind that had attracted previous technology companies to Ireland.

They went to visit the Dublin bases of companies like HP, Symantec, SAP, Oracle and Citibank, as well as a number of data centres in south Dublin, which, for the most part, had been mothballed in the wake of the dot-com crash. The visit focused mainly on suburban office parks, as, up until this point, all major technology brands which had set up shop in Ireland had done so on the outskirts of cities. Bolton remembers that after that visit, Reyes was positive about the idea of coming to Ireland. Both Reyes and the company’s chief executive, Eric Schmidt, were among those senior Google figures with Irish business experience from their time with Sun Microsystems, which had an engineering base in Dublin.

Switzerland Beckons

However, this was a two-city race for Google and for Dova, the company’s corporate controller, the preferred destination was the Canton de Neuchâtel in Switzerland. Contact continued between Google and the IDA over the coming weeks but, eventually, the news filtered though that the company had chosen to go with Switzerland. In addition to Dova’s support for the decision, several of Google’s backers had Eastern European heritage and liked the idea of the company’s European headquarters being closer to that region.

That’s what they told the IDA, anyway.

Nonetheless, the agency’s representatives in Dublin and California decided they weren’t going to accept the decision. They continued to press Ireland’s case on several fronts, with those mothballed data centres and Ireland’s favourable corporate tax regime front and centre in their arguments.

At the time, a data centre to meet Google’s needs would have cost in the region of €50 million to build anywhere in Europe. Those gathering dust in Dublin were available for somewhere in the region of €5 million. Considering Google’s relatively limited financial muscle at that time, it was a facet of the Swiss decision that didn’t make sense to some within the company, as there were apparently no available data centre facilities in Neuchâtel. Google thought about it, but still decided that the best they could do was promise that, when they were setting up their next site in Europe, Dublin would be at the top of the list. Again, it was a viewpoint the IDA couldn’t agree with. Previous experience with companies which settled in Ireland such as IBM, Microsoft and Intel indicated that once a company set up in a country, it expanded there. They doubted that, if Google ploughed funds into an operation in Neuchâtel, it would choose to start afresh in Ireland a few years down the line, rather than building on its investment in Switzerland.

Jones continued with requests to meet some of Google’s top executives and, eventually, he got to sit down with some of the decision-makers in the company’s Mountain View offices in California. He put Ireland’s ‘clear, upfront’ tax regime on the table as a positive against possibly negotiating rates in Switzerland. He introduced them to a US company which had offices in Ireland that were thriving, while a larger Swiss arm of the company struggled to justify its existence. With enough doubts planted in the minds of the people opposite him in the boardroom, Jones would soon get confirmation that Google was to revisit the decision.

On 8 January 2003, an Austrian by the name of Gerald Aigner arrived to inspect those near-vacant data centres in detail. Aigner’s employers required persistent questioning and almost clinical examination of the facilities, and one data-centre manager apparently communicated to the IDA complaints about the Austrian’s behaviour. But dealing with Aigner, described by I’m Feeling Lucky: The Confessions of Google Employee Number 59 author Douglas Edwards as Google’s ‘flaming sword of frugality’, was more than worth it. By the time he left Ireland on 10 January, the company had all but decided it should take space in three of the available data centres.

Then, on 19 January, some of Google’s top brass arrived in town. The visiting party included Reyes, Cunningham, George Salah, who was vice president for facilities, board member David Drummond, vice president of global online sales and operations, Sheryl Sandberg and Adam Freed, who headed up the company’s international product-management team. Jones picked up Sandberg and Freed from Dublin Airport, as the pair had arrived on a later flight than the rest of the group. He finds it funny to look back now and see the influence the pair would have in bringing more employment to Dublin years later in their subsequent roles with Facebook and Etsy, respectively.

The group from Google looked at business parks in Cherrywood, Parkwest and Citywest in the south of Dublin, as well as Eastpoint and Blanchardstown in the north. Back in the city, they viewed the Digital Hub, a modern workspace close to the city centre which now houses 900 people and is the location for the European headquarters of companies such as Eventbrite and Etsy.

