CHAPTER
ELEVEN
Google Enters
Adolescence
(2007-2008)
For all its democratic ethos, its belief in “the
wisdom of crowds,” at Google the engineer is king, held above the
crowd. The vaunted 20 percent time that is parceled out selectively
by management to nonengineers is given universally to the half of
Google employees who are technically trained. Salaries for
engineers are relatively modest—a beginning engineer starts at
around $100,000 (versus about $50,000 for nonengineers), and rises
to about $300,000, including a bonus—but stock rewards are
extravagant. Google rewarded its employees with $868.6 million in
stock in 2007, a one-year increase of more than 90
percent.
The importance the
company attaches to engineers is spotlighted by the time Google’s
founders and CEO Schmidt devote to meetings with them. Their
Tuesday, Wednesday, and Friday afternoons are crammed with Google
Product Strategy (GPS) reviews. Teams made up mostly of engineers
meet in a long, dimly lit, low-ceilinged conference room named Mar
rakesh, on the second floor of Building 43, next to the office that
Page and Brin share. Industrial gray carpet covers the floor and
melts into the gray walls. A massive, pale oak custom-made
rectangular table stretches almost the full length of the room; at
one end are billowy red-velvet couches, and at the other, large,
flat LCD screens. Whiteboards line the walls. There are two
projectors, so time is not wasted unloading and reloading
projectors during multiple presentations, and all cables and wires
are color coded to minimize time locating the right connections for
laptops and other electronic devices.
Meetings last from
fifteen minutes to two hours, and are scheduled one after another,
like airport takeoffs and landings. “If you want to talk to Larry
or Sergey, you can at one of these meetings,” said Vice President
Megan Smith. “If you work at another company, can you get to the
CEO within seven days? Probably not.” Often at these meetings, said
Tim Armstrong, “Larry is going to take one side of the argument and
Sergey is going to take the exact opposite side, and what you’re
going to see is that everyone is going to argue in the middle and
at some point it is going to be clear what the answer is.” This is
a process that allows Page and Brin to learn, he said, “who comes
to the meeting prepared” and who has the passion and guts to
challenge them.
A meeting on October
9, 2007, did not quite follow this pattern. Brin and Page were to
meet with an engineering team to review their proposal for an
upgrade of AdWords 1.0. Since its introduction in early 2002, some
parts of AdWords had been substantially upgraded while others had
not. Small businesses complained that the system was too
complicated. Larger customers, such as eBay or Amazon, complained
that they wanted new features, including an ability to organize
their accounts by products and to break out expenditures by
country. To make these functions work, Google needed to enlarge its
computers that retained data and enhance the speed of the
advertising auctions. To demonstrate their commitment to a new
architecture, the founders decided to skip 2.0 and christened this
effort AdWords 3.0. The purpose of this session was to receive, and
review, the new product teams’ recommendations.
Everyone around the
conference table sat on gray-mesh ergonomic swivel chairs. Page was
wearing his usual jeans, and a gray T-shirt under a black sports
jacket; he sat in the middle of the table, a coffee cup in hand.
Brin arrived a few minutes late in jeans and a black crewneck
sweater, and plopped in the seat beside Page. More nattily attired
in a blue V-necked sweater over a light blue dress shirt and gray
slacks, Schmidt sat at the head of the table with a translucent
container of salad and a Diet Coke. Schmidt opened the meeting by
calling on the team leader, vice president of engineering Sridhar
Ramaswamy, to describe the teams’ recommendations.
The upgraded system
they proposed, said Ramaswamy, would be less complicated for
advertisers, would produce search results faster, and would be
“scalable” in that it would allow for the retention of more data.
But, he cautioned, it was not quite the gut renovation that had
been requested; it would be too expensive and require diverting too
many engineers to both speed up AdWords, as Page had urged them to,
and to make the sweeping computer changes needed to accommodate
Page’s database growth projections.
To a nonengineer, the
hour-long discussion was often incomprehensible—“three-tier
architecture,” “middle-tier API,” “UI tier,” “end-to-end
solutions,” “no latency,” “Java script bindings for third parties,”
“10 percent CTR,” “SQL base.” But no translator was required to
observe that Page and Brin were unhappy. At first, the founders
were stonily silent, sliding lower in their chairs, and
occasionally leaning over to whisper to each other. Intermittently,
Page looked away from the engineers; Brin, appearing alternately
distracted and irritated, would rise and stretch his legs on the
empty chair beside his. Schmidt began with technical questions to
the product team, but then he switched roles and tried to draw out
Page and Brin, saying, “Larry, say what’s really bugging
you.”
The room was quiet
for perhaps ten seconds before Page responded. When he did, he
scolded the engineers, saying they were not ambitious enough. Brin
concurred, adding that the proposal was “muddled” and
un-Google-like in its caution. “I named this 3.0 for a reason,”
Page interjected. “We wanted something big. Instead, you proposed
something small. Why are you so resistant?”
The engineering team
leader held his ground. Ramaswamy said that his entire team
concurred that the founders’ proposed changes would be too costly
in money, time, and engineering manpower. Page countered that a
significantly improved AdWords would make it easier for advertisers
and result in greater revenues. “You are polishing up the program.
I wanted to have a redesign.”
Schmidt stepped in to
summarize their differences. He noted that Brin and Page were
focused on the outcome, while the product team focused first on the
process, and concluded that the engineering improvements would
prove too “disruptive” to achieve the goal.
Brin said that
neither he nor Page wanted to add patches to the system, something
Microsoft has been criticized for when they stuff more code into
their already bloated operating system. “I’m just worried that we
designed the wrong thing,” Brin said. “And you’re telling me you’re
not designing the optimum system. I think that’s a mistake.... I’m
trying to give you permission to be bolder.”
Schmidt achieved a
cease-fire by asking the product team to make its slide
presentation. It demonstrated how the new product would actually
work for advertisers, allowing them to manage their accounts. The
discussion now went round and round with Schmidt finally stepping
in to summarize the technical changes that would be made, the
engineering challenges, the different approaches proposed by the
team and by the founders. As he spoke, I kept wondering: When Terry
Semel was CEO of Yahoo, or John Sculley CEO of Apple, could either
of those nonengineers understand what their engineers were saying?
Could they challenge them? (I would ask this question of Semel, who
said the Yahoo founders, Jerry Yang and David Filo, both engineers,
often accompanied him to similar meetings. Besides, he said, “I’d
make people describe things in English!”) Semel brought good
judgment and people skills to Yahoo when he arrived in 2000, but
the question begs to be asked: Did Yahoo slip technologically
because the CEO could not wrap his brain around the technology? Was
that why Apple slipped technologically after Steve Jobs had been
fired? (While Jobs does not possess an engineering degree, he seems
not to need a translator.)
