Googled: The End of the World as We Know It
PART TWO The Google Story
CHAPTER THREE Buzz but Few Dollars
(1999-2000)
In early 1999, Google didn’t look like a company that would one day menace Microsoft. Aside from the one million dollars received from its four initial investors, and small amounts collected in the past half year from a handful of other angel investors like Ron Conway, Brin and Page had just a few sources of income: a twenty-thousand-dollar-per-month contract to provide specialized search results to Red Hat, a North Carolina consulting firm that advised companies using Linux and other open-source software, and the licensing of its search to several Web sites. Google had indexed only about 10 percent of the Web, and relied on a relatively primitive computer system to process search traffic that would explode from ten thousand to as many as five hundred thousand daily, each of which took three to four seconds to fetch results. To grow, Page and Brin knew their search engine had to “scale”: it had to crawl the entire Web, which would require vast computing power.
The first priority was recruiting engineers. By the end of 1998, a total of six Google employees were crammed into the garage and two small bedrooms. They’d need more room if they were going to expand. So in early 1999 they relocated to a five-thousand-square-foot second-floor space over a bicycle store in downtown Palo Alto, where they balanced more pine doors on sawhorses to make desks and began hiring engineers to fill them. The result was “a graduate-student Disneyland,” Michael Specter wrote in The New Yorker in 2000, stocked with hockey sticks, Rollerblades, granola, PowerBars, “urns of coffee, and coolers of fruit juice to drive anybody through to 4 A.M.—which is not an unusual time to find people in the office.” Even then massages were part of the Google culture; there was a sign advertising that the service was available in the conference room—when the room was not being used for work. A green Ping-Pong table served as their conference table, and that was where, in April 1999, they interviewed Marissa Mayer, then completing a computer science degree from Stanford. It was the peak of the Internet bubble, and the cream of graduating engineers like Mayer had their pick of jobs. Mayer is a brilliant engineer and a proud computer nerd, but with her porcelain skin and lustrous blond hair she seems far from the stereotype—until one hears her jarring high-pitched giggle and tries to follow her words, which gush so rapidly that they collide. Brin, aware of her interest in using math to solve puzzles like how to make a Web site user-friendly, quizzed her for more than an hour. “Larry said nothing the entire time. At the end of the interview I asked, ‘Do you speak?’”
She fit right in, and was invited back the next day to be interviewed separately by three engineers, who put her through the equivalent of a Ph.D. oral exam. Before making her an offer, Brin posed to his colleagues what has become known around Google as the airplane test. How would you feel, he asked, if you were stuck next to this person on a plane for several hours? Any candidate who failed this test was unlikely to be a good collaborator or team member. Mayer passed the test and became one of Google’s first twenty employees. (Because she was hired before completing school, Mayer is only certain she was between the fifteenth and twentieth employee.) Like all new employees, she was granted stock options that would one day make her wealthy, in her case enough to own a five-million-dollar penthouse apartment at the Four Seasons Hotel in San Francisco, filled with Andy Warhol and Roy Lichtenstein paintings, and a large, three-level Cape Cod house in Palo Alto.
Google now had a team of engineers but no idea how to attract new investors. Ram Shriram recalled telling Brin, “We need a business plan,” to which Brin replied, “What’s a business plan?” Weeks earlier, Salar Kamangar, a biology major at Stanford who was taking a fifth year to study economics, had volunteered to work for free. With Shriram as a tutor, he was drafted to draw up the business plan. Kamangar, employee number 8, prepared, he said, “a binder on what other companies were doing in search and what was different about Google.” Page and Brin were pleased, and asked him to develop a PowerPoint presentation to show potential investors that Shriram and Bechtolsheim were introducing them to. The founders also asked Kamangar to attend these meetings, but first needed to give him a title. They decided, he said, on “senior strategist.” In their first business plan, Google had a sketchy idea that they’d make money by charging companies for advanced search results and by getting digital advertising companies like DoubleClick to sell online ads of some kind. The revenue plan wasn’t very impressive, but the search engine was. Users were multiplying. Secrecy was the watchword. While Google search was still small, he knew it was much larger than competitors anticipated: “We were in stealth mode,” Kamangar said. “If first Yahoo and then Microsoft knew that our number of searches was so much larger, they would be more aggressive.” Repeatedly, Page explained his mania for secrecy by invoking the example of Tesla.
