Google's departure from Valley stirs debate

by Andrew Johnson - Sept. 22, 2008 12:00 AM
The Arizona Republic

Was it us, or them?

Some Valley technology entrepreneurs have asked that question since Google Inc. announced plans Friday to close its Tempe office by Nov. 21.

Most economic-development officials attributed the search-engine giant's departure to an internal company decision, not a deficiency in metro Phoenix's talent pool.

The company said moving some of the employees in the office to other Google locations will increase efficiency.

But some well-networked entrepreneurs question the message the decision sends to Arizona's technology industry.

Aaron Post, director of business development for Chandler-based marketing firm Forty Agency, said colleagues he talked to took the news as a setback.

Google, which employs about 50 workers at its office on Arizona State University's main campus, first announced plans to come to the Valley in 2005.

Some local software developers thought the Mountain View, Calif. company's presence would shed light on the burgeoning startup community that has taken shape in the Valley.

They hoped that perhaps, venture capitalists would pay closer attention to the innovations taking shape in Arizona and invest more frequently in companies based here.

Post said he and others took the company's decision as a signal that more needed to be done to highlight progress in the technology community.

Aaron Bare, chief executive officer of Scottsdale-based CareerTours, said the belief that Google's arrival would somehow jump-start the technology environment here was misguided.

He noted that the positions housed at the Tempe office - engineers that worked on finance, billing and other internal matters - weren't the type of jobs that would necessarily elevate a city's status as technology hotbed.

One reason why Arizona lags when it comes to venture-capital investments, some business owners say, is that much of the investments are going to later-stage technology companies. A large part of the Valley's technology base is startups.

"I think we definitely need to facilitate in getting the venture capital moving in this market by having more success stories," Bare said.

Bare's company, which creates online recruitment videos for businesses, received $1.2 million in venture capital this year. The company is considering additional investment offers worth as much as $3 million, he said.

"We just need more successful startups to come out of Phoenix and really create a Silicon desert," Bare said.