The New York Times > Business > Your Money > Digital Domain: What's Google's Secret Weapon? An Army of Ph.D.'s:

"What's Google's Secret Weapon? An Army of Ph.D.'s

By RANDALL STROSSPublished: June 6, 2004

Mostly, Google has concentrated on recruiting those with a background in what you would expect: computer science. Founded by two near-Ph.D.'s who have purposely placed Ph.D.'s throughout the company, Google encourages all employees to act as researchers, by spending 20 percent of their time on new projects of their own choosing.
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Microsoft has 56,000 employees, but its research group, with 700, is separate. Google has 1,900 employees, and no separate research group, so all 1,900, effectively, are charged to "boldly go where no one has gone before" (its words). You have to like Google's chances.
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In 1991, Microsoft established its separate research organization, following contemporary orthodoxy, and sought Ph.D.'s to conduct research full time. Its mainstream recruiting, however, remains focused on undergraduates and master's students.
'We're not heavy into Ph.D. recruiting,' explains Kristen Roby, Microsoft's director of recruiting at colleges in the United States. 'We're huge believers in hiring potential.'
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Google, however, prefers those who have been trained for the maximum time setting on the university's dial and who have experience in organizing their own research agenda. The company has not released data about its Ph.D's for two years, but based on its history, the number is probably more than 100."