Google had to sell the venture capitalists (VCs), but they also had to build a sales force to secure revenues, and for this task they required an experienced senior strategist and salesman. Netscape had just been acquired by AOL, and Shriram knew that Omid Kordestani, the Iranian-born vice president of business development at Netscape, was ready to move on. He orchestrated a meeting between Kordestani and the founders. On paper, Kordestani was a perfect fit for vice president of sales and business development. He held an MBA from Stanford’s business school, an undergraduate degree in electrical engineering, and the natural enthusiasm and agreeable personality of a salesman. But first he had to endure a free-for-all Ping-Pong table grilling by the founders and the engineers. Brin opened the interrogation by saying, “I’ve never interviewed a business person before.” From that inauspicious beginning, Kordestani remembers, “They drilled me for five hours.” At the end, no job offer was tendered. The founders had an aversion to business executives, stereotyping them as bureaucrats, not entrepreneurs, and they wanted reference checks. They asked the angel investor who wrote their first check, Andy Bechtolsheim, to make some calls.
“It was a very thoughtful process,” Kordestani said, perhaps euphemistically; the eventual job offer was followed by two weekends of intense negotiations in February 1999 with the founders and then with David Drummond, Google’s outside counsel at the powerhouse Valley firm of Wilson Sonsini Goodrich & Rosati. (That the hiring process was so laborious would provide good preparation for Drummond; he himself would undergo a milder version of it in 2002, when he was hired as Google’s chief legal officer and vice president of corporate development.) Drummond remembers how in the early days of Google, Page and Brin would visit Wilson Sonsini’s offices and minutely inspect every legal document, asking him to explain each detail. Kordestani was finally hired, and received a hefty 2 percent of the phantom stock, more than any Google employee aside from the founders and Eric Schmidt, who joined in 2001; when Google’s stock soared, Kordestani was a paper billionaire.
The hiring process at Google in some ways paralleled the algorithmic approach to search. Although the founders applied the airplane test, that criteria was less important than the premium they placed on SAT scores and on grades and degrees from the best colleges. Real-world experience counted less than objective measurements. The thought that an entire human being could be judged by objective criteria was preposterous. It was a reminder of the tunnel vision Brin and Page—like so many young entrepreneurs—brought to their work. One reason they succeed is that they refuse to be diverted from their goal. But aside from the business books Page read before he started Google, he and Brin were relatively narrow in scope, without a 360-degree view of the world.
The hiring process did have its light moments. David Krane was working in public relations at a software company when he heard about Google. He was taken with the quirky sensibility he found when he clicked on the “About Google” button on their Web site. The son of a nuclear physicist, Krane once harbored hopes of becoming a musician. He was enamored of technology and was a rarity among PR people in that he could explain the difference between PQA (palm query application software, which allowed Web material to be seen on a handheld device) and HTML (hypertext markup language, the dominant Web language). A friend passed his ré sume to Google’s then vice president of corporate communications, Cindy McCaffrey, who was hired in July 1999 as employee number 26. She interviewed him, as did countless other executives over the next four and a half months. Finally, separate interviews were arranged with Page and Brin, both of whom found public relations and marketing a form of huckster-ism. It was no surprise that the first question Brin asked was, “Explain something technical to me? Topic of your choice.”
Ideas rushed to Krane’s brain, and he made a surprising choice. He explained how to make a reed for a clarinet, how to file and test and tweak it so the musical tone was clear and warm.
Brin listened, then quickly moved on to his second question: “Have you ever heard of Slashdot?”
Slashdot was a technology news site that encouraged user-generated comments, a pioneer of what came to be known as blogging. Krane smiled and pulled from his pocket a geeky badge of honor: a Palm 7, which permitted a wireless Internet connection to one of his favorite sites, Slashdot .com. “I thought,” said Krane, “I had aced the interview!”
Brin shook hands and left, and Page entered. “He greeted me in a very reserved way. He asked me the equivalent of a tell-me-about-yourself ice-breaker question.” Krane waltzed through his life, his interests, his passion for Google. “I wasn’t getting any kind of signal back from Larry. It was like talking to a stone wall.” He thought, “I’m sinking!”
Desperate, he began to talk about music, and his musical training. He completed maybe three sentences when Page excitedly interrupted, “That’s where I know you!”
Krane was mystified.
