Car Deals

Each day, Inc.’s reporters scour the Web for the most important and interesting news to entrepreneurs. Here’s what we found today:

The best way to keep employees from leaving. For Google, it’s by telling them you love them – with cold, hard cash. Henry Blodget of Silicon Alley Insider reported this morning that Google CEO Eric Schmidt announced in an email that his company is giving all of its 20,000+ employees at least a 10 percent raise in 2011 as well as a $1,000 holiday bonus. While a Google spokesman declined to comment specifically on the raise, he told The Wall Street Journal that “we do believe that competitive compensation plans are important to the future of the company.” The Journal points out that the raise marks another maneuver in Google’s battle to retain talent that has been poached recently by Facebook and younger tech upstarts.

In other news of Google wins… In 2005 media mogul Barry Diller of InterActivCorp bet big ($1.85 billion, in fact) that Ask.com could compete with search engines Google and Yahoo. This week that bet went belly up. Bloomberg reports that Ask.com will lay off 130 engineering jobs and concede much of its search business to competitors like Google and Microsoft, already reaching agreements with both. “We’ve realized in the last few years you can’t compete head on with Google,” Diller said, which now controls 65 percent of all U.S. searches. Instead, Ask.com will re-focus its efforts on delivering its question-and-answer service while parent company IAC continues to develop toolbars, accounting for much of the company’s sustained revenue gains over the past year.

The entrepreneur’s dilemma. Do you want venture capital funding or control? Today’s New York Times DealBook column tackles the thorny issue of an entrepreneur’s need to raise money versus the unpopular necessity of ceding some control of their company to VCs. As Steven Davidoff, the so-called “Deal Professor” explains, “The key for entrepreneurs in negotiations is to make sure that when they do raise VC money, they have options.” Ideally, those options will come in the form of multiple term sheets that will allow the entrepreneur to negotiate the most lenient terms for the smallest part of their company. Davidoff goes on to explain some of the common pitfalls and legal wranglings entrepreneurs should keep in mind when beginning a relationship with VCs.

A lead-generation secret. If you’re like most entrepreneurs, writes Mike Michalowicz in the Wall Street Journal, you ask clients for referrals. But that rarely works: Your client doesn’t want you to be snapped up by its competitors. Michalowicz offers a smart tip: Ask your client to introduce you to its other vendors, so you can collaborate to serve them better. “You might get a raised eyebrow, but your clients will almost always say yes. It’s a no-brainer for your client because you’re not asking them to hook you up with new leads; you’re simply asking them to help you, help them.”

Pay as you go…literally. Twitter co-founder Jack Dorsey’s new company, Square, which allows people to swipe credit cards on their iPhones, is now open to the public. To apply for the Square setup, companies go through not only a credit check, but a Yelp, Twitter, and Facebook check too, to ensure the businesses are reputable. Square now has more than 50,000 users, but Dorsey tells TechCrunch the company has plenty of room to grow, presenting Square as a cost-effective and convenient option for the 24 million merchants in the United States that don’t currently process credit cards.

Big retail in little spaces. Bigger is not always better, says a recent article in The New York Times. As retailers struggle to save money in a sluggish economy, they’re starting to downsize – literally. After all, a smaller space will have a lower rent, fewer costs for storing inventory, and a need for fewer employees. The Times notes that the “change reflects two trends in the retail world: Chains looking for new ways to cut costs in the sour economy, and consumers demanding a less sprawling shopping experience as they spend with greater purpose.” It’s also giving the stores an opportunity to flex their creative muscles as smaller spaces demand flexible design. One Bloomingdales in California, for example, has dressing room walls that retract into the ceiling, which, we can only hope, only occurs only when no one is inside them.

The open-data boon for entrepreneurs. San Francisco mayor Gavin Newsom issued an executive order last year asking city departments to publish data under their control. Since then, hundreds of sets of data have been released. And the bounty is feeding creativity among app designers. Fast Company reports that at least 50 new apps have been built using the open data, including “EcoFinder, a recycling-center locator, SpotCrime, which sends local crime alerts to users, and Routesy, which plans public-transportation trips. Yesterday, (coincidentally in the midst of a Google-Facebook openness smack-down ) San Francisco became the first city to push that order into law. The city’s CIO, Chris Vein, said entrepreneurs are the beneficiaries of the openness: “It’s a platform for small business growth,” he told Fast Company.

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