"Google is a technology-driven company -- one founded by computer science prodigies who have hired more than 50 computer science Ph.D.'s."
In 2002 this was weird.
Internet entrepreneurs were not expected to be compsci Ph.Ds back then.
AVC discussed a new kind of tech CEO recently:
"The new tech CEO archetype is a computer scientist who got into product management early in their career, led large product teams at a big important tech company, is in their 40s, and has great taste in technology, tech talent, and most of all tech products."
Google was one of the first internet businesses to succeed big with computer scientists at the top, leading product.
EDIT, again:
Google is quite a different beast from Sun, SGI, or Viacom. You might disagree but that's OK. Somebody is always wrong on the Internet.
2002 was shortly after the dotcom bubble. Nobody knew what was going on or going to happen. The rise of computer scientist lead consumer-facing tech companies would have surprised people who had expected Pets.com to rule the world.
As the NYT article noted, Google was swimming against the tide at the time. History has proved them right.
Of the 6 founders of Excite, 5 were Stanford computer science graduates.
Jerry Yang and David Filo, founders of Yahoo, were electrical engineering graduates (thus very tech oriented).
Alta Vista was started by some electrical engineers and computer scientists from DEC.
Inktomi was started by Eric Brewer who was an electrical engineering and computer science professor.
I'm sure there are more.
EDIT:
As the NYT article noted, Google was swimming against the tide at the time. History has proved them right.
It should be mentioned that Sergey and Larry recruited Eric Schmidt as CEO in 2001. Eric is a hugely capable computer scientist, but he also had a proven record as CEO at Novell. In essence they brought in a 'business guy' who they trusted with the technical aspects of Google.
That does blow a hole in my argument... but what lead NYT to observe that Google was 'flouting dotcom tradition', if stocking up with (and being lead by) CS PhD's was the norm?
Many tech companies were lead by non-tech guys, but most were so flash-in-the-pan you don't even remember them. My father consulted for several would-be tech companies during that time, all led by business types, that didn't last.
Stanford has been awarding EE Ph.D.s since 1919, and Stanford's prestige as an engineering institution didn't really begin until after Terman became Dean in the 1940s and began pulling in substantial government research grants.
I still agree with cfield here. There were, say 1% of the population with master degrees, and 0.2% with a Ph.D.
50 years later, there are maybe 5% of the population with master degrees, and 1% with a Ph.D.
Numbers are invented, but something like that could prove that H&P's degrees were comparable to today's Ph.Ds.
Google was really part of the second wave of successful internet businesses, including search. Yahoo was going public as Google was getting started. Inktomi was worth over 20B at some point, in fact I was there when the company had an opportunity to acquire Google and said no.
Interestingly enough, Jeff Bezos of Amazon has a computer science degree from Princeton. He's such a fierce competitor and tough negotiator that somehow his geek credentials were completely overlooked by the business press.
There weren't very many PhD programs for Computer Science in 1968. A quick Google search reveals the first US Computer Science Phd was awarded in 1965.
Most of the comments here assume that this is a story that eventually had a happy ending, but I'm not 100% sure that's true.
Google eventually did find its business model in AdWords, of course, which moved the company from the fringes of the online advertising market to its heart. But the logic of advertising as a business model eventually led them to have to reject a lot of the things that early Google held sacred.
Back in Ye Olden Days, for instance, that if you looked at Google's "Ten Things We Know To Be True" manifesto (http://www.google.com/about/company/philosophy/), you would find a flat statement that one thing Google would never do was provide content like stock quotes and weather reports. Why? Because being the place people went for stock quotes and weather reports was how Yahoo did things, and early Google went out of its way to let you know that it was not going to be Yahoo. Yahoo was a big, messy, unfocused portal; Google was laser-focused on one thing and one thing only, search.