“That’s where I know you! I was at Interlochen too, that same summer! And I also played saxophone!” They swapped memories of the three months at Interlochen Arts Camp. “We figured out that we sat next to each other. Larry was in my left ear in the same jazz band. I played tenor sax and he played alto sax. We were both joined by acne, big glasses, and blue corduroy pants and light blue polyester short-sleeved shirts with a big butterfly collar, the Interlochen uniform.” Days later, Krane was hired on as employee number 84. Today he is Google’s director of global communications and public affairs.
As the business took shape, the founders thought more and more about aesthetics. They wanted a home page that was both playful and uncluttered, so they hired a Stanford design teacher named Ruth Kedar. Her instructions, she recalled, were clear: “Google wanted to create a unique logo that would clearly differentiate them from the other search players at the time.... These other players were commercial portals first, and search engines second. Google wanted to convey that it was a search provider first and foremost.... Google as a brand should repudiate all things corporate, conventional or complacent.” The design was meant “to look almost non-designed, the reading effortless. The colors evoke memories of child play.”
Years later, Page and Brin demonstrated their playful irreverence. It was April 1, and the white space on the Google home page suddenly carried a line under the search box: “A Cool World: Enjoy a rosier future as a Virgle Pioneer.” When the link was opened, an invitation appeared to sign up for an “Adventure of Many Lifetimes.” The invitation read: “Earth has issues, and it’s time humanity got started on a Plan B. So, starting in 2014, Virgin founder Richard Branson and Google co-founders Larry Page and Sergey Brin will be leading hundreds of users on one of the grandest adventures in human history: Project Virgle, the first permanent human colony on Mars.” The site described the alleged deprivations, including low broadband rates and physical hardships and potential death. It was an April Fools’ joke.
The home page design, and a few glowing mentions about its search prowess in media like PC Magazine, generated some buzz about Google in the Valley. Ron Conway, the angel investor, recalled a reception attended by Shawn Fanning, the founder of Napster, who had become a poster boy for the digital revolution. Brin and Page were unknowns and Conway remembers them approaching Fanning and saying, “What does it feel like to be on the cover of all those magazines?”
“You guys have a really cool search product,” responded Fanning. “You’ll be more famous than I am!”
Danny Sullivan, a former reporter who left newspapers in 1996 to publish a Web newsletter called Search Engine Watch (now called Search Engine Land), and who is the closest approximation to an umpire in the search world, remembers the early buzz about Google. The initial search engines—AltaVista, Highbot, Lycos, Excite, Infoseek, GoTo, Yahoo—were more interested in becoming “sticky portals” that trapped users on their sites, which diluted their focus on search. And when they performed a search, they were not impartial, allowing advertisers to buy their way to the top of the search results. Google, by contrast, “was really dedicated to search,” and refused to allow advertisers to distort the “science” of their search results.
Despite their young age—they were twenty-six-and the tight focus of their education, Brin and Page had extraordinary clarity about what search users might want. They rejected the conventional wisdom embraced by AOL and Yahoo and Microsoft’s MSN to create portals and try to keep users in their walled garden with an array of content. They believed the right approach was to get users out of Google and to their search destination quickly. They rejected advertisers who wanted to place banner ads alongside search results, because the banners slowed results, were not intrinsic to search, and were a distraction. In the late nineties, when pop-up ads were the dominant way to advertise on the Web, the founders had the Google tool bar block them. They declined to place ads on their most valuable piece of real estate, the uncluttered opening Google page containing the search box.
Brin and Page resisted ads because they shared an allergy then common among Webheads and many folks who attended Burning Man: that advertising was like a rude stranger interrupting a conversation to sell you something you neither wanted nor needed. “These guys were opposed to advertising because they had a purist view of the world,” said Shriram. Like some Burning Man attendees, Page and Brin were—no other word will do—odd. Barry Diller, the CEO of the InterActiveCorp, a diverse collection of such e-commerce sites as Expedia and Ticketmaster, recalled visiting Page and Brin in the early days of Google. As they talked, Diller was disconcerted to see that Page did not lift his head from his PDA device; and Brin arrived late, on Rollerblades. “It’s one thing if you’re in a room with twenty people and someone is using their PDA,” Diller recalled. “I said to Larry, ‘Is this boring?’”
“No. I’m interested. I always do this,” said Page.
“Well, you can’t do this,” said Diller. “Choose.”
“I’ll do this,” said Page matter-of-factly, not lifting his eyes from his handheld device.
“So I talked to Sergey. I left thinking that more than most people they were wildly self-possessed.”
