Giant Sucking Sound Eminating from Silicon Valley Centering Around " Goog "

By Ben Elgin, with Robert D. Hof, in San Mateo, Calif., and Jay Greene in Seattle Fri Jul 29, 3:59 PM ET Some call it the "giant sucking sound" emanating from Silicon Valley. For others, it's a migraine in the making. But whatever they're calling the hiring binge at Google Inc. (NasdaqNM:GOOG - News) and Yahoo! Inc (Nasdaq:YHOO - news). (NasdaqNM:YHOO - News), just about everyone is a bit astonished at the fearsome force that's swallowing up some of tech's best and brightest. "High-profile researchers are now flocking to the search engines," says Marti Hearst, associate professor at the University of California at Berkeley's school of information management and systems. The migration of software-engineering talent to Google and Yahoo is a testament to how high these search companies have risen in the tech firmament. Coveted talent from academia, startups, and venerable tech companies that a decade ago would have flocked to Microsoft Corp. (NasdaqNM:MSFT - News) or Sun Microsystems Inc. (NasdaqNM:SUNW - News) are now more than willing to switch teams and join Google or Yahoo. In the second quarter alone, Google snapped up about 230 engineers. Recent additions include software superstars Louis Monier, director of eBay Inc.'s (NasdaqNM:EBAY - News) advanced technology research, and Kai-Fu Lee, a top-flight researcher at Microsoft -- which prompted the software giant to sue Google and Lee to keep him from going to work there right away. Yahoo, meanwhile, has recently hired dozens of top engineers, including Larry Tesler, former vice-president for shopping experience at Amazon.com Inc. (NasdaqNM:AMZN - News). And the company is expected to announce on July 28 that its new head of research is Prabhakar Raghavan, former chief technology officer at search-software outfit Verity Inc. and an authority on algorithms. What's behind this talent raid? Another dot-com gold rush it's not. Eager investors already value these businesses at a combined $130 billion, up from about $63 billion last August when Google went public. That means the share prices reflect much of the companies' promise, suggesting stock options could be in for a slower climb from here. Read More