But then came advertising, and suddenly the logic that had led Yahoo into all those niches led Google right into them too. The advertiser's dream, of course, is to be in every last place where people turn their eyeballs; and things like stock quotes and weather reports aren't sexy computer science problems, but they are looked at. So Google quietly dropped that language from the "Ten Things" document and started Yahoo-ing themselves up.
Fast forward a decade-plus, and like kudzu, Google has slowly expanded into a million niches nobody back then could have foreseen. It's in my maps and my phone and my TV and my car; it's everywhere.
In other words, Google found success by becoming the thing they originally positioned themselves as never wanting to be. Which turned out to be a pretty good business model! But it's also one of the hardest pivots in the history of pivoting.
A key difference is how the two companies approached their nichification. Yahoo took a kitchen-sink approach——trying to cram every category link into its homepage, in the process transforming itself into a cluttered mess, and ultimately defeating its core purpose as a search engine: to make things easy to find.
Google, on the other hand, kept its homepage relatively clean and simple. It held to the belief that the search query should be the point of entry in any session, and that nothing should stand between the user and her query.
Basically, Google never tried to become a portal. The SERPs may have changed dramatically over the years, but the starting point is (more or less) the same.
"It's in my maps and my phone and my TV and my car; it's everywhere."
That's because various devices are supplanting the web browser as points of entry into the internet under specific circumstances. Google's integration into those apps and devices is its attempt to maintain its position as the internet's de facto user interface. (It's also a good way to collect and organize information from the ever-growing, ever-diverging set of sources generating information.) Whichever way the internet goes, Google needs to go with it.
I think what's most telling about this article is how little people outside of tech understood about the internet. I guess the dot com crash helped with the FUD, but the takeaway for me is that usually news orgs are behind when trying to understand where tech is going, and their insight can be stunted because of this.
That's interesting, because I actually found the article pretty impressive considering the timing. It's easy to look back 13 years later and laugh at the title, but some of the finer points were pretty insightful. Many parts of the article are very foretelling, even if they weren't the personal opinion of the author.
For example, pointing out that using text ads over graphical ones improved the speed and was an important aspect for users is noteworthy, as well as Brin and Page's insistence that focusing on the technology would bring users and, in turn, ad revenue is as well. This article was written just a couple of years after a major crash of tech stocks that had absolutely no way to make a buck, so some skepticism was in order, I believe. In fact the vast majority of .com's were not profitable so it's not as if a company that at the time was trailing Yahoo! and Overture and barely profitable was inevitably going to become the Google we know today.
It's mostly the tone of articles - a sense that this internet thing isn't quite there yet and there are consumer expectations that internet simply can't account for (which in the case of the article cited, we know is false because of things like pinterest etc).
The stuff I'm thinking about now is when articles talk about Snapchat, memes, gifs etc, the angle is coming from a very dismissive place.
What's amazing about Google is how problematic the quest for new business models is for them in spite of their advantages, and they are almost cursed by their success in one domain polluting the others.
But their really large problem is they're too smart and strategic for their own good. If you look at the ecosystems they construct the only long term winner in them is Google, and other companies are now highly aware of this.
>> only long term winner in them is Google, and other companies are now highly aware of this.
Actually Samsung did very well on android, probably much better than if Google hasn't shared android with them.
Ass for small companies working on their ecosystems(app authors, youtube creators, site owners),those are decent ecosystems, and generally Google is not worse than any other large ecosystem owner.
Samsung clearly do not share that opinion, and justifiably so.
For other partners, for example Chromebook makers or YouTube, Google is worse than others for the simple reason they work to make everyone else they're working with interchangeable with someone else they're working with, resulting in near perfect competition with them as the gatekeepers. Today's YouTube stars have brands, but they are second in the customer relationship position behind YouTube. The likes of Apple certainly do get themselves in the mix here, but Apple prefer to use their leverage to compete against another ecosystem as opposed to setting their own off against each other.
One of the biggest changes in the tech industry in the last ten years is the wider appreciation of the need to own your own customer relationship, and to prevent others from grabbing yours.
