Thomas White Global Investing
Global Players

Global Players

May 2010

Sergey Brin and Larry Page, Google Founders


“We want to be bold; we want to make a big difference”

— Sergey Brin and Larry Page, 2005


The 16th century essayist Sir Francis Bacon once quipped that “knowledge is power.” And no one has recognized this tour de force more than Larry Page and Sergey Brin, the founders of the Google search engine.

Sporting the quirky motto “Don’t be evil,” Google has made the search for knowledge into one of the most successful business ventures of all time.

Google today is not merely a mega search engine. Among others, it is also an advertiser, a photo organizer and a world map all rolled into one. It is a slick functioning, giant corporate machine that has expanded its girth through clever marketing, timely takeovers and shrewd management. With CEO Eric Schmidt completing the top leadership triumvirate, Google continues to be the whizkid that provides the best answers to the everyman’s queries. In January 2010, the internet behemoth held 66.8% of the global search market and saw a 58% rise in the volume of search queries in 2009.

For something hatched out of a college project, that is a phenomenal achievement. At Stanford in 1995, Russian born Sergey Mikhailovich Brin, a life-long math lover and a gregarious personality, met Lawrence Page, a more subdued and thoughtful computer geek, where they were both pursuing a PhD in computer science. On their first meeting, they “found each other obnoxious,” Brin laughingly admits to online magazine Wired. Nevertheless, their mutual fascination for all things math and computing forged a friendship, and it was not long before Page introduced Brin to his research project.

At the time, existing search engines only spewed answers based on the number of times the search word showed up in an article. Known as BackRub, Page’s project went beyond robotic answers and explored ways to improve relevancy and importance while responding to a search query on the internet. When they tested their new page ranking system at Stanford, the reaction was overwhelming. Soon the first official version of Google, named after googol, the numeral one followed by a 100 zeroes, was launched in 1996.

By 1998, Google had become a well-known application within computer science circles, receiving more than 10,000 hits a day. That is when Brin and Page became convinced to quit college and take it up more seriously. Armed with a business plan, the dynamic pair set up Google’s first office at a friend’s garage in California.

Despite the lack of conventional business acumen, Brin and Page compensated with smart and radical thinking, designing a website that quickly grabbed eyeballs and pushed up click rates. While Yahoo, by then an already established presence, filled its home page with news, stock quotes and other information, Google’s home page sported an uncluttered look with just its logo and a search box. Page explained to TIME, “We wanted people to spend a minimum amount of time on Google. The faster they got their results, the more they’d use it.”

As its popularity grew, Google began in 1999 to sell advertising associated with search keywords, and by 2004, the search engine had indexed four billion web pages and was receiving 200 million searches per day. At this point, advertising soon ballooned to make up 99% of the company’s revenues, a phenomenon that continued into 2005 and 2006. Thrilled with the success of its advertising effort, the company began padding its search engine service with other applications, expanding through a strategy of acquiring small startups with great potential. Google Earth, for instance, was incorporated in 2005 when the company acquired Keyhole Inc., the start-up that first developed the software.

So what is the recipe for Google’s unflagging success? Without question, the company’s technological innovation and astute acquisitions have been the engines of growth. But the Google corporate culture has played an important role as well. Brin and Page firmly believe that employee happiness spurs creation. A casual and cheery office environment has bred a teeming playground buzzing with ingenuity. Google is famed for offering free lunches, extensive play areas and every imaginable service that targets worker satisfaction, including subsidized in-house masseurs. Thanks to this vision, creativity has flourished. And so, Google’s applications today include book previews that can be read online, Google videos, Google maps, Gmail and Google Chrome, a web browser, and more.

Google has found its way into the Oxford English Dictionary as a verb that denotes obtaining information from the internet.

Not everyone loves Google though. The search giant has attracted its fair share of criticism and controversy, mainly over violations of privacy and copyright issues. The New York Times has often raised its voice against the caching of content during web searches, which according to the newspaper, infringes upon their copyright. More recently, Google has been caught up in an imbroglio with China concerning censorship of politically sensitive information. After Google was the victim of infrastructure cyber attacks from China, the company said that it would no longer censor its information, even at the risk of shutting down the Google Chinese operations.

Controversies apart, Google’s reign over the World Wide Web is facing intense competition from Bing, a search engine from Microsoft. Although Google still holds the lead position, Bing at 11.5% is fast crunching away at Yahoo’s 16.8% second place slot. Even Mark Zuckerberg’s Facebook is posing a threat. The social media site displaced Google in January 2010 to become the most viewed website in the U.S. To stay ahead in the race, Brin and Page have recently entered into a deal with visual search technology developer, Plink.

To say that Brin and Page, both just 37 years old, have changed the way people search online is an understatement. Google has sculpted a new dimension in search technology and has created an entire market. What lies next for these two young billionaires? Just Google it, the answer is right there.

 

 

 

 

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