Schmidt, sensing that
a resolution was not possible at this Google meeting, told the
product team to report back with a detailed design “which is
responsive to Larry and Sergey’s criticism,” one that laid out
“what it takes to build a good product,” and what it would cost in
time and money. He took care to balance this rebuke with praise:
“But this is very well done. I love it when people show me the
flaws in our products.”
Neither founder was
happy after the meeting. “I hope they try to do something a little
more ambitious,” Brin said two days later. He compared the project
to renovating a house. “Once you get into it, you know it’s going
to take some time and effort, so you may as well do as good a job
as you can. We prefer not to do too many small things when we know
where we’d like to get to.” Page was disappointed in what he
described as the engineering team’s “self-imposed, bureaucratic
response.” He sounded harsh, and a few seconds later he softened
his words: “It’s hard when you’re so focused to see the big
picture. It’s sort of easy for us. We just say, ‘If you’re going to
make changes at that rate, we’re going to go out of business. It’s
just not OK. It’s all of our revenue. We’re obviously doing some
things wrong. We need some sort of reasonable plan to fix these
things in our lifetime. Our lifetime means years, not multiple
years.’” Ultimately, Ramaswamy and his team came back with an
AdWords 3.0 proposal that went more than halfway toward the one
proposed by the founders; Google has been rolling out the new
system in stages.
THE MEETING
DEMONSTRATED that the ethos that had launched the Google rocket—to
shoot for the moon, not the tops of trees—was intact, no matter how
much the company had grown. Page and Brin’s passion for technology
was apparent, as was the way they push engineers to act boldly. At
meetings they feed off each other, punishing engineers and product
managers who think they have devised a “new” solution when, the
founders say, they have merely devised a “cute” solution, not a
fundamental one. Or as Schmidt said, “They think about what should
be, and they assume it is possible.”
Page describes his
and Brin’s role as supplying the “big picture,” and by way of
illustrating what he sees as a management rather than a
technological innovation, he cites the work of Gordon Moore at
Intel and his Moore’s law. “People think it’s this wild statement
about how the universe is, but it’s actually a management
innovation. Moore’s law was a statement saying, ‘We’re going to
double the performance [of integrated circuits or computer chips]
every eighteen months, and let’s get organized to do it.’ They
spent billions of dollars doing that. If you didn’t have Moore’s
law, you wouldn’t have that advancement. It’s actually causal in
another way.” The management pressure to double performance helps
assure it.
IN SPITE OF GOOGLE’S
RAPID GROWTH, or because of it, by 2007 the company had become a
target for lawsuits and sneers. Leading the chorus was Microsoft
CEO Steve Ballmer. In 2007, he had labeled Google “a one-trick
pony,” and had derided the company at nearly every public
opportunity since, telling reporters, “they have one product that
makes all their money, and it hasn’t changed in five years....
Search makes ninety-eight percent of all their money.” Irwin
Gotlieb, who is not in Ballmer’s adversarial camp, nevertheless
shared the view that Google’s attempt to broaden its reach had been
a failure. “Google is extremely good with search,” he said. “They
are good with AdSense. They are not as good with display
advertising. I believe they’ve lost a fortune on selling radio ads,
they’ve lost a fortune on selling print ads, and they are now
losing a fortune on selling television ads.” Tad Smith, the CEO of
Reed Business Information, which produces eighty publications and
Web sites, asked, “Where is the new pony? Apple came up with a new
pony, the iPod and iPhone. Microsoft came up with Office. Google is
throwing a lot of things against the wall, and so far only one has
stuck to the wall. And Google’s search growth will
slow.”
Eric Schmidt had a
ready rejoinder to Ballmer: “I like the trick!” And justifiably so:
the trick yielded more than sixteen billion dollars in revenues and
four billion dollars in profit in 2007. Schmidt went on, “The
Google model is one-trick to the extent that you believe targeted
advertising is one-trick.” Google now had about 150 products
available, and he believed the other efforts—You Tube; DoubleClick;
mobile phone products; cloud computing; selling TV, radio, and
newspaper ads—could sell targeted advertising. Yet with almost all
of its revenues pumping from only one of 150 wells, the
question—can Google find another gusher?—was “a legitimate
question,” as top Google executives like Elliot Schrage conceded at
the time.
At the start of 2008
there was evidence that the gusher was tapering off. Search
advertising was slowing. In January and February, comScore, a
research firm that tracks online activity, reported that Google
searchers were clicking on fewer text ads. Wall Street analysts
predicted Google’s revenue rise would stall, and the stock price
dropped; from its pinnacle of $742 on November 6, 2007, it had
plunged 40 percent by March 2008. The press, lusting for a new
narrative, fixed on this one: the Google rocket was crashing.
“Goodbye, Google,” read the headline in Forbes.com. Reporters buzzed, incessantly,
about dire days ahead. Google was spinning them, they believed,
when people like Tim Armstrong explained that the company was
trying to make the ads “more relevant” and had deliberately reduced
the number of ads appearing with search results to reduce clutter
and produce better information. Google said clicks without
purchases meant the ads were not useful to the user, so they were
eliminated. Reporters were deeply skeptical when chief economist
Hal Varian in early 2008 cautioned, “The clicks are not what is
relevant. The revenue is.”
But events would
demonstrate that the press and Wall Street analysts are often
handicapped by two imperatives: don’t be late with bad news, and
don’t be the lone blackbird left on the pole. In April 2008, when
the company released its first-quarter results, the narrative
changed. Google’s revenues had surged 42 percent compared to the
first quarter of 2007; its profits had jumped 30 percent, and as
Varian had suggested, its ad clicks had risen 20 percent. “Google
Inc’s Go-Go Era Apparently Isn’t Over,” said a report in the
Wall Street Journal. The Times headline was: “Google Defies the Economy and
Reports a Profit Surge.” As the report showed, Google hogged three
quarters of all U.S. search advertising dollars, compared to only 5
percent for Steve Ballmer’s Microsoft.
Yet Ballmer had a
point. Google had not figured out how to make money on its surfeit
of products. YouTube accounted for one of every three videos viewed
online, three billion of the nine billion viewed in January 2008.
The impact of this new medium would forever change the way politics
are conducted. Seven of the sixteen candidates who ran for
president in 2008 announced their candidacies on YouTube, and more
people saw a taped version of the July 2007 Democratic presidential
debate there than live on CNN. YouTube succeeded in democratizing
information. It became a viral hub where a candidate’s flubs or
fibs were exposed by a video. When Mitt Romney became a born-again
crusader against abortion, videos were posted of the former
governor of Massachusetts championing a woman’s right to an
abortion. Overseas, when Venezuelan strongman Hugo Chavez shut down
El Observador, an opposition newspaper,
it began broadcasting on YouTube.
