Google to give employees a 10% raise

Wednesday afternoon that sources told it that within hoursof the reports, Google notified its staff that it had terminated the leaker. A Google spokesman declined to comment on the firing, or on the memo."While we don't typically comment on internal matters, we do believe that competitive compensation plans are important to the future of the company," Google spokesman Jordan Newman said Wednesday.

Google has long been known for feeding its workers free food and pampering them with otherperquisites that would be considered luxuries by most employees.But the company began taking away some of the goodies in late 2008 and early 2009. It went so far as to lay off a few hundred people to help boost itsearnings during the depth of theworst U.S. recession since WorldWar II.

The good times are back at Google this year, though. Revenue rose 23 percent to $21 billion through the first nine months of 2010. Confident of even more prosperity ahead, Google has added 3,500 employees so far this year to expand its work force by nearly 20 percent. It also has been spending heavily on acquisitions and investments in the data centers that run its online services.The raises are yet another sign of Google's bullishness. The company didn't disclose how much the added payroll would cost, but assuming an average employee salary of $100,000 ¡ª not outlandish by high-tech standards ¡ª the across-the-board raises would amount to an additional $233 million annually.

Google can easily afford that, with $33 billion in cash as of Sept. 30.

Schmidt framed the raises as a way to reward "the best employees in the world," but the largesse also may be part of a strategy to slow defections to up-and-coming Internet rivals, such as Facebook. The rapidly growing online hangout has become more aggressive about recruiting Google workers since it hired one of Google's top salesexecutives, Sheryl Sandberg, as its president 2 ½ years ago.Facebook, just a few miles away from Google's Mountain View, Calif., headquarters, has been able to dangle stock options in what is expected to be a highly lucrative initial public offering within the next few years