Googled: The End of the World as We Know It

PART FOUR Googled

CHAPTER FIFTEEN Googled

Media companies can be divided into two broad categories: the few who create waves, and the many who ride them—or drown. The elite companies that generate waves are rare, the wave riders common. A company can be successful—Cisco, Dell, Oracle—yet not fundamentally alter the behavior of consumers or other companies. Dell’s approach to efficiently making computers was an innovation, not a disrupter; it did not alter the way consumers behave. Steve Jobs and Apple are wave makers; companies like Dell—or Quincy Smith’s CBS and Irwin Gotlieb’s GroupM—attempt to ride the wave; newspapers crash into them. The Apple wave started with the Apple II, which launched the PC era in 1977; followed in 1984 by the Macintosh, with its innovative graphical user interface; followed by Pixar studios, which transformed movie animation; followed by the iPod and iTunes and the iPhone. It’s probably safe to say that Intel and HP created waves. Ditto Amazon. There are those who say Microsoft doesn’t qualify because it rode the waves others invented, but it is inarguable that it has thrived for three decades and changed computing. It is much too soon to know whether companies like Facebook, YouTube, Twitter, or Wikipedia will have a lasting impact.

It is not too early, however, to call Google a wave maker. The planet has been Googled, with the company becoming, as Larry Page has said, “part of people’s lives, like brushing their teeth.” Google has eliminated barriers to finding information and knowledge. “The Internet,” Hal Varian said, “makes information available. Google makes information accessible.” The Google wave has crashed into entire industries: advertising, newspapers, book publishing, television, telephones, movies, software or hardware makers. Its power is measured by the companies that fear it and the public that adores it. Google has fostered the growth of the Web by nurturing Web sites with its AdSense and AdWords programs, which have delivered advertising dollars and enabled small businesses to reach new customers. Google’s way of building its business—make it free and attract users before figuring out a way to make money—became the template for Web start-ups from Facebook to YouTube to Twitter to Ning. Google is responsible for creating an entire new industry of search marketers and search optimizers who gather by the thousands several times a year under the umbrella of Search Engine Strategies (SES); these companies set out to outwit Google’s algorithms so they can advise companies how to jump to the top of search or advertising results. Google has created a new model for an innovative business culture. Its search results provide a graph of our times, revealing which subjects preoccupy us; by studying search data on Google Trends, economists believe they can spot trends and better predict consumer behavior. By making information available, Google has facilitated political participation, as YouTube demonstrated throughout the 2008 presidential campaign. It has made institutions, from governments to corporations, more transparent. And with its open-source Android phone and cloud computing and YouTube and DoubleClick, it threatens to extend its considerable reach.

“Fifteen to twenty years ago, entrepreneurs would have said, ‘I want to be the next Bill Gates and Microsoft,’” Michael Moritz said. “Today people’s great ambition is to be the next Google. They went from zero to twenty billion dollars in revenues in four hundred weeks! Google has become the front door to the world for many people, the place they go for information. They are probably the most visible service concocted by mankind. Was Henry Ford more recognized in 1925? I doubt it. Because of the Internet, Google has leapt geographical boundaries.” Perhaps the only company visible to more of the planet’s occupants, he guesses, is Coca-Cola.

During the 2007 Zeitgeist Conference, a prominent media executive in attendance whispered a question to me. He was clear, he said, about the immense value Google was producing for itself. What he said he didn’t understand was this: What value was Google producing for society, other than shifting money from the pockets of traditional media to Google’s? During a long interview with Sergey Brin that day, I relayed the question. Brin had an easy answer if he wanted it; on the front page of that day’s San Jose Mercury News was a story about the jobs his company had created and the auxiliary businesses that benefited from what the headline called “The Google Effect.” But Brin chose to make a broader point: “It’s very simple. People with the right information make better decisions for themselves. People presented with the right commercial opportunities will buy things suited to them.”