However, YouTube made
no money. Its bandwidth and computer costs were steep, and it paid
for some of its content. Three senior Google executives with
knowledge of these figures said at the time that YouTube would lose
money in 2008, and these losses would grow in 2009, with revenues
initially projected at about $250 million and losses totaling about
$500 million. There were those, like Gotlieb, who believed “they’ll
never make money on YouTube.” He thought online display ads would
annoy viewers, and that most advertisers sought predictably
ad-friendly settings for their ads, something a site dominated by
user-generated content could not ensure. Like many Valley start-up
founders, Chad Hurley and Steve Chen believed, as Google’s did when
they launched, that if they first built traffic, money would
follow. By February 2008, Schmidt said he had summoned teams from
YouTube and Google to “start working on monetizing
it.”
“You didn’t tell us
to work on it,” a surprised Hurley said, recalled
Schmidt.
“Well, times have
changed,” said Schmidt.
Schmidt was not
unhappy with YouTube or its founders. He believed YouTube was
becoming nearly as ubiquitous a Web activity as e-mail. But Schmidt
wanted a business plan; he announced that his “highest priority” in
2008 was to figure out a way for YouTube “to make money.” He knew
that online video ads had to be different from television ads. Ads
that appeared before a video started would be annoying. Internet
users wanted to see the video as soon as they clicked on it.
Thirty-second ads anywhere in an online setting were too long. The
ads couldn’t feel like an interruption, certainly not a long
interruption. Schmidt’s joint teams came up with several novel
advertising schemes. Schmidt said he didn’t know if they’d work,
but “if any of them hit, it is a billion-dollar business. Of
course, it’s now zero.” To minimize insecurity at YouTube’s
headquarters in San Bruno, he dispatched Coach Campbell to visit
regularly and to calm the troops and help coax a monetization
plan.
There was another
potential cash cow to pursue. In 2007, Google began to aggressively
move to claim a slice of the mobile phone business, which then
counted three billion users worldwide—three times the PC market—a
number Schmidt expected to grow by another billion in four years.
The success of Apple’s revolutionary iPhone, with its easy access
to the Internet, was an eye-opener: the iPhone delivered fifty
times more search queries, Google found, than the typical so-called
smartphone. A mobile device was no longer just a telephone or a
PDA, and portable access to the Internet advanced Google’s
interests; the more people went online, the more Google
benefited.
But Google was
frustrated that many of its programs functioned poorly on mobile
phones. They were frustrated that telephone companies, not
consumers, decided which applications would appear on their mobile
phones. “As compared to the Internet model, where we’ve been able
to make software that basically is able to run everything and works
for people pretty well, it’s been very difficult to do that on
phones,” Page said. Google’s mobile quarterback was Andy Rubin. A
former Microsoft employee, Rubin had left to cofound a mobile
software company called Android, which Google had acquired in 2005.
As the senior director of mobile platforms for Google, Rubin set
out to make Android an open-source operating system—open to
improvements from any software designer because the source code was
visible, not proprietary, and peers could collaborate to offer and
improve different software applications. This was a direct assault
on the telephone companies, which policed what software
applications could be displayed for consumers.
Rubin likened the
current mobile market to what happened in the early eighties to
PCs. Original hardware makers, such as Wang or DEC, were supplanted
by IBM, which in turn was supplanted by the manufacturers of
clones. As the hardware became commoditized, the price of the PC
dropped. At the same time, the cost of the software rose, because a
single company, Microsoft, controlled it. “Unless there is a
vendor-independent software solution,” said Rubin, expressing the
ethos not just of Google but of the Valley culture at large, “the
consumer isn’t going to be well served. What I mean by
‘vendor-independent’ is you can’t have a single source. Microsoft
was a single source. What Android is doing is trying to avoid what
happened in the PC business, which was to create a monopoly.” That
is why, he said, Android is an open-source system that “no single
entity can own.” He is openly disdainful of phone companies like
Verizon and AT&T, though he doesn’t name them, and obviously
feels the same way about Apple’s closed iPhone system. “The thing I
carry around in my pocket every day,” he said, gripping his yet to
be released Android phone manufactured by T-Mobile, “is as powerful
as the PC was five years ago. So how can I take advantage of that
and make it do what I want it to? I’m the one who paid for it! Just
because I have a service plan with some whacky wireless carrier
doesn’t mean they get to dictate what I do with my product that I
paid for. Another thing: It shouldn’t cost four hundred dollars.
That’s absurd. If you add up all the components, somebody is making
a lot of money.”
For Google, Android
represented a perfect storm—its idealistic desire to promote an
open, more democratic system meshed with its business interests.
The more people who had access to the Internet, the more Google
searches or Google Maps would be used, and the more data collected.
And those using the Android operating system for mobile phones
might also use it for their laptops, allowing Google to charge for
this software or share in the mobile ad revenues.
There was another
issue to be addressed with mobile phones: spectrum space. All radio
frequencies—whether for cell phone calls, broadcast television or
radio signals, or other wireless devices—travel over spectrum space
that is assigned and regulated by the Federal Communications
Commission. Google lobbied to ensure that the new wireless space
would be open and not controlled by just a few telephone giants.
Ivan Seidenberg, the CEO of Verizon, disputed Google’s contention
that his was a closed system: “Since we think we have the most
reliable network, we’ll publish standards and let people connect to
any device they want to.” The FCC sided with Google, and in July
2007 ruled that the telephone companies could not control what
applications were used on this new spectrum. Soon after the FCC
announcement, Google raised the stakes by threatening to bid in the
January 2008 spectrum auction, establishing itself as a telephone
company.
Google had no
intention of providing telephone service or producing hardware for
a Google phone. They would not say this publicly, however, because
by fanning speculation—and the speculation was incendiary—they kept
people guessing and increased their leverage over the wireless
telephone companies. They also brought themselves closer to
achieving three objectives: to make Google programs, including such
new features as voice search, work on wireless devices; to reduce
the cost of mobile phone service and Internet connections by
allowing advertisers to subsidize them; and to extend to mobile
devices the company’s dominance in online advertising. Google
believes that ads on mobile devices could fetch premium prices.
With GPS positioning married to Google’s immense database, an
advertiser could know who purchased cashmere sweaters or golf clubs
and if a consumer was outside a store that had a special sale on,
an alert could appear on the mobile screen informing her. Because
this would be what advertisers and Google excitedly describe as “a
service” or “information” rather than a traditional ad, the hope
was that consumers wouldn’t be annoyed by these intrusions. In
November 2007, Google announced that it was working with
thirty-three corporate partners, including T-Mobile, Samsung,
Intel, and eBay, to launch Android as a free operating
system.
