|Founded||Menlo Park, California (4 September 1998)|
|Founder||Sergey Brin |
|Headquarters||Googleplex, Mountain View, California , |
|Key people||Dr. Eric E. Schmidt |
(Chairman) & (CEO)
|Industry||Internet, Computer software|
|Products||See list of Google products|
|Market cap||Range during 2008 Q2: |
US$ 138.37 to 186.89 Billion
|Revenue||▲55.97% US$ 16.593 Billion (2007)|
|Operating income||▲30.64% US$ 5.084 Billion (2007)|
|Net income||▲25.33% US$ 4.203 Billion (2007)|
|Total assets||▲ US$ 25.335 Billion (2007)|
|Total equity||▲ US$ 22.689 Billion (2007)|
|Employees||19,604 (30 June 2008)|
Google Inc. is an American public corporation, earning revenue from advertising related to its Internet search, e-mail, online mapping, office productivity, social networking, and video sharing services as well as selling advertising-free versions of the same technologies. The Google headquarters, the Googleplex, is located in Mountain View, California. As of 30 June 2008 the company has 19,604 full-time employees.
Google was co-founded by Larry Page and Sergey Brin while they were students at Stanford University and the company was first incorporated as a privately held company on 4 September 1998. The initial public offering took place on 19 August 2004, raising US$1.67 billion, making it worth US$23 billion. Google has continued its growth through a series of new product developments, acquisitions, and partnerships. Environmentalism, philanthropy, and positive employee relations have been important tenets during the growth of Google, the latter resulting in being identified multiple times as Fortune Magazine's #1 Best Place to Work. The unofficial company slogan is "Don't be evil", although criticism of Google includes concerns regarding the privacy of personal information, copyright, censorship, and discontinuation of services.
Google began in January 1996, as a research project by Larry Page, who was soon joined by Sergey Brin, two Ph.D. students at Stanford University in California. They hypothesized that a search engine that analyzed the relationships between websites would produce better ranking of results than existing techniques, which ranked results according to the number of times the search term appeared on a page. Their search engine was originally nicknamed "BackRub" because the system checked backlinks to estimate the importance of a site. A small search engine called Rankdex was already exploring a similar strategy.
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 15 September 1997, and the company was incorporated as Google Inc. on 4 September 1998 at a friend's garage in Menlo Park, California. The total initial investment raised for the new company amounted to almost US$1.1 million, including a US$100,000 check by Andy Bechtolsheim, one of the founders of Sun Microsystems.
In March 1999, the company moved into offices in Palo Alto, home to several other noted Silicon Valley technology startups. After quickly outgrowing two other sites, the company leased a complex of buildings in Mountain View at 1600 Amphitheatre Parkway from Silicon Graphics (SGI) in 2003. The company has remained at this location ever since, and the complex has since come to be known as the Googleplex (a play on the word googolplex). In 2006, Google bought the property from SGI for US$319 million.
The Google search engine attracted a loyal following among the growing number of Internet users, who liked its simple design and usability. In 2000, Google began selling advertisements associated with search keywords. The ads were text-based to maintain an uncluttered page design and to maximize page loading speed. Keywords were sold based on a combination of price bid and clickthroughs, with bidding starting at US$.05 per click. This model of selling keyword advertising was pioneered by Goto.com (later renamed Overture Services, before being acquired by Yahoo! and rebranded as Yahoo! Search Marketing) — which was an Idealab spin off (created by Bill Gross) and was the first company to successfully provide a pay-for-placement search service. Overture Services later even sued Google for stealing their "idea" for their AdWords service but this case was settled out-of-court, with Google giving them some shares. Thus, while many of its dot-com rivals failed in the new Internet marketplace, Google quietly rose in stature while generating revenue.
