That gives their employees a whole lot more choice for housing and makes it more attractive. Every time I see a company that's in SF offering jobs I shudder at the travel time from the valley. It's wonderful if you've already got a place in SF but makes anyone think twice about joining a company when they consider the crazy living costs in SF.
The argument against South San Francisco is that if you're going to build to be closer to San Francisco, then you should make it easily accessible to SF employees. That means it should be a MUNI ride away so you can get to it from anywhere in the city otherwise you're going to either have to drive or deal with a multi-transfer commute. I would suggest the DogPatch or Mission Bay given the access to CalTrain (as a connector to Mountain View HQ) and the availability of large swaths of warehouses or vacant land.