This post has moved. An updated version is on my Medium here: Timeline: Employee Count Growth for Microsoft, Yahoo, Google, and Facebook
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About Me
Gabor Cselle
San Francisco, CA
San Francisco, CA
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I work at Google, where I'm a Partner at Area 120. Previously, I worked at Twitter on trends, the logged-out homepage, and on MoPub. Twitter acquired our startup Namo Media in June 2014. Before Namo, I was a Product Manager at Google working on Google Now, Android and Gmail. I started reMail, a mobile email startup which was acquired by Google in February 2010.
Before reMail, I was the VP Engineering at Xobni, where we invented a popular plugin for Outlook, and a Software Engineer at Google. I have an MS degree in Computer Science from ETH Zurich.
Gabor Cselle Bio
25 comments:
Interesting stats. Must have been a lot of work to get all the data.
From a friend's e-mail who reviewed this post:
"I'm not sure the comparison with Microsoft is valid, ideally you'd have numbers just for msn, not all of Microsoft. Microsoft is very different than most companies. One of my profs described it as 'A bank that happens to also make a bit of software' because they have so much cash."
I agree that a comparison to MSN would be better. However, the numbers are hard to come by. Also, isn't Google seen as "the next Microsoft", i.e. shouldn't it follow the MS growth curve? :-)
So I guess that means that for GOOG to come to parity, it would have to go down 75%... which leaves it at about ($350 * 0.25)= $87.50.
An alternative interpretation is that GOOG can hire another 15000 employees before it has reached the right size :-)
I agree. Unfortunately, I have very little data about the first couple of years of Yahoo. There's just nothing to be found about that on the Internet. I posted a question regarding this on Google Answers a couple of days ago, but so far no answers.
Google and MS aren't really that comparable because MS really only took off in 1981, which I think coincided with the introduction of MS-DOS.
in its first two years yahoo was still under two hundred employees, i think #100 started in august 96. also i think your number for them now is low, i know 13,000 christmas gifts were bought this year, not sure how many extras, temps, contractors and outsiders got these....
Your numbers are a bit off because Microsoft and Google employ a lot of contractors (Google is chock full of contractors), and they are not listed as "employees".
Dear Anonymous (#2), thanks for the data point you provided (Yahoo: 100 employees in August 1996). I added it into the Excel chart and it fits nicely with the other data. Didn't update the charts in the blog, though.
Yes, the contractors not being counted is a huge problem, and would probably make growth rates seem even higher.
good post...wall street does not care much about market value per employee. Much more relevant are revenues and profits per employee, and their trendlines.
Great post dude,
Where did you get all the numbers?
Cheers!
Kiltak
[Geeks Are Sexy] Tech. News
Kiltak: All sources for the numbers are in the Excel spreadsheet I linked to.
Anonymous (#4): I agree that Wall Street doesn't care that much about market cap / employee. The valuation is, indeed, determined by future and current profits. Plus maybe a bit of substance value e.g., for a real estate company owning half of Manhattan.
I listed market cap / employee because it's very interesting in comparison to YHOO and MSFT, not because it's interesting for Wall Street.
Although it’s interesting I feel that you're using the wrong metric to value the employees of these companies. Market capitalization to employee count is interesting in that it shows what the investing public thinks of a company, but a more accurate depiction would be how much revenue (hence value) each employee is adding to the company. For instance Google does about $875,000 per employee, Yahoo! does roughly $483,000 per employee and Microsoft does about $630,000 per employee. All things being equal - Google seems to be proportionately (I didn't say accurately) valued but there's definitely a discrepancy with Microsoft.
OOOH I GET IT! Digg has my post on the first page, with a strong emphasis on the market cap / employee number.
Again, I agree with the previous commenters: I realize it's not superimportant for Wall Street, but it's a very interesting metric in comparison to YHOO and MSFT.
Well, what matters most is not how many employees each has, but of what quality.
Like, MS has so much cash with them for so long time producing no real returns, Warren Buffet would have tripled it in 10 years;)
Dinesh K
One caution regarding headcounts - bigger is not aways better, particularly when it comes to legacy costs for retirees and other long term obligations. Bigger is only better if efficiency levels are compareable. For your model you are probably right though, "ceteris paribus."
"...For instance Google does about $875,000 per employee, Yahoo! does roughly $483,000 per employee and Microsoft does about $630,000 per employee. All things being equal - Google seems to be proportionately (I didn't say accurately) valued but there's definitely a discrepancy with Microsoft."
Any idea where craigslist and eBay would fit on this metric?
I believe Craigslist has about $25 million in revenues and 19 employees, so they would come in at more than $1,250,000 per employee.
It has been estimated though that their revenue will double almost overnight as a result of the latest move to charge realtors for listings in NYC (I don't believe this is likely to increase their head count at all).
They are an awesome company.
Very cool. Thanks for sharing the info.
Even though Google seems like a big company now, they are still just a gnat compared to the MS monster. I hope they don't get crushed.
Interesting numbers, but as others have pointed out, this isn't the right way to approach the comparison.
Others have mentioned that there are valid reasons to compare MSN/Live.com and Ad efforts against Goog.
What you're also missing is that to support a company of this size, there are a number of non-engineering positions ranging from receptionists to facilities staff to security personnel to call center operators that are essentially commodity headcount and therefore would invalidate comparisons against smaller companies that are inherently more engineering and other IP generation centric roles.
I believe Y! #200 was in May of 97.
Dear Marc (Mercuri),
you have some very good points.
Unfortunately, there is no publicly available employee count data on MSN or Live.com.
Still, I think the comparison is valid. Google is building an empire around the Internet. Microsoft, a generation before, built an empire around the desktop. In GOOG vs. MSFT, I'm comparing empire builders, not web companies.
Your second point is very interesting. But shouldn't the number of facilities people should grow proportionally to the total number of employees? 100 employees, 3 facilities people. 1000 employees, 30 facilities people.
Similarly, the sales force and call center staffing, probably grows in proportion to total revenues.
An exception are very small companies such as when Fog Creek was 2 people and Joel had to fight Michael Pryor about who has to take out the trash.
But I'm not really comparing small companies with large ones. Rather, I'm comparing the growth profiles of companies that have almost always been in growth mode.
Gabor
Update: An article in Baseline magazine puts the "knowledge value" of each Google employee at $16 million, slightly less than my estimate of $19 million. The difference comes from their deduction of Google's tangible assets from the market cap, which is a good idea.
Gabor
70K folk at MS means the company is the size of a town - and it can have the same gravity. The size of MS means that it is predisposed to apps that are suited for the individual user (lots of programmers at MS scratching their own itch), large enterprises and departments (MS is its own best customer), large teams of developers - and not much in between.
Hi Gabor. This is your most popular post! Congratulations! This is almost a brand! I read it on 2006 and used your information (quoted!) for a presentation about the MS vs Google endeavor. May be it's time for an information update, don't you think so? After 18 months may be you could find a trend.
Alos, it would be interesting, how many employees really have, Facebook or Twitter
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