Google’s property advisors at the time also alerted them to an alternative location, identifying the potential of a number of buildings on Barrow Street owned by developer Liam Carroll. Walking distance from the city centre, the location was seen by the company as having the right mix of factors to attract the type of employee they wanted in Dublin. In their California offices, Brin and Page had encouraged a college campus-style atmosphere, the likes of which was alien to Irish offices at a time when a foosball table in the canteen was about as leftfield as companies were willing to go. The visitors decided that, once the building – which was still under construction – was complete, they would rent 60,000 square feet of Gordon House on Barrow Street. It’s a choice that is still seen by those in the IDA as a seismic shift for investment in Dublin. One which they, and many others, including senior Google employees, feel was directly responsible for many other Silicon Valley names, such as Twitter and Facebook, choosing to set up shop nearby.

To bookend this particular scouting mission, the president of Dublin City University, Ferdinand von Prondzynski, hosted a dinner on 21 January 2003 for the visitors, and the decision was virtually confirmed that night to IDA officials. Nine days later, the Irish Times reported that the delegation’s visit indicated a deal was close for the company to set up a European sales, marketing and technical-support centre in Dublin. This wouldn’t be confirmed for another six weeks, though, with estimates suggesting that the company could employ just over 200 people once it moved into Barrow Street. Now the hard work began.

In April 2003, another ‘landing party’ came to the Irish capital to begin to build a team. It consisted of Freed and Bryan Schreier, who was at the time a senior director for international online sales and operations. The pair sat in a rented office on Harcourt Road, interviewing potential candidates over the course of three days, from 8 am to 6 pm. Online and newspaper adverts for the roles only mentioned a ‘leading online search engine’. But, in the aftermath of the headlines that followed Google’s decision to choose Ireland over Switzerland, it was clear to everyone who walked through the door what company they’d be working for.

Google’s First Employees in Ireland

Oisin O’Mír, Aoife Wynne, Caroline Dowling, Matt Doris and Janice Azeb were among the dozens upon dozens of candidates to sit in front of Freed and Schreier. Each was called back a second time. Come the following Monday morning, they would be the five people that made up Google’s Irish office.

For anyone who has taken a stroll through the company’s current docklands base, viewing the facilities that greet the 2,500 or so Googlers (yes, the term is used in the office alongside ‘Googliness’ and other variants), it’s hard to imagine the initially tiny remit of the company’s operations here. Today, as you go from floor to floor, you’ll pass a restaurant serving food from around the world, you’ll see all manner of games – from chess to pool – being played, and you’ll notice a gym, a swimming pool, gaming consoles, toy cars rumbling along the floor, wonderful views of the city and a glass skybridge that connects three of the company’s four buildings in the area.

The original offices on Adelaide Road were at least dotted with the odd lava lamp and some artwork on the walls. The five recruits were watched over by Christie Cooley, a trainer with the company who had been brought over from California. Their original day-to-day work involved deciding whether to approve ad after ad after ad. They examined keywords and reviewed whether each possible advertiser’s website stood up to existing policies for Google AdWords. A repetitive, basic pattern to their workdays began to emerge. That relative quiet and moderate monotony would quickly become a thing of the past with the commencement of a hiring blitz.

What was once considered an incredibly spacious office for five people saw wave after wave of new recruits start to pour in on a monthly basis as the promise of larger digs on Barrow Street grew closer. Alongside reviewing ads, workers were soon asked to help out on facilities work, unpack and assemble desks, chairs and cabinets, get servers up and running, make supermarket runs for sandwiches, and even head to DID Electrical to buy a fridge. Those waves of hiring were based around getting multitaskers, people with the ability to adapt. Eight to ten interviews were often required for senior employees. When recruiting German, Dutch or Spanish employees, Google went to Berlin, Amsterdam and Madrid, speaking with recruiters there, finding the best people each city had to offer, and bringing them back to Dublin.

