Thursday, June 2, 2011

Alleged Shenanigans and Intrigues at Google


A Soap-Opera According to PayPal...

When Stephanie Tilenius left eBay/PayPal on October 16th 2009 she agreed not to poach their employees if she joined another firm.

But, according to PayPal, Stephanie did indeed engaging in some poaching. And not just any poaching. She poached big game.

In an apparent breach of her agreement, she initiated contact with PayPal employee Osama Bedier in July of 2010. She’d gone to work for Google and Osama had a background of particular value to Google. Too bad for Stephanie, she approached Osama Bedier via a message on Facebook, and PayPal included it in their complaint filed against Google in Superior Court of California last week:

“How are you? Hope the wife and kids are well...hard to believe you have 4 kids, they all must be so big now. I heard from a little birdie that you might be open to bigger and better challenges, I have a HUGE opportunity for you, would love to chat if you are interested.

What made ‘big game’ is that PayPal and Google were in the middle of negotiating an agreement where PayPal would serve as a payment option for mobile app purchases on Google’s Android Market. Bedier was the senior PayPal executive accountable for leading negotiations with Google on Android at the time.

At PayPal, Bedier was responsible for Mobile, Platform, and New Ventures. He’d helped shape PayPal’s broad strategy to expand its mobile payment and digital wallet offerings. He knew that PayPal viewed Google as one of the competitors in the emergence of mobile payment at retail stores. He was privy to research and analysis into Google’s major problems and weaknesses in the mobile payment and point of sale context. This information concerning PayPal’s plans and Google’s weaknesses in mobile payment and point of sale were trade secrets.

The business negotiations spanned a period from 2008 to 2011. But it was more than just negotiations. Google claimed a need to understand the complexity of the integrated payment system before moving forward. During the negotiations integrations engineers for PayPal and Google worked together to build the software and capabilities that would enable Android Market to offer PayPal as a payment option. Development occurred in tandem with negotiations.

Negotiations were to conclude in a deal on October 26th last year. But when Google was presented with the very deal they’d requested, they balked. They professed a shift in mindset on the entire structure of the deal. They, of course, had been negotiating with Bedier to come aboard while he was supposed to be representing PayPal in these talks with Google. But now they were ready to make him an offer which they did on October 31st. He was to run their mobile payments initiative.

Ultimately, Bedier accepted the role with Google and is largely responsible for their rapid development of their mobile payments solution announced last week. On May 26th PayPal filed a law suit against Google naming Bedier and Tilenius as co-defendants. PayPal is seeking an injunction as well as actual and punitive damages against the named parties.

Looks like Google isn’t just innovative when it comes to technology, perhaps they are also innovative when it comes to business ethics. PayPal asserts that Google was well aware of what they were asking of the former PayPal employees, and putting these people in the position that called for breach of their agreements with PayPal and eBay.

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