Google: What do 80,000 employee bets say about its future?

Will Google open its Russian office on schedule? Will Gmail users use search more? How many Gmail users will the company accumulate by the end of 2007? Will Harriet Meyers be confirmed as a Supreme Court Justice?

These are but some of the questions that Google has asked its employees over the past two-and-a-half years as part of an effort to track the opinions of its employees. In that time, more than 1,500 employees have bet on the outcome of 280 such questions as part of the corporate predictions program.

The purpose of the effort, which lets employees make bets using fake "Google money," is to determine employee opinions on questions like how much demand there will be for a future Google product or how the company will perform during a period of time, said Bo Cowgill, Google project manager. Employees with the most successful betting results are awarded t-shirts or checks, Cowgill said during the O'Reilly ETech 2008 conference here today.

Betting records are not shared among employees, though management has access to the bets of individual employees.

"The reason we did it was to try to get better information about what our employees thought," he said. "If you let people bet on things anonymously, they will tell you what they really believe. This is a conversation that is happening without politics. Nobody has any incentive to try to kiss up or fudge the numbers."

Because Cowgill and the others running the market know who is betting and how - Google has mapped out the GPS coordinates of every employee's desk worldwide - they are able to analyze the predictions of individual employees to find out what factors make a bettor successful.

Cowgill said that he and his team have found that the biggest indicator of how a person will bet and their success or failure of those bets is where they sit in an office.

Even people who sit together but don't work together bet the same, he said. "We have evidence of persistence of relationships," Cowgill said. "There's a persistence of relationship that is going on. I will continue to trade a little bit like [a former office mate] even though we don't sit together anymore. Space matters - that is kind of the bottom line."

Usually within 1.5 months of moving into a new office with someone, an employee will start betting like his or her office mate, he added. But within even a week of moving in to a new office, a person "starts to show glimmers" of betting like the new office mate, the analysis found.

Cowgill noted the irony of this considering that Google's bread and butter is products that allow geographically dispersed people to communicate better.

The analysis of the results also found that Google employees are more likely to make the right bet than the wrong one, he added. In addition, the rank of a bettor within the company had no affect on whether a bet was won or lost, he said.

Cowgill did note that the study of betting patterns did turn up some biases among employees. For example, employees - especially new hires - were more likely to overprice bets on matters that would be good for Google, Cowgill said. In addition, betting analysis showed that bets made following a rise in Google stock price tended to find bettors predicting good things for Google.

"All of a sudden they start betting on things that are good for Google in a way that is probably not entirely rational," Cowgill noted. "It doesn't exactly make sense to say, 'Google stock has done well, therefore we are likely to get a bunch of users in the future or open an office on time.'"

The company is now planning to start analyzing how a person's knowledge of or work on a particular product affects their betting, Cowgill said. For example, he added, the company is looking to find out whether employees who work on a certain product is more likely to make an objective - and correct - bet or are more likely to "drink the Kool Aid" and have a biased view of any possible shortcomings.

"The idea is that we can extract information from [employees] to improve business decisions," he added.? "The whole point of the exercise is for people to be able to express their true beliefs."

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