In addition to software engineers, computer scientists and web designers, Silicon Valley giants ranging from Yahoo to Google to eBay are scrambling to hire economists, a little-known and increasingly valuable weapon as these companies create new businesses and fine-tune existing ones.
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In the wake of the example of University of California-Berkeley economist Hal Varian, who helped Google perfect the auction process behind its multibillion-dollar search advertising revenue stream, big Internet companies are competing to woo economists away from universities, or work with them on specific projects.
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Yahoo has been among the most aggressive, but eBay, Amazon.com, Facebook and other companies also are recruiting practitioners of what used to be called the dismal science. Illustrating how crucial companies think those skills are, Microsoft CEO Steve Ballmer personally recruited economist Susan Athey from Harvard.
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Other companies have recognized that economists really have a lot to contribute, said Varian, who joined Google full-time in 2007 after working as a consultant for the search giant since 2002. Google has 10 economists, statisticians and other quantitative analysts on Varian’s staff, and is looking to hire more.
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Internet companies see the economists as critical in their efforts to fine-tune advertising networks that serve millions of online ad impressions a day, and to better understand e-commerce platforms with tens of millions of buyers and sellers, as well as to determine if new businesses or new approaches will be effective.
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For instance, Yahoo’s economists have been searching out a holy grail of advertising — tangible evidence that online ads actually make people buy stuff in a real-world store. And Google needs to understand non-Internet markets like transportation and retail as it tries to move into the sale of airline tickets and local ads. To match up buyers and sellers, you need to understand where the buyers are coming from and the sellers are…