In the auction, few
companies could match the financial bids made by the giant
telephone companies. Google could, though, and to enter the mobile
phone business and ensure that Android would work seamlessly, they
needed to. But Google didn’t want to become a telephone company. So
it made a let‘s-hope-we-lose floor bid of $4.6 billion for a block
of wireless spectrum, conditioned on the FCC’s agreement to
guarantee that the winner of the auction open its hardware and
services to third parties.
Of course, Google’s
mobile phone ambitions would collide with powerful telephone
companies and with Nokia, the world’s number one mobile phone
manufacturer. They were allied in fear that their business model
was under assault. They worried that their dominance would be
diminished. Who would receive the advertising revenues? Who would
claim ownership of the valuable data generated? Would their own
hardware be cloned, like PCs? “Now that they want to dominate the
planet on phone calls,” Seidenberg said of Google, “they’ve
provoked the bear.”
Neither Seidenberg
nor representatives from AT&T or Nokia joined in Google’s
November announcement of the first truly open mobile operating
system. A traditional Google corporate ally, Steve Jobs, also did
not join because Apple’s iPhone provides a mobile operating system,
one less open than Google’s. This was a little clumsy, because half
of Apple’s eight directors serve as Google directors or advisers,
among them Eric Schmidt, Bill Campbell, and Al Gore. At Apple board
meetings, Schmidt told me he now recused himself from mobile phone
discussions.
In the auction, that
commenced in January, all bidders were instructed not to reveal
their bids. When it was over, Verizon and AT&T had won, paying
a total of $16.2 billion for two wide swatches of spectrum. In an
April “all hands” meeting with Google employees, either attending
or on a video hookup, Schmidt confessed, “We had the very good
fortune of entering the spectrum auction for $4.6 billion, and not
winning. We sweated it out!” Both Verizon and AT&T would pledge
to open their networks. AT&T announced that it would sell
phones with Google’s Android system, and Verizon announced that it
was open to consider any Android prototype. (By the summer of 2009,
Verizon had yet to submit an Android application; nor had any phone
company, save T-Mobile.) One former federal official was cynical
about what he called Google’s “fake bid.” He believed Google had a
sweetheart deal with Verizon, that the telephone company knew all
along Google would not make escalating bids and that all Google
really wanted was assurance that Verizon would open its system to
Android. He was dubious that Verizon’s system would be open for
anyone but Google.
BY THE SPRING OF
2008, Google was buoyant. Rejecting the one-trick pony charge,
Schmidt said that with mobile phones, plus search, plus its array
of software products, and YouTube, he explained why it was
conceivable that Google could become the first media company to
generate one hundred billion dollars in revenues. He described to
me “a planning process where we said, is it mathematically possible
for Google to become a hundred-billion-dollar corporation? And not
over any particular period of time, just, is it possible, are the
markets big enough?” He estimated the annual worldwide advertising
market as “somewhere between seven hundred billion and a trillion
dollars. Is it possible for Google to become ten percent of that?
And the answer is yes, over a long enough period of
time.”
How?
“First place, you’re
not going to get there with small little advertising deals. You
need these big initiatives ... the number one big one right in
front of us is television. Big market, well monetized, easily
automatable. Second one is ... mobile.” The third was “enterprise,”
by which he meant web-based services—“cloud computing”—offering
various software applications and IT services for corporate
customers, organizations, and individual consumers.
Brave words, but
throughout 2008 Schmidt’s company made no money from its mobile or
YouTube or cloud-computing efforts. Google did not let up. It was
still talking to cable companies, Schmidt said, about partnering to
target advertising for cable’s digital set-top boxes, and for
Android to become the operating system for cable mobile
phones—should cable decide to enter the thriving wireless market.
Google joined with cable companies, Intel, and wireless providers,
such as Sprint Nextel Corporation, to invest a total of $3.2
billion in WiMAX, a technology promising faster wireless
connections to the Internet than those offered by Verizon and
AT&T.
Jeffrey L. Bewkes,
the CEO of Time Warner, acknowledged his company’s discussions with
Google and laid out the reasons they had not yet been resolved and
might not be. On the one hand, he said, unabashedly, if the cable
companies could get together they would have “a Google-type ability
to do targeted digital advertising.” Google, he said, “has the
search data and the cookies through its searches. But the cable
companies not only have that, they have everything that you do on
your cable broadband connection, they’ve got everything you’ve
signed on and saw. And they have everything you watched on
television. And they’ve got their customer’s name and credit card
information.” On the other hand, he sighed, the cable companies
have a difficult time acting in concert, and the data is useful
only if they aggregate it. That’s where Google has the advantage.
It is willing to organize cable companies’ data, combine it with
its own, and extend it to all mobile devices. Which begs another
question, he said: Who owns the data, the cable company or Google?
And if the cable companies let Google in the door and grant them
access to its data, “you can never build an alternative because
Google’s will always be that much more efficient.”
Cloud computing was
another new Google initiative. Like other corporate giants with
massive data centers and servers—IBM, Amazon, Oracle—Google was
intent on launching its “cloud” of servers. The cloud would allow a
user to access data stored in the Google server from anywhere; it
would reduce corporate costs because companies could outsource
their data centers; and it would subvert more expensive boxed
software sold by Microsoft and spur the development of inexpensive
netbooks whose applications are stored in the cloud. Because all
these software applications can function on a browser, escaping the
dominance of Microsoft’s operating system, in the future, said
Christophe Bisciglia, the twenty-eight-year-old chief of cloud
computing, “The browser becomes the operating system. Applications
have outpaced browsers, which is why we did it”—introduced a Google
browser in 2008.
While cloud computing
offered consumers portability, it potentially offered them less
control. Just as a consumer loses access to the Internet every time
a broadband connection is down—for instance, when YouTube was
silenced for several hours on February 24, 2008, when the
government of Pakistan tried to block a YouTube video critical of
Islam and wound up shutting down the worldwide video service, or
when Gmail’s one hundred million users were disrupted for just over
three hours exactly one year later, on February 24, 2009, or when
Google search and Gmail went dark for an hour on May 14, 2009.
“We’re sometimes going to have problems,” Bisciglia admitted, “just
as we do when our hard drive crashes.”
And what is the
business plan?
“The more people on
the Internet, the more clicks our ads get,” Bisciglia
said.