The name "Google" originated from a common misspelling of the word "googol", which refers to 10100, the number represented by a 1 followed by one hundred zeros. Having found its way increasingly into everyday language, the verb "google", was added to the Merriam Webster Collegiate Dictionary and the Oxford English Dictionary in 2006, meaning "to use the Google search engine to obtain information on the Internet."
A patent describing part of the Google ranking mechanism (PageRank) was granted on 4 September 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 1998, in the form of a US$100,000 contribution from Andy Bechtolsheim, co-founder of Sun Microsystems, given to a corporation which did not yet exist. 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 (John Doerr) and Sequoia Capital (Michael Moritz), Google being a rare co-investment by the two rivals.
The Google IPO took place on 19 August 2004. 19,605,052 shares were offered at a price of US$85 per share. Of that, 14,142,135 (another mathematical reference as √2 ≈ 1.4142135) were floated by Google, and the remaining 5,462,917 were offered by existing stockholders. The sale of US$1.67 billion gave Google a market capitalization of more than US$23 billion. The vast majority of the 271 million shares remained under the control of Google. Many Google employees became instant paper millionaires. Yahoo!, a competitor of Google, also benefited from the IPO because it owned 8.4 million shares of Google as of 9 August 2004, ten days before the IPO.
The stock performance of Google after its first IPO launch has gone well, with shares hitting US$700 for the first time on 31 October 2007, due to strong sales and earnings in the advertising market, as well as the release of new features such as the desktop search function and its iGoogle personalized home page. The surge in stock price is fueled primarily by individual investors, as opposed to large institutional investors and mutual funds.
While the primary business interest is in the web content arena, Google has begun experimenting with other markets, such as radio and print publications. On 17 January 2006, Google announced that its purchase of a radio advertising company "dMarc", which provides an automated system that allows companies to advertise on the radio. 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. They have been filling unsold space in the newspaper that would have normally been used for in-house advertisements.
- See also: List of Google acquisitions
Since 2001, Google has acquired several small start-up companies.
In February 2006, software company Adaptive Path sold Measure Map, a weblog statistics application, to Google. Registration to the service has since been temporarily disabled. The last update regarding the future of Measure Map was made on 6 April 2006 and outlined many of the known issues of the service.
In late 2006, Google bought online video site YouTube for US$1.65 billion in stock. Shortly after, on 31 October 2006, Google announced that it had also acquired JotSpot, a developer of wiki technology for collaborative Web sites.
In 2005, Google entered into partnerships with other companies and government agencies to improve production and services. Google announced a partnership with NASA Ames Research Center to build up 1,000,000 square feet (93,000 m2) of offices and work on research projects involving large-scale data management, nanotechnology, distributed computing, and the entrepreneurial space industry. Google also entered into a partnership with Sun Microsystems in October to help share and distribute each other's technologies. The company entered into a partnership with AOL of Time Warner, to enhance each other's video search services.
The same year, the company became a major financial investor of the new .mobi top-level domain for mobile devices, in conjunction with several other companies, including Microsoft, Nokia, and Ericsson among others. In September 2007, Google launched, "Adsense for Mobile", a service for its publishing partners which provides the ability to monetize their mobile websites through the targeted placement of mobile text ads, and acquired the mobile social networking site, Zingku.mobi, to "provide people worldwide with direct access to Google applications, and ultimately the information they want and need, right from their mobile devices."
Google has developed a partnership with GeoEye to launch a satellite providing Google with high-resolution (0.41m black and white, 1.65m color) imagery for Google Earth. The satellite was launched from Vandenberg Air Force Base on 6 September 2008.
Products and services
Google has created services and tools for the general public and business environment alike; including Web applications, advertising networks and solutions for businesses.
99% of Google's revenue is derived from its advertising programs. For the 2006 fiscal year, the company reported US$10.492 billion in total advertising revenues and only US$112 million in licensing and other revenues. Google is able to precisely track users' interests across affiliated sites using DoubleClick technology and Google Analytics. Google's advertisements carry a lower price tag when their human ad-rating team working around the world believes the ads improve the company's user experience. Google AdWords allows Web advertisers to display advertisements in Google's search results and the Google Content Network, through either a cost-per-click or cost-per-view scheme. Google AdSense website owners can also display adverts on their own site, and earn money every time ads are clicked.
