google history(final)

7/31/2019 Google History(Final)

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GOOGLE HISTORY, DEVELOPMENT AND GROWTH

GOOGLE RISING

1996

Google started as a research project done by Larry

Page(computer science PhD student at Stanford) . The

research is called Backrub aimed to document the linkstructure of the web. Servey Brin, PhD student and

gifted mathematician become part of the research and

formulated algorithm that rank pages not only

according to the number of link of that site but also the

number of links to the linking sites. This algorithm is a

great shift from the tradition search engine which only

returns irrelevant pages. This algorithm ranks pages first

according to its relevance, most visited sites before

returning the pages in order of relevance using back link

methodology.The search engine was released inStanford website in August 1996. They named it Google

from the term for the number 1 followed by 100 zeros.

Afterwards, Brin and Page talk to several companies for

possible licensing of Google like Excite and Yahoo

executives but they just past it out.

Late 1998

Brin and Page realized to keep resources required to

keep google scaling, thus they need enough capital and

start their own company. Andy Bechtolsheim hand

them $100,000 as a capital. In September 7, 1998,

Google was formally incorporated with Page as CEO and

Brin as President. From that day, Traffic was increasing

by 50% a month which caught much of the investors to

invest on the company. Jeff Bezo,founder of Amazon,

put $1million as investment to Google.

For Google search engine betterment, Brin and Page

had custom designed low cost, Lenux server

architecture that was modular and can be scaled

rapidly.

THE RISE OF GOOGLE BUSINESS MODEL

1999

To finance the growth of their search engine in early

1999, Brin and Page started to look for venture capita

funding. Because those days were the height of the dotcom, and money was easy to find, the company were

able to raise $25million from two premier firms in

Silicon Valley, Sequoia Capital and Kleiner Perkins

Caufield & Byers.

During Late 1999, Google had grown to about 40

employees serving some 3.5million searches a day while

spending about $500,000 a month and yet there is stil

no business model.

In reponse, Brin and Page studied the business mode

used by GoTO.com. They had seen the value of the pay-

per-click model and auctioning off keywords in making

good money. Though they are now centred on gaining

profit, they still make sure that their search results are

not tainted with the desire to make money. Brin and

Page were ideologically attached to the idea of serving

possible results to users, uncorrupted by commercia

consideration. They believed that Googles Web page

should be kept as clean and elegant as possible

something that seemed to appeal to users. Moreover

they knew that users valued the fact that Google served

relevant search results that were unbiased.

One of business model they implemented is the placing

of text-based ads on the right-hand side of the page

clearly separated from search results. They also

adopted the pay-per-click of GoTo.com. But unlike

GoTO.com, Brin and Page decided that in addition to

the price an advertiser had paid for a keyword, ads

should be ranked according to relevance, thusmotivates advertisers to make their ads more

appealing. In bidding process, they employ the Vickery

second price auction methodology wherein the first

place bidder shall pay only 1 cent more than the second

bidder, and the second place bidder shall pay 1 cent

more than the 2nd highest bidder. The expensive bid was

reported to be $30.


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2000

While developing this service, Google continued to

grow like wildfire. In mid-2000, the service was dealing

with 18 million search queries a day, and the index

surpassed one billion documents, making it by far the

largest search engine on the Web. By late 2000, when

Google introduced the first version of its new service,

adWords, the company was serving 60million search

queries a day-giving it a scale that GoTo.com never

came close to achieving.

Internet users started to gravitate to the new search

engine called Google. People realized the google put

their life much easier. One click and all your queries will

be addressed.

GOOGLE GROWS UP

(2001 2008)

From 2001, revenue growth was $16.6 billion while net

income increase by $4.2 billion in 2007.

2001

Schmidt was elected as the new CEO because the board

believes that a more grown up and experienced person

involving large companies to better prepared the

Google for the next stage. That time Brin and Page was

still at their twenties. They are assigned as president in

technology and products, respectively. Though Schmidt

is the CEO, Brin and Page still continued to influence

primarily the Googles strategies and policies. Working

closely together, the three drove the development of

set of values and an organization that defines Google

uniquely. Since then, Google has endeavoured to keep

enhancing the efficacy of its search engine, continually

improving the search algorithms and investing heavily in

computing resources.

2002

In February 2002, Google introduced a new version of

AdWords that included for the first time the full set of

pay-per-click advertising, keyword auctions, and

advertising links ranked by relevance. Google had hit

the business model that would propel the company into

the big league.

2003

AdSense was introduced in the market. It allowed third

part publishers large and small to access Googles

massive network of advertisers on a self-service basis

AdSense has been appealing particularly to many smal

publishers, such as web bloggers. They found out that

by adding a few lines of code to their site, they could

suddenly monetize their content. However many

advertisers feel that AdSense is not as effective as

AdWords in driving traffic to their sites. Despite this,

AdSense accounts for 155 of total revenue of Google

or around $1billion.

2004

Initiate a IPO to gain access to capital and to provide

liquidity.

2005

To increase the speed of returning the answers for

queries, Google had employed 250,000 lenux servers to

handle more than 3,000 searches a second.

