Google

Google Inc.
Company type	Public (Nasdaq: GOOG)
Industry	Internet
Founded	Mountain View, California (1998)
Founder	Larry Page; Sergey Brin
Headquarters	Mountain View, California, USA
Key people	Eric E. Schmidt, CEO/Director; Sergey Brin, Technology President; Larry E. Page, Products President
Products	See list of Google services and tools
Revenue	$6.140 billion USD (2005)
Number of employees	5,680 (December 31, 2005)
Website	www.google.com

Google Inc. (Nasdaq: GOOG) is a U.S. public corporation, first incorporated as a privately held corporation in September, 1998, that designs and manages the Internet Google search engine. The company employs approximately 5,700 employees and is based in Mountain View, California. Eric Schmidt, formerly chief executive officer of Novell, was named Google's CEO when co-founder Larry Page stepped down.

The name "Google" is a play on the word "googol," which refers to the number represented by 1 followed by one hundred zeros. As a further play on this, Google's headquarters, located in California, are referred to as "the Googleplex" — a googolplex being 1 followed by a googol of zeros, and the HQ being a complex of buildings (cf. multiplex, cineplex, etc).

Google's services are run on several server farms, each consisting of many thousand low-cost commodity computers running stripped-down versions of Linux. While the company does not provide detailed information about its hardware, it was estimated in 2005 that they were using over 100,000 Linux machines. See Google platform for more details on their technology.

History

File:Google Startpage.JPG

Google.com front page (using Mozilla Firefox with Windows XP).

Main article: History of Google

Beginning

Google began as a research project in January, 1996 by Larry Page and Sergey Brin, two Ph.D. students at Stanford.^[1] They hypothesized that a search engine that analyzed the relationships between websites would produce better results than existing techniques (existing search engines at the time essentially ranked results according to how many times the search term appeared on a page).^[2] It was originally nicknamed, "BackRub," because the system checked backlinks to estimate a site's importance.^[3] A small search engine called RankDex was already exploring a similar strategy.^[4]

Convinced that the pages with the most links to them from other highly relevant web pages must be the most relevant pages associated with the search, Page and Brin tested their thesis as part of their studies, and laid the foundation for their search engine. Originally the search engine used the Stanford University website with the domain google.stanford.edu. The domain google.com was registered on September 15, 1997, and the company was incorporated as Google Inc. on September 7, 1998 at a friend's garage in Menlo Park, California.

In March, 1999, the company moved into offices at 165 University Avenue in Palo Alto, home to several other noted Silicon Valley technology startups. After quickly outgrowing two other sites, the company settled into their current home in a complex of buildings in Mountain View at 1600 Amphitheater Parkway, in 2003. Silicon Graphics leased these buildings to Google.

The Google search engine attracted a loyal following among the growing number of Internet users. They were attracted to its simple, uncluttered, clean design — a competitive advantage to attract users who did not wish to enter searches on web pages filled with visual distractions. This appearance, while imitating the early AltaVista, had behind it Google's unique search capabilities. In 2000 Google began selling advertisements associated with the search keyword to produce enhanced search results for the user. This strategy was important for increasing advertising revenue, which is based upon the number of hits users make upon ads. The ads were text-based in order to maintain an uncluttered page design and to maximize page loading speed. It also only cost a very small amount per click to the websites that advertised this way. This model of selling keyword advertising was originally pioneered by Goto.com (later renamed Overture, then Yahoo! Search Marketing).^[5] While many of its dot-com rivals failed in the new Internet marketplace, Google quietly rose in stature while generating revenue.

U.S. patent 6,285,999 describing Google's ranking mechanism (PageRank) was granted on September 4 2001. The patent was officially assigned to Stanford University and lists Lawrence Page as the inventor.

Financing and initial public offering

The first funding for Google as a company was secured in the form of a $100,000 contribution from Andy Bechtolsheim, co-founder of Sun Microsystems, given to a corporation which did not yet exist. After a frantic few weeks, this was topped up to give an initial investment of almost one million dollars. Around six months later, a much larger round of funding was announced, with the major investors being rival venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital.

