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Google it!HOW SERGEY BRIN & LARRY PAGE HAVE
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Page 22
HOW TO CONTINUALLY CREATE NEW MARKETS
Cover story
GOOGLE IT!HOW SERGEY BRIN & LARRY PAGE HAVE
BRAINWASHED US TO
022 AUSTRALIAN Business Solutions
| By Daniel Alef |
Regardless of the language, the word ‘Google’ is recognised
internationally and business analysts from around the world
have likened the phenomenon of ‘Googling’ to brainwashing.
It is synonymous with searching the internet and has entered
our lexicons in the same way ‘Xerox’ and ‘Kleenex’ did years
ago. But there is a major difference. The products developed by
Xerox and the Kimberly-Clark Corporation were significant and
useful but not world- or culture-changing innovations. Google
Inc., the company founded by Sergey Brin and Larry Page, has
altered the world we live in, with a profound impact on just about
everything we do.
The evolution of the term and the company is astonishing.
There were approximately two billion internet users worldwide in
2010, according to the UN’s International Telecommunications
Union. With more than 34,000 Google searches every second,
approximately half of all internet users visit Google daily. But
what is most astonishing is that this has taken place in just
13 years. London’s The Observer called Google “one of the
wonders of the world” from a technological and economic point
of view.
GOOGLE IT!HOW SERGEY BRIN & LARRY PAGE HAVE
BRAINWASHED US TO
AUSTRALIAN Business Solutions 023
024 AUSTRALIAN Business Solutions
It is almost as though the internet came first;
and Google second. Sergey Brin describes the
internet as “the repository of all our knowledge”,
a limitless and ever-expanding source of
information and ideas. If you look at the internet
as a virtual storehouse of knowledge, essentially
an enormous database, it does not take a lot
to figure out that it is only useful if it has an
effective system for retrieving the information,
one that embodies linkage, integration and
accessibility. Google’s search engine is such
system. And as the internet grows minute-by-
minute, the effectiveness and efficiency of the
search engine becomes vitally important.
Sergey Brin and Larry Page have created a
search engine that can delve through trillions of
documents and internet sites in a fraction of a
second. For example, a Google search for ‘Walt
Disney’ produces well over 49 million entries
and 24 million images in .08 seconds. That is a
lot of information to wade through, but Google
has also ranked these entries through a series
of proprietary algorithms that gives us the most
relevant material at the top of the search. Only
a handful of years ago people would have never
thought this to be possible.
Although Larry and Sergey set out to create
the ultimate search engine which, according
to Larry, “would understand exactly what you
wanted, and it would give you the right thing”,
they have also branched into other products,
some related to the search engine, but others are
what Google calls “emerging businesses.” In this
brief period of time they have also revolutionised
advertising while creating a company that has a
current market capitalisation in excess of US$
185 billion. According to Forbes, in 2010 Larry
and Sergey were two of the wealthiest men on
Earth, each with a net worth of US$17.5 billion.
Like other young, uber-successful
entrepreneurs of the digital age, Sergey
and Larry are exceedingly bright, brash and
confident, but they lacked any relevant work
experience prior to starting their own company.
However, it was a nearly seamless transition
from academia to the formation of an enduring
corporate megalith. There were no corporate
failures to learn from and no executives to
teach them the ropes and nurture their business
practices and skills. So, how did Larry Page
and Sergey Brin make Google the institution it
is today? Here are some tips from creators of
Google:
1. Build On What You Know
The most successful entrepreneurs and titans
of industry build their enterprises on a solid
foundation of experience and knowledge in
their respective fields. They normally have other
attributes – such as passion, determination,
work-ethic and vision – but the groundwork
begins earlier as they forge their skills and
knowledge through work and practical
experience. Henry Ford was an excellent
mechanic with extensive knowledge of wagons,
horseless carriages and engines before he
embarked on his own company. Milton Hershey
worked as a confectioner and had three failed
companies before he established Hershey
Chocolate. Although for Segey and Larry, it was
a little different.
The internet was a relatively new technology
when they formed Google. Entrepreneurs
involved in a nascent field like the internet had
little opportunity for practical work experience;
they had to build from scratch, rely on their own
resources and go with their instincts. Instead
of corporate or business experience, Larry
and Sergey focused on what they knew best –
computer science. They had been passionate
about computers and mathematics from an
early age and by the time they were in graduate
school studying computer science, they were
quickly becoming experts in their field.