The founders may not have had a clue how to make money at Google, but they were clear that their mission was to build a great search engine and offer this search for free. Susan Wojcicki, the engineer who rented her garage to the founders and became employee number 18 and who later introduced her sister, Anne, to Brin, said the founders “were on a mission to build the best search engine,” and “early on understood that what mattered were users.” Their initial mission statement declared that they aimed “to organize the world’s information and make it universally acceptable.” This mission on its face was not as crassly commercial as Microsoft’s. Bill Gates’s quest was to put “a computer in every home and on every desk.” Each computer sold increased Microsoft’s dominance over the software market for the PC. Google’s missionary zeal, coupled with the fact that its search was free, cloaked its lust to also build a profit-making machine.
Building the machine, however, required capital. Relying mostly on original angel investors Shriram and Bechtolsheim for business advice, the founders decided early on to seek funding from more than one venture capital firm, so as not to rely on a single source of funds, and to assure their independence by selling no more than one-quarter of the company. They set out to recruit two of the most prominent VC firms in the Valley, Kleiner Perkins Caufield & Byers, whose senior partner John Doerr was a trained engineer who had helped fund such start-ups as Amazon, Netscape, and AOL, and Sequoia Capital, where Oxford-educated former Time magazine reporter Michael Moritz was a partner and an early backer of Yahoo and PayPal. Doerr remembers the meeting vividly. They met in the conference room next to his glassed office on Sand Hill Road. Page and Brin made a brief PowerPoint presentation to establish the most telling facts: by the end of 1998 they had indexed twenty-six million Web pages and were now doing half a million searches a day. Doerr was impressed. Instead of a long-winded explanation of their mission, Page and Brin made a high-concept pitch consisting of eight words: “We deliver the world’s information in one click.”
“I asked Page,” Doerr recalled, “‘how big will Google’s business be?’”
“Ten billion,” he said.
“Surely you mean market cap?” asked Doerr.
“No, revenue,” answered Page. He did not volunteer that they had no plausible revenue plan; instead he expressed faith that they would find a way to monetize their exploding search traffic. Pulling out a laptop, they demonstrated how much faster and more relevant a Google search was than those of other search engines.
“I almost fell out of my chair!” Doerr said. It was “one of the most extraordinary conversations I ever had in my life. I knew in that first meeting I wanted to invest in this business.” Page and Brin were similar to other founders he had funded—young men who had dropped out of school, who spoke quickly and were consumed by their work—but Doerr was struck by what he calls their audacity and singular focus. Doerr had been an investor in Excite, an early search engine, and had seen how the company lost focus as it chased becoming a portal. Moritz, too, was sold on Page and Brin’s “devotion to their dream. They were on a mission. We’ve learned over the years to pay close attention” to this kind of clarity. Besides, he added, “Their product was better.”
The plan was for Doerr and Moritz to sign a contract certifying that the two firms valued Google at $100 million and would invest a total of $25 million. There were some hitches, though. Each VC wanted to do the deal alone, but Page and Brin would not budge, insisting they do it together or not at all. And Doerr and Moritz were worried that Page (the CEO and chief financial officer) and Brin (the president and chairman of the board of directors) had between them roughly zero management experience; they wanted the founders to recruit professional managers. After protracted discussions, they finally reached a verbal agreement. “The understanding when we invested was that a CEO would, among others, be hired over time,” Moritz said. The founders would ignore this understanding, which later created some friction. They hit one other speed bump. While the parties were haggling, recalled Shriram, Brin phoned him and said he had met with another venture capital firm, one Shriram had earlier recommended. The VC told Brin that Google was worth $150 million, substantially more than the current estimate. “Should we do it?” Brin asked. Should they dump Doerr and Moritz in favor of the higher valuation?
“You’re already committed,” Shriram told Brin.
Nevertheless, Shriram recalled later with a smile, “Sergey mentioned this to Doerr and Moritz and it speeded up the process!” Brin, he said, is no Boy Scout, but rather a sly, dexterous deal maker: “I think of him as Kobe Bryant, a game changer.”
ON JUNE 7, 1999, Google issued its first press release announcing that Kleiner Perkins and Sequoia had invested twenty-five million dollars in Google. They also held their first press conference, in a small room in the Gates building at Stanford. Page and Brin, wearing white tennis shirts with the Google logo, sat at a Formica table flanked by Doerr, Shriram, and Moritz. Andy Bechtolsheim, Rajeev Motwani, and Terry Winograd sat in the audience with five reporters. As the journalists looked on, the founders gave a lengthy explanation of the technicalities of PageRank, their methods for indexing the Web and devising algorithms, their notions of “latency” and “scale,” and just about anything else they could think of.
