Michael B. Duff

In 2004, Google was the coolest place on Earth.

Google became famous for providing outlandish perks to its employees — free food, free haircuts, a wide-ranging shuttle bus service — even free massages for overworked programmers.

Originally, these perks were justified as a way to enhance productivity. If someone from the company is doing your dry cleaning for you, you’ve got one less reason to leave the office — one more reason to keep your butt glued to an ergonomic chair, whipping up the Next Big Thing at your workstation.

Google’s most famous perk was its food, an astounding variety of gourmet dishes served in cafes scattered all over the Mountain View campus, all made from fresh local ingredients.

Here’s a typical meal served in a Google cafe, photographed and cataloged by an employee on a Google food Flickr stream: quinoa pasta with arabacia sauce, mustard greens, mushrooms and topped with shredded cheese; tomato and pesto on toast; spinach salad with black ruce and nuts; yellow green beans; veggie gumbo — washed down with Calistoga mineral water and a wheat grass shot.

Just type “google food blog” into the search engine of your choice and be prepared to get hungry. Notice that this isn’t just good food, not just gourmet food, it is (ostensibly) healthy food, including plenty of fresh fruits and vegetables.

This wasn’t just a cool perk, this was part of a corporate philosophy devoted to squeezing every last bit of productivity from healthy, happy geeks.

The Google founders Larry Page and Sergey Brin defended this philosophy in an open letter to investors in 2004:

“We provide many unusual benefits for our employees, including meals free of charge, doctors and washing machines. We are careful to consider the long term advantages to the company of these benefits. Expect us to add benefits rather than pare them down over time. We believe it is easy to be penny wise and pound foolish with respect to benefits that can save employees considerable time and improve their health and productivity.”

Now it’s 2009 and Google is tightening its belt. The perks aren’t completely gone, but Google is closing cafes, restricting serving hours, limiting access for guests and clamping down on the culture of entitlement that Google troops have become accustomed to.

Google CEO Eric Schmidt laid out the new philosophy in a press conference Wednesday, saying they don’t want people to come to Google for the perks, “We want them to come to Google to change the world…”

There’s a recession on, after all. Perks that made Google look like a hot, exciting company in 2001 are actually starting to look vulgar in 2009.

It’s simple economics, of course — the kind of economics no one wants to talk about. When the economy is booming, labor is scarce and you have to do more to get the best people.

We saw this during the tech boom when any programmer with a business plan was worth $10 million in venture capital. Hundreds of young entrepreneurs bought office space and ping pong tables, eager to prove that the old model of cubicle-bound wage slaves was dead.

But these old models exist for a reason. Google isn’t the first utopian company to embrace reality and turn things over to a tight-fisted CFO, but it was one of the last holdouts.

The Google perks were a moral victory for geeks everywhere. It brought a kind of existential comfort, to know that there was a place in the world where smart people could do smart things while being pampered like royalty.

But reality gets everyone eventually. Employee perks are an investment, an investment that can only pay off when labor is scarce. It’s not just about the food and the massages and the dry cleaning; it’s about the status that those perks represent.

Those perks told the world that Google was willing to offer extraordinary benefits to attract extraordinary people. By cutting back on benefits, Google is reducing its own prestige and, perversely, the perceived value of people who work there.

Google is obviously a victim of its own success. We’ve seen this story played out a thousand times. Sexy young startup captures the market, aggressively pushing out new products — seducing investors with new strategy and new ideas.

In the early stages, the company is a labor of love, managed by a few devoted people who can react fast and undercut the competition.

Then the young company gets a taste of success and slowly becomes a bureaucracy. Innovation is buried under layers of procedure and paperwork. The founders stop recruiting engineers and start hiring managers.

The company focus shifts from creating new things to protecting what they already have. The hot young company slowly becomes what they despise, while across the city in a garage somewhere, two guys with a laptop start the cycle all over again.

Google hasn’t turned into Microsoft yet, but the die has been cast. By cutting their perks, giving in to the unfortunate economic reality that is squeezing all of us, Google is giving up a little of what made it special.

Google is becoming an ordinary company, with ordinary rules, ordinary restrictions and the same dull corporate culture that everybody else has.

The company is still on top, still capable of producing great things, but a lot of engineers who used to dream of working for Google just took their dreams somewhere else.