Regular visits from senior executives saw positive reports going back to head office in California. As the ‘insanely quick’ – as one employee puts it – hiring drive and expansion of the Irish office’s remit continued, the original offices were soon packed, with almost every desk shared by four workers. Each conference room was filled up by a dozen or so more individuals, and even some floor-space was occupied by employees huddled over laptops, warning those walking by of stray extension leads, and hoping no one stepped on their lunches. The company took space in a larger but ‘somewhat dingy’ office at Seagrave House on Earlsfort Terrace. Numbers swelled and, while there was an appetite to foster the collegiate atmosphere the company’s founders traded on, in these early days there also was an ambition to do something other than simply recreating the atmosphere of the California offices minus the sunshine.

The flow of employees from different cultures around Europe created what those in the company at the time say was a unique atmosphere compared to other multinationals dotted around the country. With a huge number of new hires arriving in Ireland for the first time, the social element of the company became hugely important. The fridge housed bottles of beer each Friday for staff to sip as they talked over the week before. Sandberg, described by colleagues at the time as a ‘very clear thinker’ and a remarkable delegator with a tremendous ability to listen, was a regular visitor to Dublin. Indeed, she once livened up proceedings at Thank God It’s Friday (TGIF) drinks by gathering everyone in the company around to meet a visitor to the offices. Out walked U2 frontman Bono. Whatever feelings some employees may have had towards Bono at the time, it still impressed most of those gathered that Sandberg could call on him to give a speech over Friday evening beers.

By March 2004, the company’s California offices had moved to larger digs at 1600 Amphitheatre Parkway in Mountain View, a building christened the Googleplex. August 2004 saw the Google unveil its initial public offering. That winter, progress marched on in Dublin too, as employees finally moved into the second floor of Gordon House on Barrow Street. They walked through the doors on the first morning there to be greeted by a building that, outside of the space they would occupy, was said to be a ‘complete construction site’. They saw construction workers plastering walls and painting ceilings. Everywhere except the second floor was a hard-hat zone. There was a lack of light in some corners, and one area of the office was called ‘The Pit’ due to its murkiness in the first few days. As each new set of ten, twelve or twenty desks was opened up, there was a stampede to claim them.

On 7 October, the company formally opened its European HQ on Barrow Street, with Tánaiste Mary Harney welcoming Brin, Page and other senior Google executives to the country. Workers were said to be buzzing around the offices on motorised scooters. Brin said his original thoughts about coming to Ireland were ‘that we would have easy access to Guinness and it was the closest stopover en route to Europe from California’.43 At that point, the company employed more than 150 people, with numbers increasing weekly. In January of 2005, a global company conference in San Francisco saw the vast majority of the Dublin office decamp to California, where they hit the ski slopes in the north of the state, near Lake Tahoe.

Herlihy Becomes Head

The company’s sheer size was emphasised by the fact that the trip meant they booked up the whole resort for three days. It was on the slopes there that many of the company’s employees first had a chance to speak with John Herlihy, the new chief of the Dublin offices.

Having lived in California for twelve years and watched the tech industry bounce back from the dot-com meltdown, Herlihy said it wasn’t until 2004 – as Web companies actually started to make money as opposed to just being intriguing opportunities – that he decided it was an area he wanted to involve himself in. Herlihy had worked at companies including Adobe and Oracle during his time in the US, but the Limerick native felt it was time to head home. In late 2004, he met Sandberg and other Google executives and began to discuss the idea of heading up operations in Dublin, taking on the role of director of online sales and operations for Europe, the Middle East and Africa (He is now the vice president of Google’s global advertising operations). There followed what reports have described as a gruelling, twenty-part interview process to confirm he was the man for the job.

By the time he was in place and skiing in Tahoe, Herlihy was certain that the offices he had taken over had a lot more to give. In conversation, Herlihy remembers a company that at that point was hiring talent capable of much more than what was being asked of them. He began to talk to Sandberg about the possibility of increasing employee numbers and the remit of the Dublin offices. It was a visit from the executive chairman, Eric Schmidt, to a rainy Dublin in late January 2005 that proved pivotal.