At last a reporter asked the obvious question: How does Google plan to make money?
“Our goal,” Brin said, “is to maximize the search experience, not to maximize the revenues from search.”
At what appeared to be the conclusion of the press conference, Brin rose with a broadly smiling Page beside him and said, “If you want to ask more questions, fine.” He invited the reporters to stay and take a Google shirt and share refreshments. Unlike today, where their press appearances are not frequent and are treated, certainly by Page, as occasions to be endured, a home video of the press conference suggests that the two of them would happily have lingered all day.
Google’s next business breakthrough came later that same month. Omid Kordestani negotiated a deal with Netscape and its new corporate owner, AOL, to designate Google as the default search engine for the popular Netscape browser. The deal boosted Google searches to more than three million per day. “That was pretty exciting,” said Brin. “That was a big deal for us.” It was a major endorsement of Google. It was also a major test, bringing in huge numbers of searchers. “We got overwhelmed with traffic. It was our first big search engine crisis,” remembers Craig Silverstein. “We shut off Google.com that day to everyone but Netscape—till we could buy more computers!” They were burdened by another traffic jam, remembers senior software engineer Matt Cutts. When he joined the company in 1999, among his first tasks was to figure out how to block pornography searches, which accounted for one of every four queries. His solution was to assign a lesser weight in the Google algorithm to the words commonly used in porn searches, or for Google’s engineers to misspell the keywords in the Google index so the porn was difficult to retrieve. First he had to figure out the pertinent words. He spent hours poring over porn documents. Then his wife came up with the idea of baking cookies and awarding one “porn cookie” to each engineer who discovered a salacious keyword. Porn search traffic plummeted.
By the summer of 1999, Google was flush with cash and had outgrown the five-thousand-square-foot Palo Alto office, where forty employees now knocked knees when sitting at their desks. They needed to move, so Susan Wojcicki called in a real estate agent, who suggested the founders clear their schedules to visit possible sites. The founders thought this was a waste of their time. They knew what they wanted: to re-create the feel of the Stanford campus. Wojcicki remembers their saying to the agent, “Why don’t you go look at buildings and take some pictures and bring them back to us?”
In August, Google leased part of a two-story building rimmed by trees on Bayshore Boulevard in bucolic Mountain View. Initially, they rented the second floor but quickly expanded to the first, then to another building next door. It had obvious attractions: it was barely a ten-mile bike ride north to Stanford University, and in the distance to the west, the Santa Cruz Mountains formed a visible border. But unlike Palo Alto, where employees could walk to lunch, a meal in Mountain View required driving. The offices quickly became littered with pizza boxes and Chinese-food containers. The founders decided they’d need a chef. They’d select one in the same way fraternities and sororities at Stanford did: by having a Chef Audition Week. One chef, Charlie Ayers, “blew everyone away” with his array of “gourmet comfort food—like spaghetti and meatballs,” said Marissa Mayer. (It helped that Ayers was the former chef for the Grateful Dead.) He was hired in November to supervise the preparation of favorites like pizza and hamburgers, and also what he called big-ass barbecues, as well as vegetarian stir-fry, salads with lush tomatoes and fresh vegetables, carved turkey, fiery chili, lamb chops, steak, and generous slabs of sushi, to which he affixed an attractive New Age explanation: “The fat found in fish helps make the cell membranes round the brain more elastic and more able to absorb nutrients easily”
In addition to free food, the founders signed off on an abundance of other amenities that made venture capitalists uneasy. “I think they were a little bit perturbed to see the front-page stories in the San Jose Mercury News that we were hiring a chef and a masseuse,” Brin concedes. “But I think the actual economic and productivity outcome of this they grew pretty quickly to accept. They just didn’t think we should be known for that [profligacy].” He explained how he and Page approach free food and employee benefits: “A lot of it is common sense, a combination of common sense and questioning rituals.” Generous benefits help recruit and retain employees, he said. Compelling employees to drive for meals, and find parking “would be a real productivity sink ... and they’d probably not eat healthy food.” Besides, he added, waiting in line to pay would waste more time.