While these
aggressive Google efforts resemble those of other corporations’
always angling to continually grow profits, they were also
reminders of the “Don’t be evil” idealism that animated the
company. In its annual letter to shareholders released on the last
day of 2007, Google announced it was entering the energy sector,
investing tens of millions of dollars in new technologies with the
goal of making renewable energy cheaper than coal-fired plants. “If
we are successful,” the founders declared, “we will not only help
the world, but also make substantial profits.” Their profits would
rise because the energy costs to operate Google’s data centers
would fall. They acknowledged that solar power is “more expensive,”
yet vow to use it to power a third of the Googleplex and to
subsidize it for seven years. Consistent with their fervor to spare
the environment, Page and Brin made personal investments in Tesla
Motors, a Valley company intent on producing an electric sports
car.
They established a
philanthropic arm, Google.org, and recruited an esteemed epidemiologist
and world health expert, Dr. Larry Brilliant, to run it. They
pledged to divert to this foundation one percent of Google’s
profits, with three goals: to ascertain the quality of water and
health care and other services country by country; to gather enough
information to try to predict and prevent catastrophes, whether
these be forces of nature or disease; and to make energy-renewable
investments. Page and Brin sound more like social workers than
hardheaded businessmen when they extol Google Earth as a vehicle to
spot imminent disasters and offer to make “a gift” of this
technology to disaster relief organizations. Google put up thirty
million dollars to fund the X Prize Foundation’s Google Lunar X
Prize, which would be awarded to the private team that designs the
best robotic rover to traverse the moon’s surface and send high
definition video images back to earth.
Google also launched
Google Health, an effort much like the one announced by Microsoft
and by AOL cofounder Steve Case’s Revolution Health Group LLC. Each
aimed to give citizens a safe place to store health records online
and share them with doctors, and search for the best medical advice
online. Google recruited Dr. Roni Zeiger, a primary care physician
who returned to Stanford for an advanced degree in medical
informatics, hoping to devise ways to democratize medical
information. He joined Google in January 2006, after a typically
rigorous interview. “They asked for my high school grades!” Zeiger
laughed. He was dead serious about his mission. “Google gets more
health questions than anyone on the planet,” he said. Zeiger
realized that “Google’s skills could help people organize their own
health information.” He vowed, “We’ll never sell anyone’s health
records.” And in a March 2008 speech, Eric Schmidt promised to keep
the site free of all advertising.
There is a shared,
and perhaps blinding, belief on the Google campus that Google was
altruistic, an attitude reflected in “Don’t be evil.” On a stage he
shared with Page at the Global Philanthropy Forum after Google
embraced the slogan, Brin declared that ‘“don’t be evil’ serves as
a reminder to our employees,” but it “was a mistake. It should
really say, ’Be Good.‘”
One can interpret
Brin’s remarks as a reflection of his idealism, or his naïveté—or
both. To simply say a corporation should be good ignores the range
of choices a company is compelled to make in conducting its
business. How “good” was Google when it complied with German laws
not to disseminate Nazi literature? Google’s searches were
following German law, which is good. It was censoring search
results, which is bad. When in 2008 Google closed its Phoenix
office and laid off a handful of employees because the company did
not believe the office was essential, it was being good to
shareholders. But those employees most certainly did not see
Google’s action as good.
BUT THE SPEED OF
GOOGLE’S ascent and its expansive commercial ambitions came to
overshadow its noble ambitions. Google grew up very fast. In their
first annual letter to shareholders, in 2004, Page and Brin wrote
of Google: “If it were a person, it would have started elementary
school late last summer, and today it would have just finished the
first grade.” Three years later, Search Engine
Land’s Danny Sullivan thought Google had prematurely entered
its awkward teenage years. “The story of Google today is perhaps
the adolescent period they are going through. How do they deal with
the challenges of the growth they are going through? You are going
to go through this wave of people leaving Google. They don’t need
to work there anymore. And it’s not going to be fun, which will
change the culture.”
“Google’s become a
big company,” said Paul Buchheit, who left Google in 2006 to start
Friendfeed.com. “It’s a very different environment.”
As with most big companies, he said “priorities become based more
on what looks good internally. You become distant from the users.
When you get bigger, some engineer comes up with this crazy
project, but he’s four or five layers from Larry. These layers in
between are going to serve up all sorts of weird barriers.” There’s
little incentive, he said, for individuals to innovate because the
bureaucracy becomes cautious, overwhelmed with a terror “not to
look dumb.” Asked for a more concrete example, the engineer who
distilled Google into a powerfully simple slogan retreats to this
sweeping analogy: “It’s an entire system. Think about the Soviet
Union. They had lots of brilliant people. But there was an economic
system there that encouraged certain kinds of behavior. They failed
to innovate because the system was wrong.” Buchheit’s critique is
echoed by Scott Heiferman, CEO and cofounder of the social network
site Meetup.com,
who has hired some former Googlers who left the company because it
got too big. “Google did not invent YouTube. They tried and failed
with Google Video. Google did not invent Facebook. They tried and
failed with Orkut.” Aside from search, Heiferman said, “Google has
actually failed at most things.”
Ask Google executives
to describe their biggest future concern, and more often than not
they say size. Growing too big and losing focus is Omid
Kordestani’s foremost worry. At Netscape, he said, the company
drifted away from founder Jim Clark’s vision of it as a company
whose browser enabled Internet communication. “Suddenly we became
more of an enterprise company than a Web company, even though we
started the browser.” When Netscape rushed too quickly to issue an
IPO in 1995, he said, pressure was on to generate more revenues, to
perform on a very public stage for the press, to “focus on quarter
to quarter” performance.
“For the last year my
biggest worry was scaling the business,” Schmidt said in May 2007.
“The problem is we’re growing so quickly. When you bring in people
so quickly there’s always the possibility you’ll lose the formula.
How do you manage engineering teams that are not on one campus? How
do you manage across time zones? How do you keep the
culture?”
IN ADDITION TO the
natural concerns with rapid growth, critics both inside and outside
Google believe the company has real management weaknesses. Paul
Buchheit believes Google has succumbed to the disease of bigness
that he says afflicts “every big company” and has become
bureaucratic. There are many bottlenecks at Google. A former Google
executive criticizes “micro management at the top,” and said a
prime example is that the founders and Schmidt, or their designees,
“have to sign off on each hire. That’s OK when you are hiring five
new employees.” In 2007 and early 2008, Google was hiring 150
people per week. Because most decisions about new employees, deals,
or policy “have to go to the top,” the process is slowed. Echoing a
common thought, an executive who is a Google corporate ally and
works closely with them said, “In many ways, it’s a very
disorganized company. It looks to me like they are caught in this
interesting conflict between a company that is overmanaged and
undermanaged. They have a control mechanism at the top that has
inordinate control. And at the same time, there is too much
freedom.” He lists two complaints: “You can’t get answers out of
Google when you want to schedule something,” so there are long
waits. And “they are structured to allow way too many people to
participate,” which results in endless meetings.