>> Samsung clearly do not share that opinion, and justifiably so.
And Samsung would be wrong.If Google hasn't decide to add Samsung to android, it's very likely that Samsung would be in somewhat similar fate to that of microsoft. But Google did share it with them , and they did make lots of money, and probably still do.
Sure they would want more, and more control, etc. And android is a tough business. But still Open Android was a great thing for Samsung.
As for Apple behaving better towards their partners - it's hard to tell , because they target a different customer segment than android so the dynamic is different.
But if you look at every big company - MS, Amazon, Wireless carriers - commoditizing a complement is a very common technique.
they had soemthing that attracted a lot of eyeballs, but nobody wanted to pay for.
using ads as a substitue for micro-transaction was a brilliant idea, made google possible.
and ever since then, no other venture/product coming out of google has reached even a fraction of that revenue. you could argue that the alphabet split is not honest enough. core google should have been the ad engine, that's it. the one real, tough business they're operating. the rest seems like a PhD playground with not a lot of accountability.
whoever at google really had the idea for ads is the true genius behind their success.
>> and ever since then, no other venture/product coming out of google has reached even a fraction of that revenue.
That's not true. They started with search ads, expanded successfully to various types of display ads, and now their video business(youtube) and the android app store making 15% of Google's revenues.
>> the rest seems like a PhD playground with not a lot of accountability
Maybe public(i.e wall street) accountability isn't the correct model for long term r&d.But technology wise, they do seem to get lots of work done, often in areas with few/no strong competitors, on problems that will be worth lots of and with time that could mean lots of revenue.And i don't know of a better way to judge the commercial value of long term r&d.
The flaw/problem with splitting the "ad engine" is that it won't survive on its own.
By ad engine, I'll assume you mean AdWords and Adsense combined. I'll call them Google Ads.
Businesses that rely on ads to survive (Maps, Docs, Android), and those that generate ad income (Search, YouTube) would be bogged down by admin and legal issues if they were unbundled.
Imagine Google Ads having to pay YouTube X per month for ads. Does YT get the same rate as everyone? What if some external advertiser comes in and offers YT lower rates? What stops YT from taking that offer? ABC can force transfer pricing between the two, but it's easier to make it notional instead of money flowing through separate companies.
Similar, Google makes money from Android through Play Store. Where does Play store live? In Android Inc? What about books, magazines, music? If Android gets ownership of them, why should they bother making apps for web and other platforms?
In a business where you have a lot of inter-dependencies between units, it's often better to keep those units together.
Ads subsidize the existential 'can we try to solve this before we die' projects that Larry and Sergey consume themselves with.
Those projects were starting to weigh down Google's bottom line. Alphabet was a reaction to this in that - 'ok brainiacs at these side projects; you have a limited window to become remotely self sufficient; this won't go on subsidized forever'.
But again, most of Google's other web products are subsidized by ads. Google is _trying_ to become a pay-first product company, but they really have a disdain for support - they hate support. It's going to be interesting to see Google try and become a product company if the ad spigot starts to slow.
In 2002 this was weird.
Internet entrepreneurs were not expected to be compsci Ph.Ds back then.
AVC discussed a new kind of tech CEO recently:
"The new tech CEO archetype is a computer scientist who got into product management early in their career, led large product teams at a big important tech company, is in their 40s, and has great taste in technology, tech talent, and most of all tech products."
Google was one of the first internet businesses to succeed big with computer scientists at the top, leading product.
EDIT, again:
Google is quite a different beast from Sun, SGI, or Viacom. You might disagree but that's OK. Somebody is always wrong on the Internet.
2002 was shortly after the dotcom bubble. Nobody knew what was going on or going to happen. The rise of computer scientist lead consumer-facing tech companies would have surprised people who had expected Pets.com to rule the world.
As the NYT article noted, Google was swimming against the tide at the time. History has proved them right.