For all its intensity, Google could be a playful place to work. The first place in the Valley Al Gore visited after he left the vice presidency in January 2001 was Google. He had championed the Internet while serving in Congress and as vice president. His first meeting with Brin, Page, and Kordestani in February 2001 went smoothly, he said. “I liked them and they asked me to help them out and, initially, to join their board,” which he declined because he wasn’t sure whether he’d again seek the presidency. Instead, he said, “They asked me to be—the phrase they used was, ‘a virtual board member.’”
Al and Tipper Gore went on a long European vacation. They returned later in the spring, and newspapers carried pictures of the full beard he had grown. “When I went back to Google, Larry and Sergey and Omid—there weren’t that many of them—all ten of them had false beards on. It was hilarious!”
Google was growing into an informal, open place. At around 4:30 p.m. each Friday, employees now gather in the largest open space on campus, Charlie’s Cafe in Building 40, for TGIF. Refreshments—nachos, mini-hamburgers, pretzels, beer, soft drinks—are available. Employees sit on chairs arranged in a semicircle, with employees at other Google locations around the world on video conference. Brin and Page stand on a small raised platform to share corporate news and to answer questions from thousands of employees. New employees hired that week sit up front, wearing Noogler beanies with propellers on top. Loud music blasts from speakers. The affectionate bond between the two founders is displayed every time they make a presentation together or at these weekly Friday appearances. On stage, Brin is funnier, and tends to dominate, yet in the dozens of times I’ve watched them together, I’ve never noticed a hint of exasperation from Page, who is an intense person but nevertheless laughs easily at Brin’s jokes.
At the first TGIF I attended, in October 2007, Brin appeared wearing what looked like a green pilot’s jacket and Page wore a black one. They were in jeans and sneakers, and took turns talking—introducing the Nooglers; telling of some deals Google had made the past week; showing a video clip of former Alaska senator Mike Gravel, who was a stealth candidate for president, as he gave a speech on campus in which he described his visit as comparable to “an intellectual orgasm.” Brin cracked, “We’ll use that as a recruiting tool!” They fielded questions from employees. And they had a surprise guest calling in from an airplane. The guest was competing with static, and didn’t sound like himself, but managed to say hello.
“I heard that you won something today,” Brin said.
Up on the large screen behind them appeared a picture of Al Gore, who on this day had won the Nobel Peace Prize for his work on behalf of the environment, an award that was featured in the morning papers and dominated the news.
“We all feel grateful to you,” Brin said.
“Thank you, Sergey. And to you and Larry and Eric and the entire team. One of the fun things in my life is to be part of the extended Google family.”
A roar of applause cascaded from the balcony and throughout the cafe, and soon Gore was gone.
“He sounded a little like Stephen Hawking,” joked Page.
The hand of an engineer who spends too many hours in front of a computer screen shot up. “Larry and Sergey,” he asked. “Which prize?”
The personalities of the founders permeate the company. Doerr described Sergey as the “more exhuberant” of the two. “Sergey is more creative, more experimental than Larry is.” One longtime Google executive decribes him as a ham. “I love Sergey,” the executive adds. “He’s an exhibitionist. He needs more attention than Larry does.” Brin does most of the talking, and joking, at Friday TGIF gatherings. In the early days of Google, when they took the entire staff camping for a weekend, everyone had a canoe partner, except Brin. “He said, ‘It doesn’t matter. I’ll swim.’” Wearing a lime-green Speedo swimsuit, he jumped into the lake, becoming the center of attention. One cannot imagine Larry Page agreeing to appear on the game show To Tell the Truth, as Brin did in March 2001. The question posed was “Who is the real Google guru?” Each of the three contestants wore a Google T-shirt, and after questioning them, the four celebrity panelists unanimously guessed that the real guru was panelist number 3, who turned out to be a professional bowler. Only 22 percent of the audience guessed that Brin was the guru. But when it came time to stand and identify the real guru, Brin histrionically pretended to stand, then sat, then rose to shocked audience applause, reciprocating with a slight but delighted smile.
Despite the playfulness, few would describe the founders as ideal mediators. They are often too brusque and intimidating for that role. “Larry can be a little raw, but never unkind,” said Megan Smith, vice president of new business development. A part of the rawness is due to the fact that they are geeks, more comfortable staring at a computer screen than schmoozing, and too zealously impatient to waste time.
Page is more reclusive, and odder. He was once asked at a dinner, according to a dinner guest, “What’s the most important thing the government should be doing?”