The founders get
diverted by issues that should not require their attention. Eric
Schmidt described a Monday management committee meeting in March
2008 during which they discussed how, under California labor laws,
a review was necessary to determine whether their many massage
therapists should become full-time employees. The significant plus
was that they would receive full benefits. The significant minus
was that tipping would be prohibited. The issue had first been
raised at the TGIF meeting the previous Friday. The founders,
massage regulars, were agitated. Schmidt, who said he has “never
had a massage at Google, and never will,” was impatient, and
blurted, “You guys are in charge of this.”
“‘We’re on it!’” they
said.
That afternoon, Page
and Brin scheduled another meeting to resolve the issue. “This is
where the team really works well,” Schmidt explained. “I knew what
I wanted, which was to get the hell out of the meeting! Larry and
Sergey knew they had to get involved in an employee issue.” The
founders resolved the issue by making them “variable part-time
employees” and allowing tipping to be continued as long as it was
reported. This incident can be viewed as an example of teamwork; it
can also be seen as an example of micromanagement.
The founders’ zeal
for efficiencies extends to the unusual way they manage their time.
They used to share three assistants. No longer. They share an
office on the second floor of Building 43 without secretaries or
assistants to guard the entrance, keep them on schedule, or answer
phones (which don’t ring anyway). A staircase whose banister is
festooned with a large green kite leads from their regular office
on the main level to a glassed loft where they work on desktop
computers with oversized screens, circled by unpacked cartons on
the floor, a large massage chair, and gym equipment so that Brin
can stretch his cranky back. A helmeted spacesuit with the name
Sergey Brin on a breast pouch is splayed on a hanging stand facing
the offices below. (Brin has applied and left a $5 million deposit
for one of the six seats on Space Adventures’ Soyuz spacecraft’s 2012 orbital trip.) Another
staircase allows them to slip out of the building and to the
parking lot where they daily leave their commuting vehicles,
including two Priuses, two $109,000 Tesla Roadster electric sports
cars from the company they’ve each invested in, and a couple of
bicycles.
Asked why they have
no assistants, Page gave a revealing answer. They do have an
assistant “from time to time,” he said, but “the amount of time it
takes me to actually schedule is not very high because of Google
Calendar. Occasionally, I have to go back and forth with somebody,
but usually they’ll meet when I want to meet anyway. It’s not like
I have to negotiate very much.” He laughed, gently. “I’m not sure
it would work for everybody, but for me it’s worked pretty well.
Also, it’s actually allowed me to have more time. People are
willing to ask an assistant: ‘Will Larry come and talk at this
thing?’ But if they actually have to e-mail me about it, they think
twice. It’s not that anybody in the company can’t e-mail me. It’s
that they realize they shouldn’t be using my time that way. So the
number of requests I’ve gotten has gone down, which is kind of
nice.”
What isn’t so nice
for Google executives is that they often don’t know where the
founders are, or if they will attend meetings. Page and Brin resist
being tied to someone else’s schedule. With no assistant to
contact, the way executives learn if one or both founders will
attend a meeting is if they see that Page or Brin has placed the
meeting on his online Google Calendar, which senior Google
executives share. Sometimes, Schmidt said, the founders show up
unscheduled for the wrong meetings. Sometimes they disappear—Larry
suddenly to tour a cafeteria to make sure it seats no more than one
hundred and fifty, which he insists is the maximum size to inspire
a team culture; Sergey or Larry to disappear from the office (if
the wind has picked up) to pursue their kite-surfing hobby, which
relies on a small surfboard and wind to propel the kite and skim
across the water.
Schmidt defends
management chaos, or at least a degree of it, as a style that fits
the founders, and he offered an illustration. For months he tried
to get the founders to craft a corporate strategy memo for the
future, believing their “brilliance” produces unique insights. He
couldn’t pin them down. Finally, on a business trip to Seville, he
opened his e-mail and up popped a draft from Brin. “Perfect,” he
thought, and shared it with Page, who was on the trip. Page made
his edits, then Schmidt did some edits and circulated the draft to
Google’s management with a “What’s missing?” note. “Why couldn’t I
get them to write this in a normal way?” Schmidt asked. “That’s not
the way their minds work. Their ideas are much better than mine. I
can’t write the memo, and in that you see why they are the
founders.”
Whatever their
brilliance, each member of the troika running Google has the same
liability, said an industry insider who knows them well. “None is
an inspirational leader, a great salesman, or a great speaker.”
Their brilliance and success move people, but not their words or
the symbols they evoke. They are not Steve Jobs, not gifted
salesmen or evangelical leaders.
Page and Brin differ
from Jobs in another significant way. Al Gore, who has had a
ringside seat at the management of both Apple and Google, said that
he deeply admires the founders of each company, but “a genius like
Steve comes along only once in several generations.” Jobs has
demonstrated his genius over a longer period of time than Page and
Brin, he believes, and also has benefited from something the Google
founders lack: “Steve has the great if painful experience of
failing, and coming back.” The wisdom that comes from failure has
not yet punched Page and Brin.
It was time in the
spring of 2008 for executives to make tough choices among the 150
products Google produced. Why 150 products? “That can be stated as
criticism, but it can also be stated as strategy,” Schmidt
responded. “The goal of the company is customer satisfaction. You
should think of Google as one product”: customer satisfaction. This
response summons memories of Yahoo’s famous Peanut Butter
Manifesto. Composed in November 2006 as an internal memo by Yahoo
senior vice president Brad Garlinghouse, it was leaked and caused a
stir in the Valley. Garlinghouse wrote:
We lack a focused, cohesive vision for our company. We want to do everything and be everything—to everyone.... I’ve heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular.
Search gives Google
more of a focus than a self-proclaimed “media company” like Yahoo
might have. Yet a departed Google executive, who like many who
voice criticism of Google’s management chooses to do so
anonymously, said, “Google could do fewer products and make less
investments. They are doing too many products and peanut buttering
everything.”
Why?
“They’ve never had to
make hard choices,” answered the former executive. “The company is
so successful that it can do anything. They think they can make
energy. Why? They have passion. That’s what makes Google great. The
question is when things get hard, can they make tough
decisions?”
The CEO of an old
media company described a visit he and his COO made to Google a few
years ago. They were doing what Mel Karmazin had done: take a tour
of Google and have a meal with the founders and Schmidt. As an
executive led them around, they paused to look at the gallery of
photographs of the projects Google had launched. The Google
executive explained the 20 percent time each engineer was given.
The COO asked, “Has there ever been a project started where someone
said, ‘OK, it’s not what we thought it was. We should get rid of
it.’?”
“I don’t think so,”
answered their tour guide.
