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.