“Colonize Mars!” Page said.
Most of the dinner guests nodded as if he had said something profound.
Page can be almost monklike. He ruthlessly guards his time, and can treat those who ask him to make a speech or meet reporters as if they were thieves trying to steal his time. A longtime Google employee describes Page this way: “Larry is like a wall. He analyzes everything. He asks, ‘Is this the most efficient way to do this?’ You’re always on trial with Larry. He always pushes you.”
While Brin is more approachable than Page, he, too, can be awkward around strangers. His wife Anne Wojcicki’s company, 23andMe, was feted at a fashionable cocktail party in September 2008 that was cohosted by Diane von Furstenberg and her husband, Barry Diller, Wendi and Rupert Murdoch, and Georgina Chapman and her husband, Harvey Weinstein. The event was held at Diller’s Frank Gehry-designed IAC headquarters in Manhattan. Brin appeared wearing a dark crewneck sweater and gray Crocs. He and Google are investors in her company and he is openly proud of her work. But she had to quietly beseech him to stay. He did, but hid behind his oversized Canon camera, moving about the vast room or retreating to a corner, always snapping pictures.
THE YEAR 2000 BEGAN with two bangs. The first was that Google entered the new year averaging seven million searches a day, a massive jump from half a million at the beginning of 1999. The second was the sudden crash of technology stocks. Between March and October, the NASDAQ Composite Index, which lists most tech and Internet companies, fell 78 percent. Yahoo’s stock at one point plunged from $119 a share to $4. As a private company, Google was both spared and offered opportunities. “As in any successful venture, there’s a lot of luck,” said Hal Varian. “One of the great things from Google’s point of view was the dot-com collapse in 2000. A lot of talent became available.” Google cherry-picked some good engineers.
But the company was burning through its cash. While Google’s revenues would total $19.1 million in 2000, its losses would be $14.7 million, more than double those of the previous year. And they’d had “zero discussion” about any kind of Google advertising until late 1999, recalled Salar Kamangar, who crafted Google’s first business plan and became vice president of product management. The founders feared ads would slow searches. They still believed Google could outsource monetization to ad firms like DoubleClick, or sell their search services to corporations. Page and Brin were relying on their faith that a way would be found to make money. This faith produced more friction with their two major investors, but Page and Brin were undeterred.
In The Search, John Battelle describes an encounter around this time between Page and Brin and Bill Gross, the founder of the Go To search engine. Gross had come up with an idea: he was convinced advertisers or Web sites would pay more for certain keywords if they could pay on a cost-per-click (CPC) basis, meaning they paid only if the user showed enough interest in a given ad to click on their link and perhaps make a purchase. The price for the keyword and the placement of the ad would be set in an online auction process. By mid-1999, GoTo had a network of eight thousand advertisers, with some paying by the click and others paying a fee to appear at the top of the search results. Gross approached Page and Brin to propose that the two companies merge, reports Battelle, but “Brin and Page turned a cold shoulder to Gross’s overture. The reason given: Google would never be associated with ... a company that mixed paid advertising with organic results.” (Gross later changed his company’s name, GoTo, to Overture, and in 2002 would sue Google for allegedly stealing its cost-per-click model.)
Meanwhile, Google decided to offer its search to other Web sites and to share any revenues. It was a way to extend its reach, and to be paid for the use of its search engine. The most significant deal, signed in June 2000, established Google as Yahoo’s official search engine. Google paid dearly for the privilege, granting Yahoo a warrant to acquire 3.7 million shares of Google when it was issued. And few users knew they were conducting a Google search, because Yahoo wouldn’t allow Google’s branded search box on its page. For Google, the deal was another milestone. Its search traffic doubled to fourteen million on the first day of the partnership.
While most experts by the end of 2000 thought Google had the best search engine, this claim was conjectural. What was indisputable was that Google was now the most-visited search engine on the Web, with one hundred million daily search queries and a worldwide market share of about 40 percent. Yahoo had given Google a boost, but “it was really about the quality of the search,” said Search Engine Land editor Danny Sullivan. “People were coming to Google because they heard about it.” The rapid growth would provide Google a vital and at the time overlooked asset. More searches generated more data for Google about users, which led to better searches, which would eventually lead to more ad dollars.