When I pressed a
longtime Google executive to recall the products the company had
canceled, he came up with just two: Google Answers and Google
Catalog Search. “This is a company that doesn’t set priorities,”
said another former Google executive. Part of the reason, this
person said, traces to the founders. “It’s the Talmud of the
founders. The word of God. And everyone interprets the word of God
at Google.”
It’s very hard not to
defer to founders who have been right so often. But here’s where
Schmidt is criticized for not imposing his will. One reason, said a
former Google executive, is because “He hates confrontation.” A
second reason, said another former manager, is because “Eric runs
the company—unless there’s someting Larry really cares about.
Anything Larry cares about, he runs. Like products.” Brin is said
to assert himself on fewer things, but on advertising and privacy
policies, business deals, or “Google’s approach to China, Sergey
rules.” The prominent CEO of one company that does business with
Google said he found Schmidt “odd, as if he’s holding something
back. In the guise of someone who is straight—a sincere, decent,
thoughtful, kind man—he is something different than all of those
qualities. In his business dealings people will tell you that if he
said, ‘OK, I agree to this,’ you will find that he actually hasn’t
done so. If you confront him, he said he couldn’t. Or he forgot. Or
he gives you gobbledegook.”
Why? “He is not the
decider,” the CEO answered. “Yet in certain areas he pretends that
he is. Eric is smoothly duplicitous.”
Silicon Valley
venture capitalist Roger McNamee of Elevation Partners calls
“Google the most impressive company I’ve ever seen.” Yet in
mid-2008 he also said, “I am very disappointed in Eric Schmidt. He
got off to a great start because he was wise enough to leave a
crazy culture alone. The Google culture has become a
monster.”
Even Coach Campbell,
who has no direct managerial responsibilities, is not immune from
criticism. “He’s more a crutch than a coach,” said a former Google
executive, who believes Campbell compliments too much and
challenges too little. A senior Google executive observes that
until late 2008, Google never had an internal budget that
apportioned capital, made choices about what resources to allocate;
instead, it projected expenditures and revenues month by month. He
blames the CEO for this, but also asked of the experienced coach,
“Where was Bill?” He said Campbell spends too much time dispensing
hugs. “I find him all hat and no cattle.”
MARC ANDREESSEN was
of two minds about Google. On the one hand, he believed, “Google is
in a great position,” particularly with YouTube, which he thought
will find a way to monetize. On the other hand, he cautioned
against Google’s “trying to do everything. You saw their energy
initiative! History suggests that people have circles of competence
and when you go outside the circle, they fail.”
Columbia’s Tim Wu
concurs. “Google is a precocious company. Great grades. Perfect
IPO. A typical high school standout,” he observed. “The basic
problem is whether they remain true to their founding philosophy. I
don’t just mean ‘Don’t be evil.” Will they stay focused on search,
on “their founding philosophy, which is really an engineers’
aesthetic of getting you to what you want as fast as you can and
then getting out of the way?” Or will Google become “a source of
content, a platform, a destination that seeks to keep people in a
walled Google garden? I predict that Google will wind up at war
with itself.”
Brin rejects this
analysis, but when asked what his biggest worry was, he answered
simply, “I worry about complexity. I admire Steve Jobs. He has been
able to keep his products simple.”
Advertising pressures
may add to Google’s complexity, for there is a built-in tension
between the interests of users and of advertisers. Recall the
aversion the founders once had to banner ads because, they said,
“they don’t give the user the best experience.” And now Google
heralds its purchase of DoubleClick as a means to get into the
banner advertising business it once shunned. Because Google now
admits to being in the advertising business, which produces almost
all its revenues, they will have to answer this question: Is
Google’s customer the advertiser or the user?
“I don’t think I’m
worried about that changing at Google,” Brin said. He would not
make the same argument for others. “I see other Web sites making
trade-offs that I wouldn‘t,” including allowing “pop-ups and pop
unders,” or online publications that allow “eight columns of ads on
the side and one teensy article.”
But with such a
wealth of data at Google’s disposal, their advertising customers
will want more. And if Google’s growth sputters, pressure to
satisfy advertisers will intensify. Richard Sarnoff, now the
president of Digital Media Investments at Bertelsmann AG, whose
great-uncle was David Sarnoff, the founder of NBC radio and
television, likens these potential advertising pressures on Google
to those faced by his great-uncle. “He had a vision of what radio
and television could be in terms of being informational,
educational, cultural, relevant. He said, ‘OK, we’ve got radio.
Let’s put Tchaikovsky on!’ ... The reason the broadcast media
didn’t end up being this public trust type of programming but
became primarily—let’s call it lower-culture entertainment
programming—is that radio and television was just so good at
delivering audiences to advertisers. Business being what it is,
whatever you’re good at, you concentrate on, you maximize, and that
ends up delivering value to your shareholders. Google, like NBC in
those early days, finds itself being a phenomenally effective way
of delivering consumers to advertisers. The question is: To what
extent is that going to change the very lofty principles that the
company was originally founded on and that made them effective in
the first place? Google is at that kind of crossroads.” Advertising
pressures on Google will build. “What I have seen is that their
very success has allowed them to resist such pressure—so
far.”
All of these
concerns, not to mention the luxury of being rich, contributed to
the exodus of Google employees. George Reyes, the company’s
long-serving CFO, with nearly three hundred million dollars in
company stock, decided to retire at age fifty-three. Seeking to get
on the ground floor of a hot new digital company, a number of other
Googlers left, including executive chef Josef Desimone. Many who
left did so out of frustration. The most prominent of them was
Sheryl Sandberg.
Frustrated by what
friends say was sometimes chaotic management at Google, and wanting
broader responsibilities to address these, Sandberg left in March
2008 to accept the title of chief operating officer at Facebook.
Venture capitalist Roger McNamee, an investor in Facebook and a
close friend of Sandberg‘s, introduced her to founder Mark
Zuckerberg. “Sheryl created AdWords,” he said. “The idea had many
parents, but the execution was hers.” Her title, vice president,
global online sales and operations, did not reflect her importance,
he said. And he believed she was junior to some “tired executives.”
In the effort to keep her, Google offered her the CFO job, which
she declined. “She wanted to be a COO,” said Schmidt. “Sheryl is a
terrific executive. But we don’t want a COO.”
By the time Sandberg
stepped down, her Google team had grown to four thousand employees,
with AdWords and AdSense then yielding 98 percent of the company’s
revenues. “Sheryl is a person who balances the left brain and the
right brain. All of us could learn from her,” said her close friend
Elliot Schrage, who lost an ally in his ongoing efforts to persuade
the engineers to think more broadly. Schrage soon followed
Sandberg, accepting a position at Facebook similar at first to the
one he’d held at Google. (Months later, he was also put in charge
of overseeing Facebook’s relations with outside
developers.)