Google’s search engine was born at Stanford
University when Larry embarked on a project to
collect links on the web in order to study how
pages were linked to one another. “I figured I
could get a dissertation and do something fun
and perhaps practical at the same time, which
is really what motivates me”, he said. First, he
searched for links to the Stanford home page,
where he discovered 10,000 people linked to
Stanford. Then the question arose: which links
to show and how to rank them? The search
engines of the time did not understand ranking
– which pages are more important – and simply
produced random results for a particular search
topic. At the same time, Sergey was studying
data mining – the process of analyzing large
amounts of data and seeking out patterns and
trends. Larry and Sergey joined forces and it
was their combined knowledge and vision that
made the Google vision become a reality.
2. Focus On Developing One Core Product
Today, Google has an extensive line of products
and services and a rainbow of enterprises and
applications, but the underlying premise for
the formation of Google, and what made it
initially successful, is its search engine. While
at Stanford, Larry and Sergey collaborated on
a paper entitled ‘The Anatomy of a Large-Scale
Hypertextual Web Search Engine’. The research
morphed into BackRub and subsequently
PageRank, two newer iterations of the search
engine. They saw this as an open-source,
non-commercial project – a search engine that
would be available for public use. They were
adamantly opposed to ad-supported services.
Sergey believed, “Advertising-funded search
engines would be inherently biased towards
the advertisers and away from the needs of the
consumers.” The search engine remained their
sole focus.
From inception, Sergey and Larry put all
their meager resources into developing this one
product. Initially they worked out of their dorms
and small university offices, buying computer
equipment on their credit cards and converting the
computers into servers. Following the formation
of Google Inc. in 1998, and the influx of capital
from several angel investors, Larry and Sergey
continued to devote all their energy to improving
their core product – the search engine.
3. Set High Goals And Pursue Them Boldly
Sergey and Larry have consistently reached
beyond their grasp and when the goals proved
within reach, moved the milestone further away.
They were not looking for a great search engine:
they sought, and are still seeking, the “perfect
search engine”, one Larry defined as something
“that understands exactly what you mean and
gives you back exactly what you want.”
Setting potentially unattainable goals is not
limited to the product itself. Needing capital to
fund their growth, Sergey and Larry approached
two prominent venture-capital firms in Silicon
Valley: Kleiner Perkins Caufield & Byers (KPCB)
Cover story
and Sequoia Capital. Getting these major
venture capital firms to consider their request
for US$25 million was a brazen move that
typified the extraordinary confidence Larry and
Sergey had in their company, but it was even
bolder because they were only willing to give
up 20% of Google, establishing a valuation of
US$125 million for a one-year-old company
without revenue. Moreover, to avoid giving
any one party too much power on the Google
board, they demanded that KPCB and Sequoia
split the deal, something firms rarely do. But
Larry and Sergey were adamant. The two firms
ultimately acceded to their demands. Call it
boldness, but the potentially unattainable goal
was achieved.
4. Innovate, Innovate, Innovate
Innovation is frequently associated with product
and design but it also applies to other areas
of corporate entrepreneurship, including the
creation of unique revenue sources. Insisting
on maintaining an open-source search engine,
Sergey and Larry had to create a different
mechanism for income generation. In late 1999
and early 2000, Google began testing a program
to sell ad space on a Cost Per Mille basis, in
which the advertiser pays for exposure of an ad
to a specific audience, the dominant ad model
of the time. “It didn’t generate much money”,
Sergey acknowledged. Declining to use banner
ads, Google opted for their own model for
selling text ads. AdWords, launched in October
of 2000, allowed advertisers to create simple
ads that would appear next to the subject being
searched and the advertisers would only pay
when someone actually searched the page
where the ad appeared.
Three years later, Google enhanced its
advertising service by instituting a content-
targeted advertising program called AdSense,
designed to identify the meaning of a web page
and then automatically provide relevant ads.
From the public’s perspective, this provided
users with highly relevant ads, more specifically
related to a specific web page’s content.
Google’s press release called it an “innovative
advertising technology.” Users found relevant
advertising and advertisers received a five-
fold increase in average click-through rates
compared to traditional banner ads. Instead of
taking the traditional route and selling access to
their search engine, Sergey and Larry found a
unique and innovative way to generate revenue.
5. Grasp The Full Picture
Although the initial focus should be on the
development of the core product, successful
entrepreneurs like Larry and Sergey are
constantly viewing and analysing the larger
picture to stay ahead of the curve and determine
what products and services can be built around
the core, either through internal development
or acquisitions. However, this does not shift
the focus away from the company’s primary
product. Google continuously upgrades
its search engine to keep up with
the growing mountain of data
and number of surfers on the
internet, but Sergey and Larry
are casting a much wider
net.
