Google at 10: Larry, Sergey & Me

It is not clear how old Google is – some argue that world’s largest search engine operator is 13 – after all it operated in stealth for about 3 years before launching in September 1998. Many major news organizations are going with September 2008 as the tenth anniversary so I am going to play along. even asked the question, Has Google Changed The World? from many well known people. For some odd reason they decided to seek my thoughts.

Gandhi changed the world. The steam engine changed the world. Heart transplants changed the world. The Internet changed the world. Google simply made a small (albeit important) contribution toward making Internet a better experience for all of us.

Google’s (s GOOG) contributions are still worthy of praise. It is no longer impossible to find relevant information on the fast-growing Internet. I remember tearing my hair out looking for relevant information. Today it is as simple as acting on our impulse to seek that knowledge–and that has infinitely changed the way we interact with the machines.

The article triggered a chain reaction and a trip down the memory lane. I had been a Google-addict for a while and loved its simple elegance over rivals such as AltaVista and Inktomi-powered searches. I had talked to the company earlier, but I didn’t meet the Stanford duo in person up until September 1999. The company had just raised about $25 million in venture money.

“I have never paid more money for so little a stake in a startup,” John Doerr of Kleiner Perkins Caufield & Byers was heard saying. Good thing he did – for he paid next to nothing for what could arguably be the Internet-equivalent of Alaskan oil and gas fields.

Larry Page & Sergey Brin had stopped by at the offices and we talked at length about the company. It ultimately resulted in this feature, How Google Is That? Larry still had the same disastrous haircut he supports today. Brin was measured and logical as always in his responses. They thankfully made no meaningless and “do-no-evil” hypocritical statements. They were just two guys out to change the world. I remember getting along with them famously, but never saw or talked to them since, though I have been to many Google press events.

Then & Now: You’ve come a long way baby

The company was 12-months old. They had just come up with their version of contextual-text advertisng system. They had 40 employees, were looking for an inhouse chef, and were doing about 4 million page views a day and about 4 million searches a day. That’s 45 searches per second. No one in the company owned a glider, though their venture backers had their own private planes. The company was housed in 165 University Avenue in Palo Alto and the co-founders were single.

In July 2008, Google registered 7.23 billion searches – about 242 million a day. That works out to about 4 10 million searches in an hour or over 1100 2772 searches per second. (Funny, it turned out to be much bigger than the market estimates used by Google.) It had sales of $5.4 billion in the second quarter of 2008 alone. It now employs over 19,000 people. Larry and Sergey are billionaires and own a Boeing 767 & a Boeing 757. They are both married. The company has offices in multiple locations and data centers that are sprinkled around the globe.

After meeting with them and discussing the merits of search-only approach versus portals, I came to this conclusion: “Perhaps the other Stanford duo, Yahoo! cofounders David Filo and Jerry Yang, should be a little concerned–their media ambitions have superseded their customers’ desire for a really smart search engine.” In hindsight, I am surprised I was able to get away with making that statement and my editor didn’t catch what clearly was an opinion – a no-no in the non-blog mediascape. After all, it seemed so stupid to suggest that because Yahoo (s YHOO) had 240 million page views a day and was literally printing money.

Brin tried to convince me that the text-based contextual advertising (first popularized by LinkExchange, a company that was bought by Microsoft) was their way of making money. “Banners are not working and clickthrough rates are falling, I think highly focused ads are the answer,” Brin said, and pointed out that Google would be in black in 24 months. By 2001, I could have kicked myself for doubting the kid!

Why did they win?

Fast forward 9 years, and most of Google’s competitors have gone to the great technology graveyard, nary a tombstone., Dogpile, Direct Hit and Northern Light were all part of the new search engines that were taking on the incumbents like Yahoo, Lycos and HotBot and wanted to make web searches simpler and more accurate.

“Google is essentially trying to categorize and catalog the web. We have a very different product and a different approach,” Jeffrey Stibel, cofounder and CEO of then Providence, R.I.-based told me for the story. He was taking a more exotic linguistic approach to search. It is now owned by Valueclick, an ad-network.

In comparison, Google’s analysis of the link structure of the World Wide Web and large-scale data mining and ability to ranks a page against similar pages turned out to be the right approach. Was it just the algorithm and a better monetization scheme? Was it a right solution at the right time? I think it was a bit of all that – but most importantly, it was a farsighted approach to infrastructure and the network.

It’s the infrastructure stupid.

This was the critical difference – I wrote about it recently – between winning and losing. I was reminded of this by an old PowerPoint presentation. They talked about using commodity compute infrastructure to out muscle everyone and doing analysis of the web like it has never been done before. It seems so obvious today – but back then it was an idea ahead of its time. The impact of pizza box servers was yet to be seen, and companies like Cobalt Networks (sold to Sun Microsystems for $1 2.4 billion) were selling early versions of Linux-powered thin servers, but they were not cheap by any means.

Many on Wall Street question why Google spends so much money on infrastructure. The question is why not – after all every millisecond of performance means more searches and more searches mean more advertising. More infrastructure means more crawling, more indexing and better results. I think that slide reminds us of the fact that infrastructure-as-an-advantage is in the DNA of Google. And that is unlikely to change – and that is why world’s smartest engineers and computer scientists still want to work there. [digg=]

History has made a genius out of all who bet on Larry and Sergey – the investors, the employees, journalists who were enthralled by their story. In reality to those who built Google, it was the only option.

Tomorrow: What You, Me & Corporations Can Learn From Google