A History of Google
Not since the invention of the printing press more than 500 hundred years ago has an invention changed both the way we communicate and the way we access information as the Internet has. Originally a Defense Department project in the early 1960s, the Internet has become integral to everyday life, vaulting companies such as Amazon, Yahoo!, eBay and Google to the fore of public consciousness. None, however, is riding higher than Google. More than just the world’s most popular search engine, Google has become nearly synonymous with the Internet itself. Spread almost exclusively by word of mouth, Google has millions of users in more than 100 languages and has sent technology giants Microsoft and Yahoo! scrambling. How did two Stanford Ph.D. dropouts, Larry Page and Sergey Brin, launch a search engine that seems to be the end game for all other Internet companies?
In the Beginning There Was Larry and Sergey: 1995-1996
Larry Page from Michigan met Sergey Brin from Moscow in the spring of 1995 at a new student orientation at Stanford University. Brin was showing Page and other prospective graduate students around campus when suddenly the pair began arguing about random issues. Though they had just met, they were playing each other's favorite game of intellectual jousting and they soon became inseparable. While Brin was an extrovert accustomed to the limelight and Page was more quiet and contemplative, they had overlapping backgrounds and ambitions. They both lived near major universities and had fathers who were respected professors and mothers whose jobs involved computing and technology. Given that academics was treasured in both their homes, it was inevitable they would attend graduate school. Soon they were studying together in the William Gates Computer Science building (Vise 2005). While there, Page, who had been working with Stanford’s Digital Library Project, noticed the search engine he was using, AltaVista, included links. While AltaVista appeared not to do anything with the links, those links are precisely what Page began to focus on. In 1996, Page and Brin began to download and analyze Web links and soon developed a link rating system called “PageRank” that would become the heart of Google (Caufield 2005).
PageRank would revolutionize not only search engines but also the entire Internet. Early search engines used a weak keyword indexing and matching system that often produced irrelevant results corrupted by private interests, pornography Web sties that emptied dictionaries onto their Web pages, and search engines that accepted money for placing a given Web site in search results. But what PageRank did is “crawl” the Web with “Googlebot” and then analyze the Web’s vast link structure as an indicator of an individual page’s value. Page initially called this early search engine “BackRub” because it dealt with the combination of “back links,” akin to academic citations, with Web pages (Caufield 2005). In other words, Google gives weight to sites that are linked to other sites. In doing so, Page and Brin inadvertently solved one of the core problems of searching for relevant information on the Web. Their vision encompassed a more holistic approach to searching. Not surprisingly, Brin and Page were considered social progressives which, in Silicon Valley, meant they favored free and open software rather than the closed system that Microsoft prefers (Vise 2005).
A New Name and New Growth: 1997-1999
As the search engine grew in popularity at Stanford, both Page and and Brin decided that BackRub needed a new name. Page turned to fellow graduate student Sean Anderson for help, and they discussed several possible new names for “BackRub.” After several days of brainstorming in their graduate student office, Anderson verbally suggested the word “googleplex.” Page and Brin liked it, and Page suggested they shorten it to “googol,” which refers to the number 1 followed by 100 zeros, a number that nicely embodied the company’s mission to organize the vast expense of the Web. When Anderson searched to see if the domain name was available, he misspelled “googol” as “google” which was available. Because “googol” was unavailable and Page thought “google” had an Internet ring to it like Yahoo! or Amazon, Page registered their search engine as “google.com” on the Internet domain name registry. In contrast to other busy-looking pages with flashy banners and blinking lights, Brin and Page decided to keep google.com clean and simple to allow for faster searches (Koller 2004). Though the Stanford Digital Library funded them $10,000 which Brin and Page used to build and string together inexpensive PCs, Brin and Page were still perpetually short on money. As google.com’s popularity continued to grow at Stanford, Page and Brin were faced with a decision: finish their graduate work or create a business around their growing search engine. Reluctant to leave their studies, Page and Brin offered to sell their search engine for $1 million to AltaVista. To their disappointment, AltaVista passed, as did Yahoo!, Excite, and other search engines. They were rejected in part because many search engines wanted people to spend more time and money on their Web site, while Google was designed to give people fast answers to their questions by quickly sending them to relevant Web pages. Yahoo! cofounder David Filo, a Stanford alumnus and friend to Brin and Page, advised the duo to take a leave of absence from Stanford to start their own business (Vise 2005). Filo initially encouraged Brin and Page not only because they were friends but also because Yahoo! was interested in cultivating a field of healthy search engines they could use. While obviously underestimating how powerful Google would become, Yahoo! realized that along with mail, finding information on the Web was going to be an important part of their business. Indeed, Yahoo! and Google would eventually have a complex competitive/cooperative relationship.