Over dinner on the 27 January, Herlihy talked to Schmidt about the possibilities that Dublin presented in terms of sales and technical expertise, emphasising the increasing revenue that was being created from the European HQ. Herlihy said the opportunity to attract the right talent to Dublin was greater than they had imagined. With a young, talented, multilingual staff ready to expand into new markets, it was time to take a gamble.

Herlihy wasn’t sure how Schmidt would take to the idea. Having seen the company grow from the initial five people checking ads to where it was on that January day, Schmidt told Herlihy to go back to the owners of Gordon House, take the whole building, increase the remit of the Dublin offices and hire as needed. Suddenly, as Herlihy tells it, they went from a situation of having one ‘half-kitted-out’ floor of a building to being able to create a long-term plan. Instead of his collection of young, capable managers being asked to take responsibility for sixteen or seventeen different things at once, they could concentrate on a few key functions as the overall management team scaled up drastically within months.

Despite Schmidt’s decree that all of Gordon House could be rented out, there was discussion about moving some, or all, of the company’s functions to an alternative site outside the city centre. Eastpoint Business Park, Blanchardstown and Citywest were discussed, with Herlihy saying there was a ‘definite’ opinion formed by some within the company that they were best-served to move to a more easily scalable premises away from the docklands. Herlihy spent quite a large amount of his time convincing those dissenting voices it would be the wrong thing to do. He argued that a young workforce, full of people quite often new to the city wanted to live and work there.

The decision was soon made that Barrow Street offered enough room to expand. That December, Herlihy announced that the Dublin operation was increasing its employee base by a massive 700 people, pushing the number above a thousand for the first time, as it looked for ‘graduates with technology or languages qualifications’. Amid great fanfare the following November, it was announced that, over the coming twelve to eighteen months, another 500 sales, customer-support, IT and management jobs were to be created. However, there seems to be some overlap with the previous announcement, as estimates said this hiring push would bring the number of employees on Barrow Street to approximately 1,300.

Those who worked in the company at the time don’t remember anything resembling the thriving tech community that now runs through the docklands. They do remember having to get used to Google’s policy of ‘deliberately enforcing change’, as one employee puts it. Shaking up departments and responsibilities to keep people on their toes, just when they had become comfortable within their jobs, was a regular occurrence. Employees were encouraged to raise any ideas, concerns or queries with senior managers. Even the most senior. Top management in Dublin were copied in on emails from Irish employees to Page and Brin, a development which sometimes elicited initial panic, but which almost always saw a positive response forthcoming.

The company continued to expand its workforce in Dublin throughout Ireland’s latest recession, and this era saw Google’s offices in the docklands expand to include not only Gordon House but also Gasworks House, for a combined annual rent of about €8 million. In 2011, the company made a decision to purchase its entire Barrow Street campus as well as two other buildings in the area. For a combined €226 million, the deal included the Montevetro skyscraper – Dublin’s tallest commercial building – as well as the Grand Mill Quay building. An impressive glass bridge linking the Montevetro building with Gordon House and Gasworks House is now one of the most recognisable features of the docklands.

By autumn 2012, the company’s Dublin workforce had reached over 2,500 people. Early the following year, the company helped boost the infrastructure behind Gmail, Google Maps and the search engine itself with a €75 million investment in a new data centre in Profile Park, Clondalkin, employing thirty people.46 The company continued its investment in Ireland that year with the creation of The Foundry, a 15,000-square-foot digital innovation centre costing €5.5 million.

The Issue of Tax

For every investment the company makes and every euro it ploughs into its Irish operations, it’s likely that the first public response will be to ask just how much tax Google is paying. With Ireland’s corporate tax rate of 12.5 percent – less than half the rate in some other European nations – an established source of ire from other European countries as well as the US, there’s no doubt it has been a large part of the conversation for companies arriving into the docklands and other areas.

