You're a correct to a certain extent but as you can see from the comments, they also want to work with and learn from smart people and they want to be fairly compensated, (equity, stock options etc). I think Google has gotten the mix almost right. They're working on interesting problems that affect many people's daily lives, they've got smart people working for them which attracts more smart people, they offer fair compensation. They give employees the flexibility to try out different things (and pet projects). Mind you, Google's culture is not perfect and they'll have problems retaining and attraction top talent as they grow larger and more bureaucratic.