Sandberg’s departure
was jarring. Her move drew attention to Facebook, the new rocket,
and highlighted the strained adolescence of Google. It brought some
sadness as well, for Sandberg was popular, and not just among
Googlers. When media executives like Donald Graham, CEO of the
Washington Post Company, or Arthur Sulzberger, Jr., of the New York
Times Company visited Google, they often separately went to her
home in Atherton for cocktails or dinner with Sandberg and her
husband, David Goldberg. Before she left Google, Graham tried to
hire her for a senior position at his company. She was the friendly
face at Google that some traditional media company executives
trusted enough to let their hair down and ask: How can Google help
my troubled business?
Google executives
were stumped as to why Sandberg would take the job at Facebook. She
wasn’t given the same broad responsibilities as most COOs: vital
parts of Facebook—product management and development, engineering,
and finance—would continue to report to founder Mark Zuckerberg.
And they didn’t understand why she would leave for a company that,
according to one Facebook insider, had generated only $150 million
in revenues in 2007 and was bleeding money.
Google was already
anxious about Facebook, and Sandberg’s defection elevated their
discomfort. True, Facebook wasn’t making money, but neither had
Google in its first four years. Facebook had 123 million unique
visitors in May 2008, according to comScore, a 162 percent increase
over the previous May. For the first time, Facebook had passed its
rival, MySpace. Also making Google anxious was Facebook’s alliance
with Microsoft, which owns 1.5 percent of the social network site
and sells its advertising. Microsoft was coming after Google,
aggressively allying with traditional media companies—agreeing, for
instance, to sell online advertising for Viacom, to license and
display its television and movie products on its MSN and Xbox 360
platforms, and expending half a billion dollars to advertise on
Viacom platforms.
Google and Facebook
were not yet joined in battle, observed Marc Andreessen, who joined
the Facebook board in the summer of 2008, but they were engaged “in
a little shadow boxing.” Mindful of his experience at Netscape, he
said he believed that Google and Microsoft had already fallen into
the trap of becoming obsessed with what each was doing. Of Facebook
and Google, he said, “It would be a mistake for either company to
rush to compete too quickly. The danger there is that you orient
your strategy to what others are doing. Then the press wants to
write a conflict story: Google versus Facebook.”
ALTHOUGH ITS
FINANCIAL PERFORMANCE was sterling, the first quarter of 2008 was
the winter of Google’s discontent. The company was becoming more
defensive. It was under attack for its privacy and China policies,
for its growing dominance in search, for its perceived threat to
copyright owners, for its disruption of such traditional businesses
as advertising, for its efforts to muscle into the mobile telephone
business. The government was peering over its shoulder. Like other
giant corporations, Google’s power, and sometimes its behavior,
threatens to sabotage its trusted brand. A Microsoft executive,
clearly enjoying the rain of criticism falling on Google, candidly
observed, “People dislike Google for the same reason they disliked
us: arrogance.” A major difference between the two is that while
Microsoft’s dominant operating system was difficult to avoid,
people can escape Google with a single click of a
mouse.
Microsoft’s
engineering culture, like Google‘s, had missed the warning signals
that its actions had aroused the government bear. And Microsoft,
like Google, truly believed it was advancing the public good.
Microsoft’s Internet Explorer was, after all, given away for free.
A single dominant operating system meant that PCs could more easily
communicate with one another, as Microsoft liked to say. Both
companies were capable of being blinded by righteousness—the flip
side of hubris. Unlike Microsoft, Google was managed more
chaotically.
The smart question
asked of Google was the one Adam Lashinsky of Fortune posed in
early 2007: “Is Google’s culture great because its stock is doing
well, or is its stock doing well because its culture is
great?”
WHAT WASN’T AT
QUESTION was Google’s success. Measuring it by growth, profits, and
market valuation, it’s difficult to claim that Google’s management
has not worked. And a reason it has worked, so far at least, is
that it is, in the words of Google director Ram Shriram,
“controlled chaos—meaning that there is some method to the madness.
If you have too much structure, you have less innovation.” Instead
of describing Google management as chaotic, Brin said, “I’d prefer
‘less structured.”’ He cited Google’s youth as a partial
explanation: “We’re only in this business ten years.”
Former vice president
Al Gore recounted a private conversation he had with Brin and Page
several years ago in the boardroom near their office. Gore worried
aloud whether Google was maintaining its focus on potential new
search threats and continuing to prosecute its technological lead
in search. “They had to go to another meeting,” Gore recalled, “and
said, ‘If you can stay, Al, we’d like to bring in the engineers and
scientists in charge of this part of the business.’ Ten of them
came into the boardroom. Larry and Sergey left. I spent another
three hours. And then when it was over, I gave Larry and Sergey an
oral report.”
Four weeks later,
Gore said, laughing, “I went up to their office and found that all
ten of these people had been moved in. All ten of them!” He
described how Page and Brin had to cram twelve computer monitors
into the glassed two-story office, and “move around some of their
toys—a remote control helicopter, flying messenger boards, whatever
the latest new supercool toy is.” These ten people stayed—“until
they satisfied themselves that they had an ongoing system for
maintaining hypervigilance in the organization on the continuing
innovation necessary to make sure they were always at the cutting
edge of the highest quality search experience available on the
Internet.... I defy you to think of any other executives in the
world who would have a team like that into their personal office
for weeks on end.”
Gore may have been a
prod, but the execution of innovation at Google is due to the
focused passion Brin and Page bring to Google. Barry Diller, who
had that unsettling session with Page and Brin in the early days of
Google, when Page would not look up from his PDA to talk to him,
now thinks what might be construed as rudeness was really focus.
“They had their own method of communicating and processing,” Diller
said. “They give much less quarter than other people do to common
business courtesies. They’ve stayed true to this. It’s a
spectacular strength. It means you never get defocused by the
crowd.” At Google the focus is on the engineer is king culture Brin
and Page had the precocity to impose.
True to its
open-sourced, wisdom-of-the-crowd ideals, Google has created a
networked management. It is bottom-up as well as top-down
management, and it unleashes ideas and effort. “There is a pattern
in companies,” Page explained, “even in technological companies,
that the people who do the work—the engineers, the programmers, the
foot soldiers, if you will—typically get rolled over by the
management. Typically, the management isn’t very technical. I think
that’s a very bad thing. If you’re a programmer or an engineer or
computer scientist and you have someone tell you what to do who is
really not very good at what you do, they tell you the wrong
things. And you sort of end up building the wrong things; you end
up kind of demoralized. You want to have a culture where the people
who are doing the work, the scientists and the engineers, are
empowered. And that they are managed by people who deeply
understand what they are doing. That’s not typically the
case.”