While many of the products Google has
introduced in the past decade are related to
its search engine, they are also powerful in
their own right. These include Gmail, Google
Maps and GPS, Google Earth, Google News,
Google Books and Google+, the newest social
networking site.
Google has also ventured into “emerging”
businesses. Android, the internal operating
system for cell phones, has become the biggest
smartphone platform by worldwide shipments
in the second quarter of 2011, with a 48%
market share. And YouTube, the leading online
video program is so popular that it now takes up
22% of all mobile bandwidth usage with more
than two billion video views a week. YouTube
contributes more than a billion dollars in annual
revenue to Google. Nevertheless, Google’s
search engine remains one of the globe’s most
useful and utilitarian services.
6. Confidence Is Key
Inventor Charles Kettering once said that
people are often taken with new ideas so long
as they are just like the old ones. Innovators
are often met by skeptics who cannot see the
potential for a new technology. It is important
to discriminate between healthy criticism and
those who are negative to new ideas they do not
understand. To be successful, entrepreneurs
must have absolute faith and confidence in their
product and goals. Being told something cannot
be done does not mean it cannot be done.
Take it as a challenge, not a reason to quit or
change direction.
While at Stanford, Sergey and Larry
developed BackRub, the first version of their
search engine. At first they shopped BackRub
to potential suitors, including Excite, AltaVista
and Infoseek, but were met with indifference.
“We spent a lot of time talking to people . . .
trying to convince them our technology would
give them an edge”, Larry said. “But no one
really engaged with us. The crunch came when
the CEO of a major search company said that
search did not matter to him that much . . . That
astonished me.” Undaunted, Larry and Sergey
had sufficient confidence in their vision to forge
ahead and establish Google.
Cover story
028 AUSTRALIAN Business Solutions
7. Always Look Long Term
Most entrepreneurs and corporate executives
tend to focus on short-term results. Although
Google was incorporated in 1998, and PC
Magazine placed its search engine into its ‘Top
100 Web Sites’ for that year, Larry and Sergey
were still indifferent about generating revenue.
Their goal was to create the ultimate search
engine and to make it egalitarian and open-to-
all, one that would allow people to search the
internet without charge.
Generating revenue almost seemed like
an afterthought. Subsequently, Larry told
potential investors in Google’s initial public
offering, “We will not shy away from high-risk,
high-reward projects because of short-term
earnings pressure. Some of our bets have
gone extraordinarily well, and others have not.”
Moreover, “We will have the fortitude to do this.”
To be successful, entrepreneurs must have absolute faith and confidence in their product and goals. Being
told something cannot be done does not mean it cannot be done. Take it as a challenge, not a reason to
quit or change direction.
Cover story
030 AUSTRALIAN Business Solutions
8. Take Care of Your Employees
And They Will Take Care of You
Many companies take a carrot-and-stick
approach toward their employees, rewarding
them for exceptional deeds while creating a tense
work environment with extensive and, at times,
onerous rules and conditions. They expect –
and sometimes even demand – that employees
devote their time and energy to the company.
Google opted to take a different, subtler approach
toward enhanced employee productivity by
creating a friendly and nurturing environment.
Googleplex, the huge campus-like corporate
headquarters with offices in Mountain View,
California, offers employees an extensive array
of perks: a gym staffed with trainers; lap pools;
sand volleyball courts; video and other game and
entertainment rooms; first-rate dining from a host
of restaurants; and much more. Although these
perks were part of the corporate culture that Larry
and Sergey sought to develop, they also served
another economic interest: employees were
actually more productive – employees eating at
Googleplex, or working out at the campus gym,
were back at their computers more quickly than
if they had dined out or used outside facilities.
Employees could elect to come to work on limo
busses decked with work-stations, wi-fi and food.
In this environment, Google’s employees work
hard and are very productive.
In the scheme of things, Google is only just
getting started and we are yet to see its full
potential and power. Its core and founding
Google is the ‘go-to’ search engine on the internet, however, the principles that surround its rise to the top can
be applied every product and service, allowing them to also claim the much sougt-after status of a market leader.
Cover story
product, that is so heavily relied on today,
stemmed from an initial idea that was cleverly and
passionatly harnessed to create a vital tool that is
used by millions of people everyday for a range of
proffesional and personal reasons. Google is the
‘go-to’ search engine on the internet, however,
the principles that surround its rise to the top can
be applied every product and service, allowing
them to also claim the much sougt-after status of
a market leader.
Daniel Alef is an award-winning novelist, former
syndicated columnist, and author of more than
200 biographical profiles. Daniel is a former lawyer
and CEO and his wide range of biographical
profiles are available at Amazon, Apple’s
iBookstore, Barnes & Noble, Kobo and Sony.