The question of how to monetize search by turning traffic and data into cash remained unanswered. Unlike AOL, Google didn’t have subscription revenues. And unlike portals such as Yahoo, it didn’t have content sites on which to place banner or display advertising. In October 2000, Google introduced its first advertising program, called AdWords. It was a small beta test, available to 350 advertisers who paid for a selection of search keywords that allowed the advertiser’s small text ads to appear on the side of the search results. It was a self-service program. Companies gave Google their keywords and went online to retrieve data on the number of times users typed their keywords into the search box. The effort was clunky, and grew very slowly.
Although AdWords was a new media advertising effort, it borrowed an old media CPM (cost-per-thousand) model. Much in the way that a television network might know that millions of viewers were exposed to a thirty-second spot, but not whether they actually watched it or made a purchase because of it, advertisers paid based soley on the number of times their ad appeared. There was a link to the advertiser allowing users to learn more about a product, though Google did not get paid if the user clicked through. The program was also limited in that Google could not easily syndicate AdWords to partners because GoTo had already tied up other search engines, making Google less attractive to advertisers. In addition, prominent advertisers were not inclined to place their dollars on search keywords. Giving credence to something that seemed so puny was alien to the brand advertising they were accustomed to. Because Page and Brin insisted that all advertising be relevant to the keywords, Google only allowed ads to appear in 15 percent of all searches, which meant that Google was forgoing advertising dollars if the ads were not judged “relevant.” Page and Brin liked to boast that Google could move on a dime, but their company was moving ever so gingerly to embrace advertising.
They were moving too gingerly for Doerr and Moritz, who admit they were frustrated by Google’s mounting losses. In the eyes of investors, the issues of monetization and management were twined. Good managers would impose the discipline every profit maker requires. “The understanding when we invested was that a CEO, among others, would be hired over time,” said Moritz. The venture capitalists finally persuaded Page and Brin to hire a headhunter to find a CEO, but the young founders were resistant, fearful that “a suit” would subvert the Google culture. They met with about fifteen candidates, all accomplished executives who were invited to attend TGIF, to share meals with the founders in the cafeteria, to sit in on staff meetings. Brin went heli-skiing with one prospective CEO who boasted that he was an expert at the sport. (He wasn’t.) “They thought everyone they had talked to was a clown,” Paul Buchheit said. “The candidates didn’t understand technology.” Omid Kordestani said Page and Brin “knew in their gut that they wanted a fellow intellectual.”
The VCs feared the founders would find an excuse to reject every candidate, which was true. Marissa Mayer said she believes the CEO search was so protracted in part because “they were not convinced it needed to happen.” Mayer knew Page and Brin’s thinking. She was a central member of the engineering team. And she and Page were dating, as they would for about three years. Like most company founders, they believed they could better manage their baby, better ensure the implementation of their vision, better preserve the culture. Asked if the founders resisted, Moritz now responds like a State Department official: “They resisted hiring ordinary people, and that’s a wonderful tribute to them. One of the many lessons I learned from the Google investment is the importance of hiring spectacular people. Sometimes it frustrated us, but they were spot-on.”
Moritz, however, did not feel that way at the end of 2000. “All of us on the board, in particular John and Mike, felt we needed someone who had been there, done that. You can call it adult supervision,” said Ram Shriram. Caught between the VCs and the founders, his “job was to keep the two sides talking,” he said, describing his role as that of “a coach.” Some at Google even feared a VC coup. “The VCs figured, ‘Once we get a CEO in there we’d get control,’” said one early Googler.
Doerr and Moritz arranged for Page and Brin to meet with the founders of other Valley companies, such as Intel, Intuit, and Apple, to talk about management issues. “We like Steve Jobs!” Page and Brin chorused, to the annoyance of the VCs and, eventually, to the consternation of other Google executives. One new hire that year, Tim Armstrong, the president of advertising and commerce, said, “It was chaos when I got to Google.” Executives were needed to manage the brilliant engineers and help set priorities, he said. Under pressure internally and externally, the founders interviewed two computer scientists who met their standards, said Marissa Mayer. One was from New York, the other from the Valley. Both were offered the job, she said. But the New Yorker did not want to relocate his family, and the other thought he was on the CEO fast track at Intel. Both declined the offer.
By the end of 2000, Google had indexed one billion Web pages. But no CEO had been hired, nor had any professional managers, and there was still no clear path to making money. Google had built it, the traffic came, but the revenue had not followed. The venture capitalists worried that Page and Brin were humoring them—and maybe leading Google astray.