By way of illustration, Brin described a trip he and his wife had made to Africa. With sophisticated digital cameras in hand, the two of them often jump on the private, customized Boeing 767-200 or 757 that Brin and Page purchased and that transports them to different continents. “One day in Zambia the driver was telling me how he was trying to get all the parts to a computer,” Brin said. The driver couldn’t locate some parts he needed, and those he could find were five times as expensive as they were in the United States. “He was trying to get a DVD-Rom drive. I said, ‘In the U.S. they cost about thirty dollars.’ He said, ‘What?’ He was about to spend two hundred dollars on a DVD-Rom. Imagine if there was information there? He would have been able to get that DVD-Rom drive for forty bucks. He’d be more efficient at his job, and it would help communities as a whole. I certainly believe that information creates value, rather than displaces it.”

Google search is of enormous benefit to other companies as well. Referring to the Internet as “a magic box where whatever you want to do, it’s all there,” Marc Andreessen credited Google with making the box “more magical. Google makes the world a much better place because it makes everything findable. Many companies spend a lot of time and effort to make their stuff more findable on Google. It’s a huge source of traffic and income. Facebook used to be closed off from Google—you had to be logged into Facebook to see people’s profiles. But then Facebook started publishing public profiles so that when you search on Google for someone, their Facebook profile pops up in the search results. That generates additional incoming traffic and therefore money for Facebook.” Web site owners report that Google search often sends them 80 to 90 percent of their vistors. With Google as the Internet’s prime navigator, there still remains the question Nicholas G. Carr asked in a 2008 blog post: “Is the company an exemplar or a freak?”

Itay Talgam did not mean to address this question when he appeared at Google’s 2008 Zeitgeist Conference, but he inadvertently offered an answer. Talgam, a renowned Israeli orchestra conductor, stood on a small semicircular stage wearing a wrinkled cotton polo shirt with a sweater draped over his shoulders, his sparse hair shooting in several directions. For a half hour, his presentation of how conducting could be a metaphor for transformational management hushed the audience. Music is “noise,” he began, and what the conductor does is “make a large group of people work in harmony.”

Scanning a century’s worth of conductors, he chose to discuss five. Each was outstanding, he said, but only two were transformational. The lights went down and on a large screen appeared a video clip of the autocratic Riccardo Muti, whose stern face and robotic baton movements brought forth from his orchestra no “joy,” and suppressed the development of individual artists. Muti’s “expression never changes,” Talgam said. “He tells everyone what to do. He is a micromanager.” The second conductor was Richard Strauss, who seemed to be in another place as he mechanically moved his arms, granting his orchestra more freedom but imposing no authority and offering no inspiration. The third was Herbert von Karajan, who never looked at his orchestra and also failed to inspire. The fourth was Carlos Kleiber, whose face was filled with rapture as he conducted and who, Talgam said, “creates a process” and “a feeling of freedom” while also conveying “authority.” Notice, he said, the way Kleiber shot a disapproving glance at a soloist.

Talgam saved his favorite conductor for last. With the fifth clip, we were treated to a video of Leonard Bernstein welcoming an orchestra of high school students from around the world who had been granted one week under his direction to perform Stravinsky’s The Rite of Spring. The first day of practice, the makeshift orchestra was discordant. But Bernstein did not wield a baton as a symbol of his “authority,” Talgam noted. Instead, he stopped the music and spoke of the feelings Stravinsky sought to evoke, of the smell of spring grass, of waking animals. “He empowers people,” Talgam said, “by telling them that their world is larger than they think.” Cut to a week later, and the high school orchestra sat attentively before Bernstein, who looked on with obvious satisfaction as an assembly of young strangers achieved musical harmony. Without a baton, arms folded, Bernstein conducted only with facial expressions—a curled lip and lowered head for the basses, a raised eyebrow for the higher strings, a nod to the horns, an extravagant smile for the finale. Talgam did not need to tell the audience what they had seen. It was a sublime management seminar demonstrating how unusual leaders liberate those who follow. Bernstein was the boss, but he was not an autocrat. He managed to coax the best out of his orchestra, to make them part of a community.

