November 11, 2010

Leak Corporate Data, Get Caught, Get Fired.

After an "anonymous loyal reader" tipped Business Insider on Tuesday to an internal memo from Google saying the company was rewarding employees with both a cash bonus and a raise, news broke Wednesday that the leaker, a Google employee, had been tracked down within hours, and fired. With all proper sympathies to somebody who just lost their job, there can be little flexibility in this regard - for if the person cannot be trusted with information deemed confidential and secret, they shouldn't have a home in a place where strategy and secrets are required. This becomes especially true at a public company like Google, a company that works on many future projects at once in a competitive market.

While the impetus to the reported pay increases is being debated, you can see Google (and other companies that face the same issue) really has little choice.

Unlike Yahoo!, which is leaking like a sieve to smart journalists like Kara Swisher, who seems to have every internal memo that leaves Carol Bartz' desk, Google traditionally has been very good about keeping most of its internal news under wraps, with few exceptions. Their launch of the Google Chrome Web browser caught practically everyone by surprise two years ago, as did their introduction of robot cars just last month. Other projects, like their next iteration of social, and the Nexus One, are discovered, but usually, details are few and far between. So the full-on e-mailing of an internal memo to a blog was a big breach indeed.

The practice of sniffing out rumors around Apple's future announcements has practically spawned an industry. Just prior to Steve Jobs' arrival, leaks were so common that the actual news was boring and anticlimactic. Since Jobs' return, official leaks have practically been extinguished, and violating blogs and anonymous commenters have been sued. The absence of leaks adds to the showmanship and impact the official unveiling of new products and strategy can have, and can help companies avoid the Osborne Effect, which can happen if new products are discussed before the old ones are done shipping.

As a veteran of corporate communications and PR teams at tech companies in the Valley, the usual process for speaking to press is handled by a select few people who know their roles and range. Those found speaking out of turn are challenged and, if necessary, removed, if they cannot be reigned in. During dark days at one startup where I worked, we were under siege from anonymous commenters who trolled industry Web sites saying we were days or weeks away from going out of business. Rumors of layoffs were mentioned, with little merit. But amidst the negative BS, there were elements of truth, with clear insider knowledge that had to be coming from people inside the company - directly or otherwise. At an all-hands meeting, our CEO addressed the anonymous attacks and warned that if anyone were in the room participating in the practice, they would be asked to leave. Eventually, the posts stopped.

As someone who also covers tech companies, I can understand the intrigue of happening on a big story, or an "exclusive" that can raise headlines, have people discussing your scoop, and rave about your access. Access to key people is a major reason why some blogs get traction and others don't. Access to information that is made available without permission can be fun too, if you know where to look. But forwarded internal memos from public companies are cheap - and the people sending them out to the press have a misguided perception of their own importance ahead of loyalty for the company. Leaking internal salary bumps endangered the company in terms of possible disclosures to the SEC, and immediately alerted competitive companies in the Valley that they too may need to adjust their hiring approach to job seekers. This lost element of surprise negates much of the benefit and simply can't be tolerated.

The good news is that the person who made this clear mistake has not yet been outed. For their sake, I hope they stay anonymous, learn from the error and find a new place quick where they don't find the need to play the part of press quite so inviting.

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