Hiring of Kevin Rose by Google sends all the wrong signals to Silicon Valley

“Embrace failure” is the first thing anyone will tell you is the secret to Silicon Valley’s success. There are other things of course, but that’s likely the first thing that will pop out of people’s mouths.

But as important that philosophy is, the news today that Google had “hired” or “acqui-hired” or “whatever-hired” Kevin Rose seems strange and depressing. AllThingsD broke the story that Rose is joining Google. And then TechCrunch followed with the additional news that Google had hired Rose as well as his entire team from his latest venture, Milk.

There’s been no official statement from Google or Rose as far as I can see.

Milk is best known for, well, nothing. It released a mobile app called Oink which it recently announced it was killing after three months. Rose is best known for starting Digg which was going gangbusters until it wasn’t, and Rose left.

But, as you know, we’re supposed to embrace failure. And so, when Rose started Milk, he was apparently able to hire at least five other people who are listed here on Twitter (TechCrunch says total number of Milk employees is 8.) and raise $1.7 million from at least 24 members who are named on this Twitter list apparently created by Milk. (h/t to Atul Arora for posting these links in the TechCrunch comments.)

The investor list is a rock star lineup: Mike Arrington, Don Dodge, Ron Conway, Matt Mullenweg, Dave Morin, Mike Maples, Chris Sacca, and Ashton Kutcher.

TechCrunch reports:

“We’re also hearing that Milk’s investors were happy with the deal, the price of which was somewhere in the range of $15 million to $30 million.”

Now, we can assume some chunk of that goes to Rose and his friends at Milk, who must have retained some equity. And the rest gets parceled out to the long list of investors who each probably chipped in what amounts to spare change. It essentially seems to bail them out on an investment that appeared to be going nowhere.

Still, the return for such a short-term investment in a company and team that accomplished pretty close to zero seems disproportionate. I know the competition for talent is fierce in Silicon Valley these days. And TechCrunch says Rose and Milk also were negotiating with Facebook, which probably helped drive up the price.

But still, what is Google actually getting for its money that it couldn’t get from a stack of applications flooding its databases? It’s hard to see what makes these guys stand out, other than the brand name of Kevin Rose. And while the valley needs to encourage risk, it seems there wasn’t much risk taking going on here. Worse, it’s always dangerous when there isn’t some sense that rewards are at least somehow tied to performance. It reminds me too much of the dot-com days when people who started terrible companies that quickly tanked still managed to cash out millions before sneaking out the back door. It’s not really taking a risk if you’re going to get rewarded for failure, something that potentially encourages reckless risk taking.

I also have to wonder, will the Milk team’s new co-workers feel about all this when they arrive at Google?

And as for investors, this seems to send an equally bad signal. Bankroll a group of talented techies who are unemployed. Shop them to big players like Facebook, Google, Yahoo. Make a quick buck for doing pretty close to nothing.

Seems like the kind of small thinking that shouldn’t be rewarded or encouraged.