It was no accident that Google invited Talgam. This sense of being connected to something larger is central to its culture. Employees share offices and work in teams. Google strives to make employees feel that they are part of a network. When Patrick Pichette became CFO, he relied on a wisdom-of-crowds approach to cost cutting. He set up a Web page and invited employees to make suggestions to eliminate waste, which he said unearthed many of the best ideas. Google uses a variant of this network approach when it test-markets whether its users like blue or yellow, one beta product or another. Of course, this faith in quantification is what drove some designers to leave the company and to blog about their frustrations.

These forms of communication are characteristic of what Anne-Marie Slaughter, the former dean of the Woodrow Wilson School of Public and International Affairs at Princeton, has described as “the networked world,” a world that Google has been instrumental in advancing. Diplomacy requires “mobilizing international networks of public and private actors”; CEOs are acutely aware of “the shift from the vertical world of hierarchy to the horizontal world of networks”; the media increasingly is composed of “online blogs and other forms of participatory media” that “create a vast, networked conversation.” Society itself is networked, with “the world of MySpace” creating “a global world of ‘OurSpace,’ linking hundreds of millions of individuals across continents.” This world is one where a more open America, and a more open company, has distinct advantages.

Google has devised a management system that liberates its employees. The “Googly” way, said Laszlo Bock, Google’s vice president of people operations, is simply to treat employees better. “Google is a platform to say, ‘You can trust your folks.’ We want to be an example to other companies. The key is the 20 percent time, not the free food. There is a feeling here of intellectual freedom.” Even though there was some grumbling from Googlers in 2008—about costly child care, the closing of the Phoenix office—most recognized their work life was charmed. How many companies gifted its employees with new stock options to replace those that had become worthless? Asked what impact Google’s employment policies have had on other companies, Page said, modestly, “It’s hard for me to know. I’ve never worked anywhere else. But I feel that we have had an impact. We certainly got a lot of attention for the things we do for employees, and that’s positive.” It also means, he added, “Our competitors have to be competitive on some of these things.”

Marissa Mayer claimed that half of Google’s products materialize from the 20 percent time. This has fueled innovation at Google, and has helped wreak havoc on old media companies. The engineers who come to Mayer’s office seeking encouragement and company support for their projects often start with the same assumption Page and Brin do: that the tried-and-true ways of doing things are outmoded.

Google Voice, a suite of mobile phone services, provides a good illustration of how the company’s engineers think. They began with their favorite question, Why? If we use the Internet for phone calls, they wondered, why can’t all telephones have a single number? Why do we need multiple answering machines? Why do we need to switch phone numbers when we move? Why do we need to wait to listen to phone messages? Why can’t we convert them to text messages instead? Why can’t we record phone conversations if the other party consents? Why can’t our phones block telemarketing calls or make sure certain people are screened out? Because it’s over the Internet, why can’t most calls be free?

For its beta test, in 2007, Google introduced for a relatively small group a service that would work as Google Voice does. It was called GrandCentral, the name of a start-up Google acquired a few years earlier. With their regular phones, in the initial GrandCentral pilot project, users called into a voice mail service, then pushed a button to get a dial tone. They were now on the Internet. It was free and convenient. Users liked it but Google treated it like a “maybe” product, making no commitment to expanding the service. The snickers from those who thought the Google test must have failed, as David Pogue noted in the New York Times, became sneers.

In March 2009, Google Voice was announced, and the sneers turned to gasps. Everyone in the telephone business—from telephone companies to new entrants like cable companies to eBay’s Internet phone service, Skype, which imposes small charges on calls made on regular phones—had reason to be concerned. Google would at first give away the phone service for free, with a nominal charge for long distance calls, and hoped one day to sell the service to corporations at a low price.What was an advance for consumers was a potential setback for these companies. They were being Googled.

