The Google Story – How a Noun Became a Verb

I’ve just finished reading The Google Story by David A. Vise, originally published in 2003 and updated for Google’s ten year anniversary in 2008. The book was referenced in a blog post as a highly regarded and worthwhile read. I couldn’t agree more.

Vise’s book takes us deep into the many facets of Google’s meteoric rise and its critical tipping points along the way. The story provides insights on entrepreneurship, establishing a killer culture, revenue generation strategies, viral marketing, channel and affiliate strategies, closing the deal, venture financing, product innovation and much more. The book also gives a fascinating look at the formation and progression of the company itself. What originally started as a PHD thesis project between two college friends has turned into a worldwide phenomenon. Google has become one of the fastest growing and most successful companies of all time with a market cap exceeding $150 Billion in 2010.

I highly recommend the book, in particular for CEOs, founders of startups, business development professionals, software executives, business strategists and emarketers. As a teaser I have highlights in relevant categories below. Ultimately if you are any of the above, the book is a must read.

Google’s History – Interesting Facts You Probably Didn’t Know…

  • Google co-founders Sergey Brin and Larry Page each thought the other obnoxious when they met at Stanford, but eventually hit it off and became close friends.
  • Brin and Page were PHD candidates at Stanford and only reluctantly left school and formed Google when no one showed interest in licensing their search technology in 1998. It’s suggested in the book that $1M would have got a deal done. Alta Vista, the market leader then, had a “not invented here” mentality. Yahoo, Microsoft and many others were not interested in a pure “search” play. A comprehensive portal strategy was all the rage at the time. Even eventual Chairman and CEO Eric Schimdt “thought search was dead” before reluctantly agreeing to meet the founders at the suggestion of John Doer of Kleiner Perkins, a venture capital investor in Google.
  • Google’s competitive advantage went beyond software and included its vast computer network strung together with cheap customized PCs, spares parts, and open source software cobbled together on a shoestring budget. Over the years this cost conscious investment approach would prove to be a competitive advantage and barrier to entry for competitors with even the deepest pockets. Today Google has more than a million custom assembled PCs running on patented software programs.
  • Google was not first in search (more than a dozen competitors existed in 1997) or search advertising (Yahoo’s Overture unit was the innovator in search advertising).
  • At its core Google is an advertising company which dwarfed traditional media companies in the sector by 2006. And although its core business was advertising, it did almost none to promote its brand.

Branding and Web Marketing

  • Google is actually the misspelled version of the word Googol, which is the number “one” followed by 100 zeros. Brin and Page used the wrong spelling when they searched for the availability of the domain. They stuck with the misspelled version when it was discovered was already taken.
  • Brin designed the colorful logo with a free, open source design program called GIMP.
  • Google is famous for its clean, unobtrusive home page. However, when they finally conducted usability studies they were surprised to observe users staring at the home page for more than 30 seconds waiting for graphics and popup ads to load rather than start their search.
  • Google didn’t have a sales force or a marketing budget in the early years. They relied on word of mouth, positive industry reviews and affiliate relationships to build traffic and a satisfied user base.

Business Revenue Model

  • In an early paper they published about Google search, Brin and Page felt ad-funded search engines were “inherently biased towards advertisers.”
  • The founders wanted Google to be a real business and ultimately embraced an advertising model that was consistent with their vision of having the best search experience for users and not violate their company motto “Don’t Be Evil”. They were pragmatic and knew they needed a scalable funding model.
  • Half of Google’s revenues come from affiliate relationships, numbering 100’s of thousands.

Raising Capital

  • Google raised its first $100,000 from Andy Bechtolsheim, a founder at Sun and angel investor who wrote the check on the spot after seeing a demo and talking to Brin and Page in August of 1998. Brin couldn’t deposit the check for three weeks while he officially formed the company and set up a checking account. Andy’s stake in Google was valued at more than $1.5 Billion in 2010.
  • At the time Google acquired venture capital the anticipated revenue model wasn’t clear, for Google was licensing its technology to other companies. This proved to be tough going with intense price pressure and long sales cycles.
  • Yahoo, a competitor, enjoyed the ride as a Google stockholder when granted 1.27 million shares in a pre-IPO settlement with Google for allegedly copying its advertising model.

Upon completing the book, you’ll realize how much The Google Story provides a backdrop for the world we live in today. The rise of Google disrupted advertising, inbound marketing, search engine strategies and the way in which the internet is used. The verb “google” has even entered our society’s lexicon and is used all over the world. For a project that had such humble beginnings between two friends at Stanford, Google has truly become a world-changing business and a history that provides valuable lessons.

Bonus Material

After finishing the book, I checked a couple of other sources and recommend the following YouTube clips from Discovery Science and hosted by technology journalist, John Heilemann. There are fairly short, with great interviews with key industry players at the time:

1. Google story video part 1 covers Google’s founding – 5 minutes. Go to video here

2. Google story video part 2 covers their unique idea to revolutionize search – 14 minutes. Go to video here

3. Google story video part 3 covers the search for an advertising model – 14 minutes. Go to video here

You can get the book at Amazon here

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