The Talent Magnet

Lee, of course, must parlay his personal appeal into a sustainable R&D organization--which comes back to building guanxi. "Part of being successful in doing business in China is to be viewed as sincere, trying to do something positive," Lee says. "[There's] no substitute for that."

So Lee has already hosted a nationwide programming competition, dubbed CodeJam, that drew 13,500 entrants. The final round, held live in Beijing, consisted of three programming problems worth 1,500 points. Lee notes that only "a handful" of programmers in the world typically exceed 1,000 on similar tests. To his astonishment, four of the 50 CodeJam finalists topped that figure. The winner, Chuan Xu, a student at Zhejiang University, will join the Google lab after he graduates this spring.

Reversing the Flow

In April, Google announced a Chinese-language brand name for its search engine: Gu Ge, or "harvesting song." But before they harvest anything, Google's new Chinese scientists still have much to learn. At Microsoft, Lee found that many new hires, accustomed to following explicit instructions, had a hard time with Western management, where it is common to confront a boss and where seizing the initiative without specific directions is often prized.

To speed his recruits' progress, to help East meet West, Lee is trying out new Internet-based training and team-building exercises--sometimes even before new hires begin work. Lee is also seeking mentors, Mandarin-speaking experts skilled in the ways of Western research and development who will advise the young recruits.

The hope is that, by year's end, Lee's bright-eyed researchers will be on the way to creating technologies that improve the company's standing in China. In the past, Lee notes, Western firms have "localized" products created elsewhere, tweaking menus or changing documentation for Chinese users. That is no longer enough. "User behaviors and preferences are different in different parts of the world, so you can't take a one-size-fits-all approach to innovation," he says.

So the R&D center, staffed by homegrown talent well-versed in local preferences, will create products initially for the Chinese market: Search and paid advertising for mobile phones are likely, as is Chinese speech recognition as a search interface. Eventually, though, Lee expects the lab to help change the flow of innovation worldwide. In areas such as mobile-phone usage, China is leading the world. "So we will build a product first in China and then understand the product and move it back to the United States or Europe when that market matures," he says. That chance to make a global impact is another big drawing card for the Google center. Yang Liu, an early hire lured from Sybase's China operation, puts it this way: "A group of smart and great people could do something really great for the world."

It's clear already that realizing such ambition will be more than a matter of nurturing top talent--and that meshing East with West won't be a pro forma exercise. Google, which recently launched Google.cn, attracted the wrath of many in the United States by agreeing to the self-censorship dictated by Chinese laws, which includes blocking search results on sensitive topics such as "Tibetan independence." In February, Lee was hounded on the subject when speaking at UC Berkeley and Stanford University. Lee declines to comment on the censorship issue, referring to Google's testimony at a congressional hearing that it does far more good than harm by offering its services in China and that it simply must respect the regulations of different governments.

Google is, of course, playing with a double-edged sword. The democratic urge it represents--its mission is "to organize the world's information and make it universally accessible and useful"--is fundamentally at odds with China's restrictive policies. Lee must appreciate that. Given his commitment to working with Chinese officials and supporting change from within, though, it is almost inconceivable that he does not support Google's line.

That stance may yet compromise the search giant's global ambitions. In the Middle Kingdom, though, it seems unscathed. In fact, Google is hot. Lee still draws excited crowds wherever he speaks. Top tech grads clamor to work for him. A new generation of talent is rising, raw but potent, eager to change the world.

Robert Buderi is a writer in Cambridge, Massachusetts. His book with Gregory T. Huang, Guanxi: Microsoft, China, and Bill Gates's Plan to Win the Road Ahead (Simon & Schuster), was published in May.