Once again, Google’s engineers proved their brilliance. They had devised the simplest, most cost-efficient way to accomplish a task. What impact Google Voice might have on the thousands of jobs in the telephone industry or on local communities was not a question the engineers asked. Nor did they ask about privacy. Because Google would be gathering data on the calling habits of its customers, there were obvious privacy questions. Nor did they ask what the ramifications were for a society if Google Voice succeeded and became as dominant in telephony as Google is in search, online advertising, YouTube, or digitized books. These questions were beyond the pay grade of the engineers.

Many Valley companies, and others, have modeled themselves after what Chris Anderson calls “the biggest company in history built on giving things away.” In his book Free, Anderson cites the many companies that offer free services, from Twitter to Facebook to MySpace to Yahoo’s photo-sharing service, Flickr, to e-mail services to Wikipedia to craigslist to news aggregators like Digg to the free shipping and returns offered by the online shoe retailer Zappos. By offering free services, Google has reinforced the notion that traditional media now wants to combat—that digital information and content should be free. “This is the Google Generation,” writes Anderson, “and they’ve grown up online simply assuming that everything digital is free.”

Many Valley companies have now copied Google’s 20 percent time, including the one Bill Campbell chairs, Intuit. Facebook offers subsidized housing for employees who live within a mile of the office, free meals, parking, gym memberships, laundry services, and a host of other benefits that mirror Google’s. “Google has raised the bar for everybody in the Valley,” said Campbell. “Everyone has to respond to the pressure that said, ‘If the engineer is good, we better hire him before Google does.”’

Of course, Google has borrowed as well as led. Stanford president and Google director John Hennessy, who once chaired his university’s computer science department, believes some Google ideas—such as the 20 percent time—can be traced to Stanford “and the academic world,” where Stanford graduate students like Jerry Yang and David Filo on their own time in the computer lab concocted the idea for Yahoo. Page and Brin have acknowledged that they took cues from the generous way Genentech treated its medical scientists, including a 401 (k) plan that matched up to 5 percent of their salaries; this was one of the reasons they recruited its CEO, Art Levinson, to join Google’s board. Google has a pet dog policy—allowing dogs to accompany owners to campus, providing an outdoor space, offering veterinary services—that Larry Page said was copied from Netscape.

Nor is Google unique. Netflix drives its employees hard but among other generous benefits, it lavishes unlimited vacation time on them. The e-commerce site Zappos encourages employees to point out any other employee who does outstanding work; that person then gets a fifty-dollar bonus from the company. Zappos also employs a full-time “life coach” who lets employees vent and serves as a corporate shrink.

Google has done something else that sets the best companies apart: it earned its customers’ trust. Google regularly ranks among the world’s most respected corporate brands. All companies endlessly talk about achieving brand status, but few attain it. They fail because they often confuse brand with name recognition; they don’t recognize that brand is a synonym for trust, which is not something that can be purchased with a rich marketing budget. Most consumers trust the information in the New York Times, the Think Differentness of Apple, the taste of Coca Cola, the safety of a Volvo, the bargain prices at Wal-Mart or Southwest Airlines. If we think of the Internet as a copying machine that produces free information, as one of the founders of Wired magazine, Kevin Kelly, wrote on his blog, then “how does one make money selling free copies?” Kelly’s answer: “When copies are free, you need to sell things which cannot be copied.” The first of these, he said, was “trust,” which is not duplicable. “Trust must be earned, over time.”

