Google would suffer from the same cost of hierarchy, but I think they
have another problem. They predominantly hire from academia and
creativity is frequently absent in that realm. This will probably be
Google's undoing, they hire PhDs to tweak their search/ad algorithms
but the gains are diminishing -- some startup of a handful of really
smart and creative folks are going to use their imagination to come up
with a different system that performs significantly better. But, then
again, I'm writing this message in GoogleMail, sending it to a
GoogleGroups list, while secretly wishing that I would get a chance to
work at Google. =D
(Sorry for error, just got up and haven't imbibed caffeine.)
</ocd>
Innovation requires risk so many people avoid it. A large
organization could envelop many high-risk teams -- provide support in
exchange for a percentage of profit. This is what the new wave of VCs
are doing: give less to more.