In October, 2003, while discussing a possible IPO (Initial Public Offering of shares), Microsoft approached the company about a possible partnership or merger. However, no such deal ever materialized. In January, 2004, Google announced the hiring of Morgan Stanley and Goldman Sachs Group to arrange an IPO. The IPO was projected to raise as much as $4 billion. After some initial stumbles, Google's IPO took place on August 19, 2004. 19,605,052 shares were offered at a price of $85 per share. Of that, 14,142,135 were floated by Google and 5,462,917 by selling stockholders. The sale raised $1.67 billion, of which approximately $1.2 billion went to Google. The vast majority of Google's 271 million shares remained under Google's control. The IPO gave Google a market capitalization of more than $23 billion. Many of Google's employees became instant paper millionaires. Yahoo!, a competitor of Google, also benefited from the IPO because it owns 2.7 million shares of Google. The company was listed on the NASDAQ stock exchange under the ticker symbol GOOG.

Growth

With Google's increased size comes more competition from large mainstream technology companies. One such example is the rivalry between Microsoft and Google.^[6] Microsoft has been touting its MSN Search engine to counter Google's competitive position. Furthermore, the two companies are increasingly offering overlapping services, such as webmail (Gmail vs. Hotmail), search (both online and local desktop searching), and other applications (for example, Microsoft's Windows Live Local competes with Google Earth).

Click fraud has also become a growing problem for Google's business strategy. Google's CFO George Reyes said in a December 2004 investor conference that "something has to be done about this really, really quickly, because I think, potentially, it threatens our business model."^[7] Some have suggested that Google is not doing enough to combat click fraud. Jessie Stricchiola, president of Alchemist Media, called Google, "the most stubborn and the least willing to cooperate with advertisers," when it comes to click fraud.

While the company's primary market is in the web content arena, Google has also recently began to experiment with other markets, such as radio and print publications. On January 17, 2006, Google announced that it had purchased the radio advertising company dMarc, which provides an automated system that allows companies to advertise on the radio.^[8] This will allow Google to combine two niche advertising media -- the Internet and radio -- with Google's ability to laser-focus on the tastes of consumers. Google has also begun an experiment in selling advertisements from its advertisers in offline newspapers and magazines, with select advertisements in the Chicago Sun-Times.^[9] They have been filling unsold space in the newspaper that would have normally been used for in-house advertisements.

Salaries

Originally, typical salaries at Google were considered to be quite low by industry standards. For example, some system administrators earned no more than $33,000 — while $40,000 at that time was considered to be low for the Bay Area job market. Nevertheless, Google's excellent stock performance following the IPO has enabled these early employees to be competitively compensated by participation in the corporation's remarkable equity growth. In 2005, Google has implemented other employee incentives such as the Google Founders' Award, in addition to offering higher salaries to new employees. Google's workplace amenities, culture, global popularity, and strong brand recognition have also attracted potential applicants.

After the company's IPO in August 2004, it was reported that Founders Sergey Brin and Larry Page, as well as CEO Eric Schmidt, have accepted a base salary of $1.00. They have all declined recent offers of bonuses and increases in compensation by Google's board of directors. In a 2006 report of the world's richest people, Forbes reported that Sergey Brin was #26 with a net worth of $12.9 Billion, and Larry Page was #27 with a net worth of $12.8 Billion.^[10]

Google and privacy issues

As the world's biggest search and ad-broker company, Google has drawn its share of criticism and concern about the privacy of its users. Its privacy policy was revised on October 14 2005. Additionally, privacy info about various Google services was made also available.