Google has also been criticized by advertisers regarding its inability to combat click fraud, when a person or automated script is used to generate a charge on an advertisement without really having an interest in the product. Industry reports in 2006 claim that approximately 14 to 20 percent of clicks were in fact fraudulent or invalid.
The Google web search engine is the company's most popular service. As of August 2007, Google is the most used search engine on the web with a 53.6% market share, ahead of Yahoo! (19.9%) and Live Search (12.9%). Google indexes billions of Web pages, so that users can search for the information they desire, through the use of keywords and operators, although at any given time it will only return a maximum of 1,000 results for any specific search query. Google has also employed the Web Search technology into other search services, including Image Search, Google News, the price comparison site Google Product Search, the interactive Usenet archive Google Groups, Google Maps, and more.
In 2004, Google launched its own free web-based e-mail service, known as Gmail (or Google Mail in some jurisdictions). Gmail features spam-filtering technology and the capability to use Google technology to search e-mail. The service generates revenue by displaying advertisements and links from the AdWords service that are tailored to the choice of the user and/or content of the e-mail messages displayed on screen.
In early 2006, the company launched Google Video, which not only allows users to search and view freely available videos but also offers users and media publishers the ability to publish their content, including television shows on CBS, NBA basketball games, and music videos.
Google has also developed several desktop applications, including Google Desktop, Picasa, SketchUp and Google Earth, an interactive mapping program powered by satellite and aerial imagery that covers the vast majority of the planet. Google Earth is generally considered to be remarkably accurate and extremely detailed. Many major cities have such detailed images that one can zoom in close enough to see vehicles and pedestrians clearly. Consequently, there have been some concerns about national security implications; contention is that the software can be used to pinpoint with near-precision accuracy the physical location of critical infrastructure, commercial and residential buildings, bases, government agencies, and so on. However, the satellite images are not necessarily frequently updated, and all of them are available at no charge through other products and even government sources; the software simply makes accessing the information easier. A number of Indian state governments have raised concerns about the security risks posed by geographic details provided by Google Earth's satellite imaging.
Google has promoted their products in various ways. In London, Google Space was set-up in Heathrow Airport, showcasing several products, including Gmail, Google Earth and Picasa. Also, a similar page was launched for American college students, under the name College Life, Powered by Google.
In 2007, some reports surfaced that Google was planning the release of its own mobile phone, possibly a competitor to Apple's iPhone. The project, called Android provides a standard development kit that will allow any "Android" phone to run software developed for the Android SDK, no matter the phone manufacturer.
Google entered the Enterprise market in February, 2002 with the launch of its Google Search Appliance, targeted toward providing search technology to larger organizations. Providing search for a smaller document repository, Google launched the Mini in 2005.
Late in 2006, Google began to sell Custom Search Business Edition, providing customers with an advertising-free window into Google.com's index. In 2008, Google re-branded its next version of Custom Search Business Edition as Google Site Search.
In 2007, Google launched Google Apps Premier Edition, a version of Google Apps targeted primarily at the business user. It includes such extras as more disk space for e-mail, API access, and premium support, for a price of US$50 per user per year. A large implementation of Google Apps with 38,000 users is at Lakehead University in Thunder Bay, Ontario, Canada.
Google runs its services on several server farms, each comprising thousands of low-cost commodity computers running stripped-down versions of Linux. While the company divulges no details of its hardware, a 2006 estimate cites 450,000 servers, "racked up in clusters at data centers around the world."
Corporate affairs and culture
Google is known for its relaxed corporate culture, of which its playful variations on its own corporate logo are an indicator. In 2007 and 2008, Fortune Magazine placed Google at the top of its list of the hundred best places to work. Google's corporate philosophy embodies such casual principles as "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."