2006

To google becomes a verb, and Google become an

accepted word to mean go to and later included in

the oxford english dictionary.

On March, they introduced the google spreadsheet

(word and excel online). It resembles that of the

Microsoft Word and Excel. And on July, Google


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introduced the Checkout-web based payment system

owned by eBay. It offers secure online payment

functionality for merchants and consumers at a

discounted price.

2007

Google has 2.7 billion on information technology assets,

close to 400,000 computers configured into large scale

clusters dedicated its jobs in running the search

engines; and spent around $600 million in maintaining

its system.

Late 2007, introduced Android, a suite of mobile

softwares for smart handset including operating system

and applications that work with it.

Mid-2008

62% of all internet searches in US was made through

google. Two years earlier, it just stood at 45%

In addition, over the last six years, Google has

introduced the rash of products offering. They include

free e-mail(gmail); and online chat program; a calendar;

a blog site(blogger); a social networking site(Orkut);

finance site(Google Money); a service for finding and

editing and sharing photos(Picasa); and plans to offer

citywide fee Wi-Fi networks.

Googles track of record with new products offerings

has been mixed. In mid.-2006, two years after its

introduction, gmail generated 25% of the traffic of e-

mail on Yahoo! And MSN. Froogle was ranked *8 in the

world while Google Talk was ranked 10 in the world,

with 2% of the users market. Google Maps and Google

News, both seen as successful.By late 2008, Google

Apps was also gaining modest market traction with

some one million registered users. While Orkut and

Google Finance had tiny market share.

Their new products also include: Google Map; Google

Earth; and Google Desktop(enable users to search file in

their own desktop).

AGREEMENTS ENTERED

2005, renewed the 3 year contract with AOL toprovide search engine service to their sites.

2006, struck a deal with Fox Interactive underwhich Google will provides advertising across

Fox social networking sites.

Mid 2006, agreement with Dell Computerswhere Dell will preload Google softwares unto

its systems.

Purchased YouTube. 2007, purchased Doubleclick which specializes

on online display advertising.

Although some are not that profitable but Google is

pushing on other markets because most of their

expenses are fixed. A less revenue generating market

could still lift their overall income.

VISION AND VALUES

To preserved and strengthen the companys values,Brin

and Page gathered a core group of early employees and

asked them to come up with a policy for ensuring that

the companys culture did not fracture as the company

added employees.

The central vision of Google is to organize the worlds

information, and make it universally acceptable anduseful. The team also articulated a set of 10 core

philosophies. Below are few of those:

Dont be evil. The google should notcompromise the integrity of its search results.

Focus on the user and all else will follow. Theyfocus first on giving the users the best possible

service they deserves to have before focusing


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on business model to monetized that value. This

may reflect Google past experiences.

Launch early and Often(not stated).Introduction of rash new products and

continually upgrade those to meet users needs.

Data driven. In their decision making, someonesopinion will count for nothing unless backed up

with enough and relevant data.

Finally, the company is devoting considerable resources

to make sure that the employees are working in a

supportive and stimulating environment.

ORGANIZATION

Google has a flat organization. The ratio of manager to

employee is 1:20 and may increase up to 1:40. Thestructure is reportedly based on teams. Big projects are

broken down and allocated to small, tightly focused

teams. Hundreds of projects may be going on at the

same time. Teams often throw out new software in six

weeks or less and look at how users respond hours

later. Google can try new user interface, or some other

tweak, with just 0.1% of its users and gets massive

feedback very quickly, letting it decide a projects fate in

weeks.

Google introduces the 20% rule that encourages

employees creativity. Employees have given 20% of

their time to work on what they interested more. This is

designed to encourage employees to think beyond the

box. Google established a process by which projects out

of 20% rule can be evaluated, receive feedback from

peers, and ultimately garner funding. When the project

reached the management, they were given 20%

minutes to defend their project. Stated below are some

principles that guide product development in Google:

Ideas come from everywhere: Set up a systemwhere good ideas rise to the top.

Focus on users, not money: Money followsconsumers. Advertisers follow consumers. If

you amass a lot of consumers you will find ways

to monetize your ideas.

Innovation, not instant perfection: Putprocedures in the market, learn and iterate.

Dont kill projects, morph them: IF an idea hasmanaged to make its way out of the door, there

is usually some kernel of truth to it. Dont walk

away from ideas; think of ways to replace or

rejuvenate them.

The Google hiring strategy is rigorous. From IQ test

panel of interview to background check to make sure

that only the right person is hired by the company

those that add value to the company.

ADVERTISING INDUSTRY

Powered by the rapid growth of search based pay-per

click advertising, total global advertising spending onthe World Wide Web exceeded $50billion in 2008, and

was predicted to hit $78billion in 2010, around 50%

coming from United States. In terms of mix advertising

online, search based advertising now dominates

followed by display advertising and classifieds.

It is to be noted that on July 2008, Google is the

dominant search engine in America.

LOOKING FORWARD

With online advertising predicted to grow strongly

Google seems to be in the drivers seat. It has the

largest market share in search, the greater name

recognition, and is capturing a proportionately greater

share of search-based advertising than its rivals.

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