The google story

In 1997, while still considering Google.com a part of their doctoral thesis, Larry Page and Sergey Brin made the search engine accessible to those at Stanford University, quickly gaining popularity through word-of-mouth. The simplicity of Google's homepage, designed out of necessity due to budget constraints, was praised for its minimalism, contrasting sharply with the cluttered and ad-heavy designs of other search engines at the time. This approach was seen as revolutionary by Stanford professor Dennis Allison, who admired its departure from conventional design expectations.

To support the growing demand for Google's services, Page and Brin began to enhance their server capacity by assembling their own computers and utilizing unused ones found around Stanford, which also contributed $10,000 towards their efforts. Despite the project's commercial potential, the duo initially hesitated to fully commit to Google, even after unsuccessful attempts to sell their technology to major search engines and advice from Yahoo co-founder David Filo to start their own business. Their continuous improvements to Google, including the introduction of search result summaries, eventually led them to seek external funding to expand beyond the university. A meeting with Andy Bechtolsheim, a prominent entrepreneur, resulted in an immediate $100,000 investment, despite Google Inc. not yet being formally established. This initial investment, followed by further financial backing, underscored the potential investors saw in Google, driven not by profit but by the vision of organizing the world's information.

In 1998, Larry Page and Sergey Brin, two Stanford University Ph.D. students, founded Google Inc. after moving their operations into a garage, attracted by its hot tub. They began with a modest setup, paying $1,700 monthly for the space, and quickly expanded due to the rapid increase in their search engine's usage. Initially uncertain about how to monetize their search engine, they focused on attracting talented individuals with the promise of impacting millions through their technology. Google's visibility soared after being featured in PC Magazine's Top 100 Web Sites of 1998, leading to a significant increase in daily searches and necessitating more computing power. To support their growth, Google secured $25 million from venture capital firms Kleiner Perkins and Sequoia Capital, under the condition that they would later hire an experienced executive to guide their business strategy.

Despite initial profitability, Google's venture capitalists insisted that co-founders Sergey Brin and Larry Page hire an experienced manager. Valuing their independence, they resisted until Sequoia Capital threatened to pull their $12.5 million investment. This led them to consider Eric Schmidt, then CEO of Novell and former CTO of Sun Microsystems. Their first meeting was a heated debate about Novell's strategy, but Brin and Page were impressed by Schmidt's passion and credentials as a computer scientist with a Ph.D. from UC Berkeley. After negotiations, they appointed Schmidt as Google's chairman, transitioning to CEO after his tenure at Novell. Schmidt's commitment included purchasing $1 million in Google stock, and he officially became CEO in July 2001.

Sergey Brin and Larry Page, the founders of Google, implemented a policy that encourages software engineers to dedicate 20% of their work time to projects of personal interest, believing it would foster innovation and signal Google as a hub for creative minds. This approach was inspired by their upbringing in academic households where their fathers balanced teaching with a day dedicated to personal research. Krishna Bharat, a Google engineer, explained that this freedom allows for bottom-up innovation and taps into the passion and self-direction of employees, leading to greater productivity.

Google's policy on the use of this time is flexible; engineers can accumulate their 20% time and use it in a concentrated period to pursue their projects. This flexibility has led to the development of significant products like Google News, created by Bharat himself. He used his 20% time to devise a system that clusters news stories, updates them in real-time, and ranks them based on coverage, with personalization options for users. Similarly, Froogle, now known as Google Shopping, began as a 20% project and evolved into a full-fledged service after gaining traction within Google.

Larry Page and Sergey Brin delayed Google's public offering to avoid revealing its profitability to competitors like Microsoft and Yahoo. However, reaching a certain threshold of assets and shareholders meant they had to disclose financial results publicly, prompting them to consider an IPO. Unlike typical Silicon Valley entrepreneurs who dream of IPOs for financial gain, Brin and Page valued their privacy and independence. They decided to go public on their terms, without needing to raise funds through stock sales due to Google's strong financial position.

Traditionally, IPOs are managed by investment banks, but Google chose an unconventional route by allowing potential investors to bid online, ensuring a fair allocation of shares without favoritism. This method attracted many first-time investors and avoided traditional roadshows, relying instead on openly shared IPO information on Google's website. Despite challenges, including SEC inquiries and lawsuits from companies like Playboy and Yahoo, Google's IPO proceeded with the support of venture capitalists John Doerr and Michael Moritz, who helped navigate these obstacles.

After their public offering, Google's co-founders Larry Page and Sergey Brin, along with CEO Eric Schmidt, dove back into their work with renewed focus. Larry, as President-Products, managed the day-to-day operations, while Sergey, as President-Technology, was in charge of fostering the corporate culture, securing deals, and steering long-term growth. Eric, free from these responsibilities, concentrated on scaling Google's financial systems as CEO. Their management style was marked by swift decision-making, often concluding matters in their weekly senior management meetings without a drawn-out approval process. This approach, combined with their technical expertise, was unique for a tech company and proved successful.

Larry and Sergey were instrumental in securing AOL Europe's business, outmaneuvering Yahoo. They also maintained a competitive edge against Microsoft, notably when they doubled Google's index to eight billion web pages just hours before Microsoft announced its five billion. Google's innovation streak post-IPO was remarkable, launching products like Google Desktop Search, satellite mapping, video search, mobile search capabilities, Google Suggest, Google Scholar, and Google Earth. They even ventured into digitizing over 15 million library books, aiming for 50 million in the next decade, sparking both excitement and concern over copyright issues.

When Google made its debut on the stock market in August 2004, its shares were initially priced at $100, valuing the company at $23.1 billion. Despite skepticism from analysts who anticipated a decline in share prices, especially considering the potential sale of insider shares six months post-IPO, Google's stock defied expectations and continued to climb. By October 2004, shares were trading at $135, reaching $200 by January 2005, and soared to $216 on February 1, 2005, following the announcement that quarterly sales had exceeded $1 billion with $200 million in profits. This surge in stock price pushed Google's market valuation beyond $50 billion, surpassing many esteemed blue-chip companies in America.

Google's reluctance to provide earnings guidance branded it as somewhat of an outlier in the financial world. Yet, the company's consistent performance forced many Wall Street analysts to revise their price targets upward, despite concerns over Google's reliance on internet advertising for revenue. By its first shareholder meeting in May 2005, Google's stock had surpassed $225, buoyed by quarterly sales of $1.3 billion and profits of $369 million. Celebrating its first year as a public entity, Google announced a whimsical $4 billion stock offering, issuing shares that numerically represented the first eight digits of pi.