Google has been criticized for having salaries below industry standards. For example, some system administrators earn no more than US$35,000 per year – considered to be quite low for the Bay Area job market. However, Google's stock performance following its IPO has enabled many early employees to be competitively compensated by participation in the corporation's remarkable equity growth.
After the company's IPO in August 2004, it was reported that founders Sergey Brin and Larry Page, and CEO Eric Schmidt, requested that their base salary be cut to US$1.00. Subsequent offers by the company to increase their salaries have been turned down, primarily because, "their primary compensation continues to come from returns on their ownership stakes in Google. As significant stockholders, their personal wealth is tied directly to sustained stock price appreciation and performance, which provides direct alignment with stockholder interests." Prior to 2004, Schmidt was making US$250,000 per year, and Page and Brin each earned a salary of US$150,000.
They have all declined recent offers of bonuses and increases in compensation by Google's board of directors. In a 2007 report of the United States' richest people, Forbes reported that Sergey Brin and Larry Page were tied for #5 with a net worth of US$18.5 billion each.
In 2007 and through early 2008, Google has seen the departure of several top executives. Justin Rosenstein, Google’s product manager, left in June of 2007. Shortly thereafter, Gideon Yu, former chief financial officer of YouTube, a Google unit, joined Facebook along with Benjamin Ling, a high-ranking engineer, who left in October 2007. In March 2008, two senior Google leaders announced their desire to pursue other opportunities. Sheryl Sandburg, ex-VP of global online sales and operations began her position as COO of Facebook while Ash ElDifrawi, former head of brand advertising, left to become CMO of Netshops Inc.
Google's persistent cookie and other information collection practices have led to concerns over user privacy. As of 11 December 2007, Google, like the Microsoft search engine, stores "personal information for 18 months" and by comparison, Yahoo! and AOL (Time Warner) "retain search requests for 13 months."
U.S. District Court Judge Louis Stanton, on July 1, 2008 ordered Google to give YouTube user data / log to Viacom to support its case in a billion-dollar copyright lawsuit against Google. Google and Viacom, however, on July 14, 2008, agreed in compromise to protect YouTube users' personal data in the $1 billion (£ 497 million) copyright lawsuit. Google agreed it will make user information and internet protocol addresses from its YouTube subsidiary anonymous before handing over the data to Viacom. The privacy deal also applied to other litigants including the FA Premier League, the Rodgers & Hammerstein Organisation and the Scottish Premier League. The deal however did not extend the anonymity to employees, since Viacom would prove that Google staff are aware of uploading of illegal material to the site. The parties therefore will further meet on the matter lest the data be made available to the court.
Google's headquarters in Mountain View, California, is referred to as "the Googleplex" in a play of words; a googolplex being 1 followed by a googol of zeros, and the HQ being a complex of buildings (cf. multiplex, cineplex, etc). The lobby is decorated with a piano, lava lamps, old server clusters, and a projection of search queries on the wall. 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 foods and drinks.
In 2006, Google moved into 311,000 square feet (28,900 m2) of office space in New York City, at 111 Eighth Ave. in Manhattan. The office was specially designed and built for Google and houses its largest advertising sales team, which has been instrumental in securing large partnerships, most recently deals with MySpace and AOL. In 2003, they added an engineering staff in New York City, which has been responsible for more than 100 engineering projects, including Google Maps, Google Spreadsheets, and others. It is estimated that the building costs Google US$10 million per year to rent and is similar in design and functionality to its Mountain View headquarters, including foosball, air hockey, and ping-pong tables, as well as a video game area. In November 2006, Google opened offices on Carnegie Mellon's campus in Pittsburgh. By late 2006, Google also established a new headquarters for its AdWords division in Ann Arbor, Michigan.
