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Why he left Google, and what it means for tech industry

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Goldman Sachs executive Greg Smith raised eyebrows around the country March 14 when he published an opinion piece in The New York Times titled, “Why I Am Leaving Goldman Sachs.”

Smith declared that the investment firm had lost its way, and the company’s internal culture had degenerated from one dedicated to growing its clients’ assets into one that regarded clients as nothing but suckers to be ripped off.

“The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for,” he wrote.

Smith’s piece provoked a firestorm, even reportedly prompting Goldman Sachs Chief Executive Officer Lloyd Blankfein to search all the company’s internal email for use of the word “muppets,” which refers to clients who don’t realize they are being manipulated into buying assets Goldman Sachs wants to dump.

Smith’s parting shot made a lot of people sit up and take notice. But just one day earlier, another major executive wrote an essay about why he left his company — an essay that raised just as many eyebrows, albeit in a slightly more focused industry.

That executive is James Whittaker. The company he left is Google. But the drift in the firm’s internal culture may ring a bell.

Whittaker claimed Google started as a clever, customer-focused search engine. Advertisers may be the source of Google’s money, but the priority was always to provide the most effective, useful service. That’s what drew people to the site, and that’s what ultimately made advertisers — and Google — their cash.

But with the rise of Facebook, Whittaker claimed, Google’s focus shifted. Keeping advertisers selling with Google — and keeping them away from Facebook — became the overwhelming priority. Google started frantically experimenting with social media. Orkut. Google Wave. Google Buzz.

None of them worked. And the new priorities forced Google into trying to become what it wasn’t: a social media platform.

And so, Whittaker claimed, he had to leave. It’s odd that he left to join Microsoft, the least adaptive tech firm on the Nasdaq. But there he is.

Meanwhile, the new focus of the tech world is shifting. Its epicenter is no longer Woodside, where the tech titans reside, although Silicon Valley will remain the heart of the country’s tech world for years.

No, the new center of tech is San Francisco. Social media industries need a social environment, a place where young, hip geeks can gather, swill microbrews and network over artisan coffee.

That networking was the key to Silicon Valley’s rise in the first place, but new times require new connectedness. And in the new world, where the future is social media, that connectedness can only happen in a city just up the street from Silicon Valley.

Everywhere you look, you see new startups sprouting in The City. In the late 1990s, that proved to be a bust, as companies such as Pets.com thought it was just a matter of slapping up a website, throwing a commercial in between Super Bowl plays and watching the cash roll in. Today’s tech ecosystem is a little more sophisticated. And San Francisco is the place where it’s happening.