Facebook perk was apparently just a rental

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Is there no such thing as free rent anymore at Facebook?

Word has leaked from gossip blog Valleywag that pampered employees of the popular social networking company might lose the coveted $600 monthly housing stipend they received for living within one mile of the its Palo Alto headquarters.

In Silicon Valley, where perks help recruit some of the top tech talent, the stipend seemed a stroke of genius. Facebook Chief Executive Mark Zuckerberg is proud of the urban campus he has created in downtown Palo Alto, a string of buildings that’s fast filling up with new employees and just a hop, click and a jump from Google’s first corporate offices.

That means Facebook’s headquarters is smack in the middle of one of the priciest real estate markets in the world, out of reach to many of the company’s less-well-paid staffers such as customer service reps and even to many of its more handsomely compensated engineers. So the stipend seemed a small price to pay to give employees an incentive to shorten their commutes and spend more time in their cubicles pounding out code.

Cost-saving measures seem a bit odd for a company that last fall nailed an eye-popping $15 billion valuation. But Valleywag says former Google exec and new Facebook Chief Operating Officer Sheryl Sandberg, hired in March, is implementing a bit of fiscal discipline.

Apparently those employees who already get the subsidy can keep it until they sign new leases or move. But the subsidy slashes and burns new employees.

Facebook declined to comment.

Not that Facebook employees lack for perks. The latest: Free food. The Facebook cafeteria, run by Josef Desimone, a former Google executive chef, is already a real crowd pleaser. Following the Google model, it serves up ...

... gourmet grub such as fettuccine, fish, baby beets and celery root puree alongside a daily selection of pizzas. There is even a magical machine that swirls delicious homemade frozen yogurt.

So far there have been no impromptu food fights. But Facebook has used the multi-level, architect-designed cafeteria to hold its Friday happy hours complete with kegs and nachos.

Maybe Facebook employees can put their daily lunch money toward their rent.

But will Facebook be able to keep its Palo Alto paradise? The fast-growing company is running out of space and is offering double market rate for suitable office space in downtown Palo Alto, we hear. The company was near a deal for new office space vacated by Google until Google caught wind of it and put the kibosh on the deal.

Testy, testy. Guess the steady exodus of Googlers to Facebook is beginning to really super-poke the powers that be. Decidedly non-Googly. Google could not be immediately reached for comment.

Facebook’s takeover of downtown Palo Alto had some unintended consequences: a shortage of already scarce parking with parking tickets from Facebook employees becoming a boon to the local economy; a run and run-up on apartments in an already tight real estate market; and a jump in office rents as Facebook pays a premium to stay there.

Facebook is pretty determined to stay in Palo Alto, we hear, but has widened its search to San Francisco and Mountain View.

-- Jessica Guynn

Photo: Facebook CEO Mark Zuckerberg. Credit: Paul Sakuma / Associated Press