That trust is founded, in part, on a feeling that a company both serves noble ends and yields wealth for its shareholders. Recall the “Letter from the Founders” that was part of Google’s 2004 IPO, in which Page and Brin declared, “Google is not a conventional company. We do not intend to become one.” They said they would focus on users, not investors, and that they’d be concerned not with “quarterly market expectations” or paying dividends but rather with protecting Google’s “core values.” In a Q&A published as part of Google’s prospectus, Brin said the company’s aim was “greater than simply growing itself as large as it can be. I believe large, successful corporations ... have an obligation to apply some of those resources to at least try to solve or ameloriate a number of the world’s problems and ultimately to make the world a better place.” They would try to serve, as Eric Schmidt said, as “a moral force.” The combination of free services, coupled with principled stances like its refusal to allow advertisers to rent space on its home page, or its insistence on a customer service that communicates to users that Google wants to get them to their destination quickly and without trapping them, have helped convince consumers that these goals were genuine. When the tsunami struck Southeast Asia in December 2004, Google made a billboard on its home page to alert searchers to the various international relief efforts they might assist. In 2008, Google Flu Trends began tapping the company’s database to predict flu incidents well ahead of the health warnings issued by the Centers for Disease Control. “Who would have thought,” said Steven Rattner, then managing partner of the venture capital firm Quadrangle, “that a bunch of computer geeks would turn out to be the best marketers of the twenty-first century?” Little wonder, then, that Google in 2009, as in prior years, was again ranked by Fortune as one of the “World’s 50 Most Admired Companies.”

Bill Gates, like Page and Brin, has always believed a corporation should be concerned with looking over the treetops. Before Page and Brin were out of college, he refused to deliver dividends to Microsoft’s shareholders, believing this money should be reinvested. But unlike the Google founders, Gates thought a company like his had one obligation: to increase its wealth. He also once said that he would not begin to make large personal charitable gifts until he had stepped down as CEO and could concentrate on making intelligent choices. He changed his mind in part because his marriage to Melinda French Gates broadened his thinking and gave him a partner, because his parents’ generous charitable endeavors had an impact, and because age had mellowed him. Starting in 2000, long before Google established its own effort, the Gates Foundation has been extraordinarily generous and smart about leveraging its resources to affect real change. More recently, Gates has enlarged his view of a corporation’s role. In a speech to the 2007 graduating class at Harvard, and again in a January 2008 address to business and government leaders attending the World Economic Forum in Davos, Gates called for a “creative capitalism” that relies on market forces to address the needs of poor countries. In an interview with Robert Guth of the Wall Street Journal, Gates spoke of the shortcomings of capitalism. He said he was troubled that innovations in education or health care tend to skip over poor people, and he proposed that successful companies spin off businesses that have “a twin mission” of making money and “improving lives.”

Over the years, it has not been unusual to hear Silicon Valley companies sound like social service agencies. In 1995, the newly founded Yahoo declared, “We believe the Internet can positively transform lives, societies and economies.” Craig Newmark, the founder of craigslist, extols “nerd values,” by which he means that he is intent on keeping his listings free for most of his users and refuses to enrich himself by selling his company or taking a large salary. Social idealism has been a core value in the culture of the Internet, from the insistence of Tim Berners-Lee, who believed that the Web should be open and that he would not patent it or enrich himself; to the open-source movement; to Wikipedia, which follows a democratic faith in “the wisdom of crowds” and has adopted a nonprofit model.

Before one dismisses these approaches as the gauzy thinking of left-wing populists, consider how often traditional companies now promote their own “corporate social responsibility”—in part to ecumenically emulate Andrew Carnegie, in part to bathe in the favorable publicity, in part to profit from some of these endeavors, and in part as a reaction against almost daily ethical business lapses. Companies like the Gap and Hallmark donate a portion of their profits to fight AIDS; Starbucks gave comprehensive health care to its employees, including part-timers. General Electric devised what it called an ecomagination strategy to address climate change and reap profits from it. WPP started issuing a Corporate Responsibility Report in 2002, and has promised to reduce its carbon footprint by 20 percent. One of America’s most powerful marketers, Jim Stengel, in late 2008 left his job as global marketing chief for Procter & Gamble to fund a private consulting venture to advise companies how to build trust in brands. His task, he said, is to create “emotional equity,” by which he means that consumers will believe the company cares not just about their dollars but about them. This is what P&G did with Pampers, consulting parents and designing diapers that felt more like cloth and kept babies warmer. And the Harvard Business School, in 2009, introduced a voluntary oath, which 20 percent of the graduating class signed, pledging to “serve the greater good” and avoid advancing “narrow ambitions.”