Unable to interest major search companies, Page and Brin took Filo's advice and sought funding to start their own company and to pay off the terabyte of memory they bought using their credit cards. They approached Andy Bechtolscheim, a founder of Sun Microsystems and a friend of a Stanford faculty member. Bechtolscheim, in a hurry to get to another meeting, immediately recognized Google’s potential, cut the meeting short, and wrote a check for $100,000 on the spot (Vise 2005).
On September 7, 1998, Brin and Page formally established Google Inc., cashed their new check, and hired fellow Ph.D. student Craig Silverstein as their first employee. Their first office as a new business was in a house in Menlo Park which they soon outgrew and moved to University Avenue in downtown Palo Alto. Brin and Page recruited employees with the lure of their “cool” technology, stock options, free snacks and drinks, and the idea that “millions of people will use and appreciate your software.” By the end of 1998, Google was handling 10,000 daily searches and was included in PC Magazine’s list of Top 100 Web Sites and Search Engines. Google was moving up in the world.
Google’s popularity continued to rise during 1999 as major search engines such as AltaVista, Excite, and Yahoo! were losing users. While those search engines were becoming diluted by “all purpose” sites, or sites on which viewers could shop, read the news, and check email, Google kept its focus on being a premier search engine and soon traffic surged to 500,000 searches a day. What really put Google on the map was a hefty $25 million from John Doeer of Kleiner Perkins and Michael Moritz of Sequia Capital. In an unprecedented move, Doeer and Moritz agreed to work together to fund Google on the condition Google hire a CEO to create a noticeably lacking business infrastructure at Google (Vise 2005). Despite less-than-stellar profits in 1999, Google still refused to go public to raise money like many dot-com companies and refused to license out its technology or put flashy banners on its Web site. Instead, to increase revenue, it turned to highly targeted ads called “sponsored links.” Now called AdSense, the service allows small publishers to tap into Google’s huge base of advertisers, gaining themselves—and Google—income (Battelle 2005).
The GooglePlex and Rapid Expansion: 2000-2003
By mid 2000, Google had 15 million searches per day and was winning awards for its quality of search results. Soon the company settled in an extensive building complex called the “Googleplex” and began hiring talented software engineers and mathematicians who suddenly found themselves out of work when the stock bubble burst in 2000. Google also benefited from Microsoft’s antitrust court battle that effectively painted Bill Gates as a bully and a monopolist. In contrast to Microsoft, Google was seen as a fresh company run by nice guys who had an appealing motto of “Don’t Be Evil” (Vise 2005). Google’s influence also spread when Yahoo! dropped Inktomi (a popular search engine at the time) in favor of Google-generated search results. By June 2000, Google officially became the world’s largest search engine with a billion-page index—the first time so much of the Web had been made available.
By 2001, Google had over 100 million searches per day, or 10,000 every second. Due in large part to Google’s 20% rule, which allowed employees to pursue their own interests one day a week, Google was rapidly turning out new innovations, such as phone number searches, Google Image Search, Google Alerts, Froogle, and Google NewsPage. One engineer also created a way to catch a user’s spelling errors, coming closer and closer to connecting a user's mind with technology. The year 2001 was also remarkable in that Brin and Page finally hired a CEO at the increasing urging of investors Kleiner Perkins and Sequoia Capital. Brin and Page had always been reluctant to give up their independence and were concerned that implementing corporate-like controls at the Googlelex would stifle innovation and hamper progress. However, after a recommendation from John Doerr of Kleiner Perkins, they interviewed Eric Schmidt from Novell, Inc. Impressed with Schmidt’s obvious commitment to the company and his courage to challenge Microsoft, Brin and Page welcomed him as their new CEO. And just how integral Google had become to users was seen on September 11th when millions of stunned searchers turned to Google to make sense of their world.
When America Online chose Google over both Overture (a popular company that provided targeted ads for major Internet sites) and Inktomi to provide both search and advertising results, Google's reach grew enormously. Google also partnered with Earthlink and AskJeeves, and by the end of 2002, Google generated $440 million in sales and $100 million in profits--all while still a private company. While Microsoft and Google maintained a simmering rivalry, Microsoft had been distracted on resolving disputes from other companies and underestimated the extent of Google’s power. Google wanted to keep it that way. Once Google and the details about the scope of its operations became public, Brin and Page feared competition with Microsoft would become even fiercer.
By 2003, tens of millions people searched Google daily: Germans googelte, Finns googlata, and the Japanese guguru. And Google continued its innovation and expansion by buying PyraLabs, a blog service (Vise 2005).
Gmail and Going Public: 2004
Google had two surprising announcements in 2004. The first was about plans to open a research facility on the moon. But that did not garner as much controversy as their second announcement: plans to launch a new e-mail service, Gmail, which offered a gigabyte of storage for each user, a built-in search function, and messages that were grouped into conversations. To Google’s surprise, the Electronic Privacy Information Center soon issued a statement announcing that Gmail violated the sanctity of private communications by allowing e-mail messages to remain in Google’s servers for longer than 180 days. Gmail’s automated targeted ads which seemed to “read” the content of a user’s e-mail also worried some privacy groups. Despite concerns, theorists argued that it was inevitable that personal information would move online, and once people tried Gmail, they loved it. While there have been no reported privacy breeches, privacy groups still advise Gmail and Internet users in general to be aware of what they put online.