The size of Google's search system is presently undisclosed. The site, also referred to by the media as Project 02, was chosen due to the availability of inexpensive hydroelectric power and a large surplus of fiber optic cable, remnants of the dot com boom of the late 1990s. The computing center is estimated to be the size of two football fields, and it has created hundreds of construction jobs, causing local real estate prices to increase 40%. Upon completion, the center is expected to create 60 to 200 permanent jobs in the town of 12,000 people.
Google is taking steps to ensure that their operations are environmentally sound. In October 2006, the company announced plans to install thousands of solar panels to provide up to 1.6 megawatts of electricity, enough to satisfy approximately 30% of the campus' energy needs. The system will be the largest solar power system constructed on a U.S. corporate campus and one of the largest on any corporate site in the world. Google has faced accusations in Harper's Magazine of being extremely excessive with their energy usage, and were accused of employing their "Don't be evil" motto as well as their very public energy saving campaigns as means of trying to cover up or make up for the massive amounts of energy their servers actually require.
Innovation time off
As an interesting motivation technique (usually called Innovation Time Off), all Google engineers are encouraged to spend 20% of their work time (one day per week) on projects that interest them. Some of Google's newer services, such as Gmail, Google News, Orkut, and AdSense originated from these independent endeavors. In a talk at Stanford University, Marissa Mayer, Google's Vice President of Search Products and User Experience, stated that her analysis showed that half of the new product launches originated from the 20% time.
Easter eggs and April Fool's Day jokes
Google has a tradition of creating April Fool's Day jokes—such as Google MentalPlex, which allegedly 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, they featured Google Lunar (which claimed to feature jobs on the moon), and in 2005, a fictitious brain-boosting drink, termed Google Gulp was announced. In 2006, they came up with Google Romance, a hypothetical online dating service. In 2007, Google announced two joke products. The first was a free wireless Internet service called TiSP (Toilet Internet Service Provider) in which one obtained a connection by flushing one end of a fiber-optic cable down their toilet and waiting only an hour for a "Plumbing Hardware Dispatcher (PHD)" to connect it to the Internet. Additionally, Google's Gmail page displayed an announcement for Gmail Paper, which allows users of their free email service to have email messages printed and shipped to a snail mail address.
Google's services contain a number of Easter eggs; for instance, the Language Tools page offers the search interface in the Swedish Chef's "Bork bork bork," Pig Latin, ”Hacker” (actually leetspeak), Elmer Fudd, and Klingon. In addition, the search engine calculator provides the Answer to Life, the Universe, and Everything from Douglas Adams' The Hitchhiker's Guide to the Galaxy. As Google's search box can be used as a unit converter (as well as a calculator), some non-standard units are built in, such as the Smoot. Google also routinely modifies its logo in accordance with various holidays or special events throughout the year, such as Christmas, Mother's Day, or the birthdays of various notable individuals.
IPO and culture
Many people speculated that Google's IPO would inevitably lead to changes in the company's culture, 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. Later Mr. Page said, "We think a lot about how to maintain our culture and the fun elements. We spent a lot of time getting our offices right. We think it's important to have a high density of people. People are packed together everywhere. We all share offices. We like this set of buildings because it's more like a densely packed university campus than a typical suburban office park." Google has faced allegations of sexism and ageism from former employees.
However, many analysts are finding that as Google grows, 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. In an effort to maintain the company's unique culture, Google has designated a Chief Culture Officer in 2006, who also serves as the Director of Human Resources. The purpose of the Chief Culture Officer is to develop and maintain the culture and work on ways to keep true to the core values that the company was founded on in the beginning—a flat organization with a collaborative environment.
In 2004, Google formed a for-profit philanthropic wing, Google.org, with a start-up fund of US$1 billion. The express mission of the organization is to create awareness about climate change, global public health, and global poverty. One of its first projects is to develop a viable plug-in hybrid electric vehicle that can attain 100 mpg. The founding and current director is Dr. Larry Brilliant.