True, do-goodism is often a marketing ploy. True, the idealism one encounters at Google can be tempered by its business realism, as when Google placated the government of China, or denied that it wanted to snare a chunk of the income of media buyers like Irwin Gotlieb. It is also true that waves can inflict real damage. Google creates jobs, and it also destroys them. This poses life-and-death questions for traditional companies.

I asked Tom Glocer, CEO of Thomson Reuters, “Does Google help or hurt Reuters?” For a moment it seemed that Glocer was not going to answer. “My pause,” he said finally, “is the pause of a time frame. To date, they’ve been neutral to positive.” In the short run, Google has served as a spur, compelling traditional companies to “raise the level of our game,” just as Wall Street brokers had to improve their services and information to compete against online services like E-Trade or information sources like Yahoo Finance or CNBC. In the long run, he continued, “What everyone’s waiting to see is whether ‘Do no evil’ is true to the credo, their real inner core, or is it just a convenient sort of ’Don’t worry, Don’t worry‘—until they’ve built up such an amazing personal database about all of our habits and they then go to the New York Times and say, ’By the way, if you want the search engine to include your content, you’re going to have to start paying us.‘ ... They’ve created with software a narrow strait through which most people need to pass to do an activity that is at the root of much of what we do on the Web.... The fear is that an increasing number of businesses depend on Google to get their eyeballs. At a certain point, Google can flip their business from being a utility” to a gatekeeper that charges for access.

This power imposes constant pressure on other companies. “You can’t wait for the wave to get there. You’ve got to start paddling,” said Peter Thiel, who was cofounder and CEO of PayPal, and is now president of Clarium Capital Management, a global hedge fund and Silicon Valley venture capital firm. “If you were running a railroad company in the 1940s and people started to fly airplanes, what would you do?” I asked Thiel what he would do if placed in charge of a traditional media company. He said there were two choices. Either you push consolidation and cost cutting much further than media companies have done. Or you “do something radically transformative.” On paper, the radical solution is more appealing. One question is how to adopt a radical solution, such as for newspaper companies publishing only a free Web edition, without destroying what you’re trying to save. One impediment is that in the digital age the transformation often depends on engineers, and media and engineering, as we’ve seen, are from different planets. “This is not a problem specific to media,” Thiel said. “When we started PayPal in 1998-99, we asked, ‘Why can’t the banks do this?’ They did try to copy us, but you needed engineers and the large financial institutions were not able to build it. The caliber of our engineers was significantly higher. Nothing against these companies, but if you’re a talented engineer, why would you go to work at CitiGroup? Why would you go to work at a place where your contribution is not seen as central to the success of the organization? If you’re a politician, you want to be in D.C. If you’re a finance person, you want to be in New York. If you’re an aspiring actor, you want to be in Los Angeles. If you’re an engineer, you want to be in Silicon Valley”

Most traditional media companies, including those that have a reasonably good relationship with Google, are worried that they will be Googled. But there is a larger context for their insecurity They are anxious about technological innovations that can quickly disrupt their businesses; about maneuvering in a world where corporate partners are also competitors; about how rapidly their businesses can change; about not being embarrassed by the omnipresent bloggosphere. Not long after he relinquished his CEO job at Disney, Michael Eisner flew JetBlue from Burbank to New York. “When I landed, I opened my BlackBerry and there was my picture on JetBlue. On JetBlue! In a blog saying, ‘Has something happened to Michael Eisner that he can’t afford a private airline or a big-time airline?’” He laughed about the incident, but used it to illustrate how cell phone cameras and bloggers transform private actions into public acts. The stage has widened.