This year was also notable in that Google finally went public, albeit not without challenges. Google’s two classes of shares (the founders and the rest) allowed Brin and Page to have almost complete control over the company because their shares were worth ten times that of the ordinary share holder's. In addition,Brin and Page did not want to follow the traditional Wall Street procedure of using investment bank underwriters who tended to offer under priced IPOs (Initial Public Offerings) to favored clients who would then profit by dumping the stock on day one after the price skyrocketed. Instead Brin and Page wanted a “Dutch” auction or uniform price auction in which all bidders only pay the price of the lowest accepted bid (Battelle 2005). Furthermore, though none of these concerns materialized, potential investors worried that consumers would find a way to turn off Google’s “sponsored links” or that Google would lose its lucrative partnership with AOL or AskJeeves. Also, Geico’s copyright infringment lawsuit against Google threatened Google’s targeted ad system, and consequently its franchise. Geico objected to the way Google profited by selling ads to Geico’s competitors that were linked to trademarked names that Geico owned. For example, another company could bid on the word “Geico” or the trademarked product Geico Direct and run an ad. Geico alleged that the approach created confusion in the minds of consumers who would type “Geico” and the see ads for one or more of its competitors, which Geico felt infringed on the legal rights it had to protect its brand name (the court would later rule that Geico had insufficient evidence and terminated the trial). In addition,Yahoo! dropped Google and unveiled their own Google-like search engine. To make matters worse, Playboy published a major interview with the “Google Guys,” which was a potential violation of the quiet period, which is a four-week period prior to the close of a business quarter in which a company is forbidden to speak to the public to avoid potentially disclosing “inside” information. The PlayBoy interview prompted investors to question the maturity of Brin and Page. Still, when trading began at 11:56 a.m. on August 19, 2004, the Google IPO proved extremely successful, giving the company an initial market value of $23.1 billion dollars. Soon after, Google outbid Yahoo! to partner with AOL European Internet service to provide ads (Vise 2005).
Google Keeps Going and Going: 2005-Present
Since going public and amid revenues of $1.032 billion, Google launched several new programs--including Google Store, Google Video, Google Mini, and Google Maps--and acquired Irchen Software, a San Diego-based Web analytics firm. In 2006, Google opened a philanthropic franchise called Google.org and announced plans to work with the National Archives in Washington D.C. to digitize years of historical footage, including WWII newsreels, motion picture films, and NASA productions. Google also released Google calendar as well as created an advertising partnership with eBay and a toolbar distribution with Adobe. In a significant move, Google also acquired the extremely popular YouTube. By the end of 2006, Google stock soared to over $500 per share (Google).
In 2007, Google announced partnerships with China Mobile and Samsung, as well as new partnerships with more libraries for its digital library project. It also provided upgrades for Google Earth Software, opened Gmail to everyone, and made innovations in AdClick. Despite its aggressive expansion, Google is still seen as quirky, innovative, and surprising, which has served as an effective competitive strategy (Vise 2005).
Conclusion: To Infinity and Beyond?
Brin and Page have long-term plans for Google’s continuing expansion, including working with geneticists to digitize the human genome. With their own supercomputer and custom-programmed operating system, Google’s ability to create advanced software will increase rapidly. Google’s presence is still not without controversy, however. Its digital library, in particular, has been criticized because it potentially represents only Google’s conception of a “universally accessible and useful knowledge” at the exclusion of other cultures and viewpoints (Jeanneney 2007). Lastly, Google’s far-reaching presence into personal lives such as its aggressive acquisitions of blogs, picture albums, toolbars, calendars, and GoogleEarth is troubling to many due to the potential of abuse. But Google shows no signs of slowing down, even in light of Microsoft’s proposal to buy Yahoo! Always the visionaries, Sergey Brin and Larry Page continue to look to the future where, perhaps, as Brin states, they “can attach a little version of Google that you just plug into your brain. All the world’s knowledge immediately available, which is pretty exciting” (Vise 2005).
-- Posted April 5, 2008
Battelle, John. 2005. The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture. Boston: Nicholas Brearly Publishing.
Caufield, James. 2005. “Where Did Google Get Its Value?” Libraries and the Academy. 5.4: 555-572.
Google Inc. Corporate Information: Company Milestones. Accessed: March 8, 2008.
Jeanneney, Jean-Noel. Trans. Teresa Lavendar Fagan. 2007. Google and the Myth of Universial Knowledge. Chicago: University of Chicago Press.
Koller, David. 2004. “Origin of the name 'Google'.” Stanford University. Accessed: March 8, 2008.Vise, David A. 2005. The Google Story. New York: Bantam Dell.