Corporate culture

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A license plate seen in the Googleplex parking lot

Google is particularly known for its relaxed corporate culture, reminiscent of the Dot-com boom. Google's corporate philosophy is based on many casual principles including, "You can make money without doing evil", "You can be serious without a suit" and, "Work should be challenging and the challenge should be fun." A complete list of corporate fundamentals is available on Google's website.^[11] The company encourages equality within corporate levels. Twice a week there is a roller hockey game in the company parking lot. Google's relaxed corporate culture can also be seen externally through their holiday variations of the Google logo.

"Twenty percent" time

Every Google engineer is encouraged to spend 20 percent (20%) of their work time on projects that interest them. The time can be allocated to one day a week, or pooled into a month. Some of Google's newer services, such as Gmail, Google News and Orkut, are said to originate from these independent endeavors.

Googleplex

Google's headquarters is called the Googleplex. The lobby is decorated with a piano, lava lamps, and a real-time projection of current search queries. The hallways are full of exercise balls and bicycles. Each employee has access to the corporate recreation center. Recreational amenities are scattered throughout the campus, and include a workout room with weights and rowing machines, locker rooms, washers and dryers, a massage room, assorted video games, Foosball, a baby grand piano, a pool table, and ping pong. In addition to the rec room, there are snack rooms stocked with various cereals, gummy bears, toffee, licorice, cashews, yogurt, carrots, fresh fruit, and dozens of different drinks including fresh juice, soda, and make your own cappuccino.

April Fool's Day jokes

Main article: Google's hoaxes

Google has a tradition of creating April Fool's Day jokes such as Google MentalPlex, which featured the use of mental power to search the web. In 2002, they claimed that pigeons were the secret behind their growing search engine. In 2004, it featured Google Lunar, which featured jobs on the moon and in 2005, a fictitious brain-boosting drink termed, Google Gulp was announced. One can find other pranks hidden between Google's pages. Additionally, in the languages list one can find the Bork! Bork! Bork! version, imitating the Muppet Show's Swedish Chef. They also offer versions in Pig Latin, Elmer Fudd, and Klingon. Some people thought the announcement of Gmail in 2004 around April Fools Day (as well as the doubling of Gmail's storage space to two gigabytes in 2005) was a joke. In 2005, featured on the gmail homepage, was a comedic graph depicting googles goal of "infiniti plus one" Gb of storage.

IPO and culture

Many people speculated that Google's IPO would inevitably lead to changes in the company's culture,^[12] because of shareholder pressure for employee benefit reductions and short-term advances, or because a large number of the company's employees would suddenly become millionaires on paper. In a report given to potential investors, co-founders Sergey Brin and Larry Page promised that the IPO would not change the company's culture.^[13] Later Mr. Page said, "We think a lot about how to maintain our culture and the fun elements."

As Google grows, many analysts are finding that the company is becoming more "corporate". In 2005, articles in The New York Times and other sources began suggesting that Google had lost its anti-corporate, no evil philosophy.^[14]^[15]

Google partnerships

On September 28, 2005, Google announced a long-term research partnership with NASA which would involve Google building a 1-million square foot R&D center at NASA's Ames Research Center. NASA and Google are planning to work together on a variety of areas, including large-scale data management, massively distributed computing, bio-info-nano convergence, and encouragement of the entrepreneurial space industry. The new building would also include labs, offices, and housing for Google engineers.^[16]

Time Warner's AOL unit and Google unveiled an expanded partnership on December 21, 2005, including an enhanced global advertising partnership and a $1 Billion investment by Google for a 5% stake in AOL.^[17] As part of the collaboration, Google plans to work with AOL on video search and offer AOL's premium-video service within Google Video. This will allow users of Google Video to search for AOL's premium-video services. Display advertising throughout the Google network will also increase.

Additionally, Google has also recently formed a partnership with Sun Microsystems to help share and distribute each other's technologies. As part of the partnership Google will hire employees to help the open source office program OpenOffice.org.^[18]

Google also is involved in collaborative development efforts with the Mozilla Foundation, based on a recent job posting.^[19] Google is looking for software engineers to join them in collaborative development on the Firefox browser. They also offer a download of Firefox with the Google Toolbar pre-installed.