The Internet and its Google surrogate impose pressure on companies to simultaneously play both offense and defense. Jeff Zucker, CEO of NBC Universal, explained that to be a CEO in the digital age “feels incredibly exciting, and incredibly scary.” He is aware of how quickly businesses can collapse, as did Wang and Gateway and Compaq computer, and of the ups and downs of companies like Motorola or Sun or Yahoo. He is wary of too quickly embracing a fad, as CBS seems to have done when it invested in Joost, a free Web site offering licensed full-length TV programming. After winning coveted innovation awards—and the commensurate buzz—when it was introduced in 2007, today Joost stumbles and in mid-2009 exited the consumer video market. Zucker is aware of the danger of throwing overboard the wrong business, as the company that once owned the NBC network, RCA, did when it decided at the start of the seventies to abandon consumer electronics. Convinced that no new breakthroughs were possible in consumer electronic products, RCA stood still while Apple and Microsoft and Sony surged. “What we all worry about,” said Zucker, “is destroying value as we innovate. And not letting that paralyze you is really the pressure that I personally feel. The scariness is not that I’m going to miss an opportunity, but that the business model will be destroyed as we’re innovating.” The “Innovator’s Dilemma.”

Every media company is speculating on where the digital wave is heading and how to ride it. This much is clear about Google: the company has a big appetite. After I watched the 1,500-strong Google sales force gather at the Hilton in downtown San Francisco, I met Eric Schmidt in a hotel conference room. Pressed to describe Google’s growth strategy, he was jaw droppingly candid. “All large media companies are both distribution and content companies,” he said, and “we really are competing with the distribution” side of these companies. Google wants to be the agent that sells the ads on all distribution platforms, whether it is print, television, radio, or the Internet. To advertisers, he said, “We say, use us.” In addition, he said, “As our technology gets better, we will be able to replace some of their [large companies‘] internal captive sales forces. They are not doing that much work; they are not automated. So the eventual goal is, again, to replace some of these sales functions by automation.”

So Google will disintermediate the functions of these traditional media companies? Schmidt disputed the word, but not the effect: “Disinterme diation is not the correct word to use. It’s better sales technology.”

He thought mobile phones would probably be “a smaller target for us” because to get on those platforms Google would have to pay large fees and cede control to telephone companies. Perhaps the biggest future opportunity for Google, he said, was YouTube. “If that works,” he said of YouTube’s effort to sell advertising and, he admitted, to become a content company, “then that’s the creation of the equivalent of the CBS network in the 1950s. It’s the creation of both content and a monetization mechanism.”

Sergey Brin told me that it is Google’s willingness “to experiment,” to “take risks” and “innovate”—to do the bold things Schmidt described—that will continue to set Google apart. However, companies with large appetites can get fat. Marc Andreessen believes Google aims “to do everything,” but is dubious that they can succeed. Andreessen also believes that in the digital age, technology alters the competitive battlefield, just as it did in World War II. Germany in 1940, as New York University professor Clay Shirky points out in his provocative book Here CornesEverybody, was not the invincible power “etched in communal memory” Germany teetered near bankruptcy; its army was smaller and its tanks were inferior to France’s. So why did the German blitzkrieg succeed? Because its tanks were equipped with a technology the French tanks lacked: radios. These radios allowed Panzer commanders to share intelligence and make quick decisions, leaving French commanders standing still and guessing while German tanks moved in concert. Even if the French had radios, Shirky writes, the Germans held another advantage: “The French regarded tanks as a mobile platform for accompanying foot soldiers. The Germans, on the other hand, understood that the tank allowed for a new kind of fighting, a rapid style of attack....” The technology advantaged Germany, but so did a superior strategy that allowed Germany to prevail.