The Facebook Effect on New York

What would happen to New York’s tech scene if Facebook expanded its activities here and started hiring engineers?

So far, the Palo Alto-based social networking juggernaut has limited its New York presence to an advertising office, but some local techies have been hearing recently that a more robust operation, one that would employ developers, could be on its way.

According to Facebook, which just opened an engineering office in Seattle last week, that’s not true. “We have no plans to open an engineering office in New York at this time,” a rep told The Observer yesterday.

Still, it’s worth considering how New York would change if such an office were ever opened, especially in light of Facebook’s apparent intention to compete with the city’s most promising tech start-up, Foursquare, with the launch of its own location-based check-in component.

Initially, at least, New York’s start-ups would have an even harder time than they already do recruiting young and gifted engineers, who would likely be drawn to the alluring technological challenges and job security that come with working for a company as established and highly trafficked as Facebook.

“In terms of salary, in terms of benefits-they can compete in ways that we can’t as start-ups,” said Nate Westheimer, the executive director of the NY Tech Meetup.

A few years down the line, though, he said, those engineers could start to leave Facebook and reenter the ecosystem as entrepreneurs, thus bringing to New York a cycle that has long fueled innovation in Silicon Valley.

“It’s a typical cycle there,” said Chris Dixon, co-founder of recommendation engine Hunch and a prominent New York angel investor. “A company grows, hires a lot of people, they kind of learn the ropes, they leave, they start new companies.”

Having Facebook here would attract developers who might otherwise go to work on Wall Street or move to California, Mr. Dixon said, just as Google has done since it opened a New York  engineering office in 2003.

“The Google office opening here was generally good for New York, because what it did was it recruited a lot of people who would have otherwise taken technology jobs at financial firms, and brought them one step closer to the real tech scene,” said Charlie O’Donnell, the entrepreneur in residence at First Round Capital. “Start-ups, because they’re all individually between five and 50 people, don’t do campus recruiting. … If Facebook did a good job of picking up developers from RIT and Cornell and Carnegie Mellon and MIT and bringing them into New York, you may have a temporary increase in the amount of competition for talent here, but over the long term it plays out.”

Mr. Westheimer, a vice president at the Web video start-up AnyClip.com, said he hopes that if Facebook does expand its engineering presence in New York, the people who go to work for them will actually participate in tech culture here rather than keeping to themselves. The 900 or so developers on Google’s New York team, he said, have not done enough of that.

“When you go out on the town, you don’t see a lot of Googlers engaged in the start-up community-you definitely do see some, but it’s not proportional to how many people they have,” Mr. Westheimer said. “They seem to mind their own business, which is fine, but it means there’s not a lot of circulation. … It seems to be Google for life.”

Mr. Westheimer said there’s reason to think Facebookers would be less insular if they came here. 

“It seems to me they are different, at least in San Francisco,” he said. “I do feel that they’re probably more, um … social, than Google.”

lneyfakh@observer.com

The Facebook Effect on New York