Google, Facebook and Apple, in particular, have come under scrutiny from a variety of world leaders and politicians over their decisions to base much of their tax affairs in Ireland. That Google is one of the most profitable, visible and established American companies in Ireland availing of the tax regime here does ensure plenty of questions about it whenever Herlihy is interviewed, or any time one of Google’s senior executives arrives into Dublin.

The machinations of Google’s tax dealings in Ireland are undoubtedly complex. In November 2005, the company said it had ‘significantly lowered’ its global tax bill for the first three quarters of that year by about €100 million, thanks to its Irish operation. This was at a point when turnover for the Irish operations stood at €603 million for that period. An after-tax profit of just over €2.7 million was announced, with the company reported to have paid corporation tax of €1.6 million. In September 2013, it was reported that Google Ireland’s turnover for 2012 was €15.5 billion, and that it had made pre-tax profits of €137 million. The Irish arm of the company paid €17 million in corporation tax in 2012, leaving after-tax profits of €120.2 million.

Google’s most recent accounts, filed at the Companies Registration Office in July of 2014, show the company’s revenue climbed 10 percent in 2013 to €17 billion, with pre-tax profits of €189.1 million. Google paid €27.7 million in Irish corporation tax during 2013, and after-tax profits were €154.5 million. Google’s Irish unit reported ‘administrative expenses’ – royalties paid to other Google entities – of €11.7 billion for 2013, up from €10.9 billion in 2012.

Google Ireland won’t say that tax isn’t a deciding factor and that it doesn’t come up in conversations whenever they’re thinking about expanding here. What they definitely will say is that as a business they have to make a profit, and low taxes only help in that endeavour.

Access to talent, though, is the mantra for any company member asked about the tax question. Ireland, of course, has seen an all-too-steady flow of young, talented workers filing up in airport queues to move to Australia, New Zealand, Canada and beyond during the aftermath of the 2008 bank bailout and the recession that followed. However, the company never struggled to find the right talent, with an estimated two-thirds of the Dublin employee base coming from outside Ireland. Taxes are low in Ireland for a company like Google, but they argue that’s a situation that could change, and they would still be likely to remain in Dublin, in an environment that gives them access to several markets, a time zone that suits the idea of a 24/7 business (since Ireland is, for the majority of the year, eight hours ahead of Mountain View), and an established batch of employees.

The government set the rules, they’ll argue, and state that Google will adhere to laws in any country in which it operates. Ask the main people at the Irish offices of Apple, EMC, Intel, LinkedIn and Facebook the same question and you’ll likely get the same answer. One Google employee said it’s akin to the current motorway speed limit here of 120 kilometres per hour: if that’s what you’re allowed to do, then that’s what you will do. Google seems to have slowed down after its early bursts of hiring, and the company has sat with an employee base of between 2,500 and 3,000 for some time now. Will it expand? There’s certainly room to do so on Barrow Street. The company says that where it can acquire more customers, it can create more demand for work.

As the European economy and, in particular, Ireland, ekes its way slowly out of recession and further away from the latest economic downturn, positive business forecasts should hopefully equate to more money moving around out there for Google to earn and, in turn, create opportunities in Dublin.

In the Dublin office now, more than sixty-five languages are spoken by employees from sixty different countries. They’re having to speak about all types of Google innovations too. These days, the company is involved in areas as varied as modular mobile phones and intelligent home heating, to wearable devices and gesture recognition.

Although its tax position raises eyebrows in many quarters, the company has been a hugely positive presence in Ireland and, in particular, the docklands. Aside from the time Google wiped Herlihy’s home county of Limerick off the map, things have actually been relatively controversy free. Well, they didn’t actually annihilate an entire county, to be fair. They were simply accused by a local politician, Fianna Fáil TD Niall Collins, of denying Limerick’s existence on Google Maps. It was, however, just a slight technical hitch with the tool’s zoom function. Google’s expansion plans for Ireland aren’t quite that drastic.

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