Google

 

Google Inc.
Type	Public (NASDAQ: GOOG), (LSE: GGEA)
Founded	Menlo Park, California (September 7 1998[1])
Headquarters	Mountain View, California, USA
Key people	Eric E. Schmidt, CEO/Director Sergey Brin, Co-Founder, Technology President Larry E. Page, Co-Founder, Products President George Reyes, CFO
Industry	Internet, Computer software
Products	See list of Google products
Revenue	10.604 Billion USD (2006)[2]
Net income	3.077 Billion USD (2006)[2]
Employees	15,916 (October 18 2007)
Slogan	Don't Be Evil
Website	www.google.com

Google Inc. (NASDAQ: GOOG and LSE: GGEA) is an American public corporation, specializing in Internet search and online advertising. The company is based in Mountain View, California, and has 15,916 full-time employees (as of October 18 2007).^[3] Google's mission statement is, "to organize the world's information and make it universally accessible and useful."^[4] Google's corporate philosophy includes statements such as "Don't be evil", and "Work should be challenging and the challenge should be fun", illustrating a somewhat relaxed corporate culture.

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 September 7, 1998. Google's initial public offering took place on August 19, 2004, raising $1.67 billion, making it worth $23 billion. Through a series of new product developments, acquisitions and partnerships, the company has expanded its initial search and advertising business into other areas, including web-based email, online mapping, office productivity, and video sharing, among others.

History

Main article: History of Google

Google began as a research project in January 1996 by Larry Page and Sergey Brin, two Ph.D. students at Stanford University, California.^[5] They hypothesized that a search engine that analyzed the relationships between websites would produce better results than existing techniques, which ranked results according to the number of times the search term appeared on a page.^[6] Their search engine was originally nicknamed "BackRub" because the system checked backlinks to estimate a site's importance.^[7] A small search engine called Rankdex was already exploring a similar strategy.^[8] 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 September 15, 1997,^[9] and the company was incorporated as Google Inc. on September 7, 1998 at a friend's garage in Menlo Park, California. The total initial investment raised for the new company eventually amounted to almost $1.1 million, including a $100,000 check by Andy Bechtolsheim, one of the founders of Sun Microsystems.^[10]

In March 1998, the company moved into offices in Palo Alto, home to several other noted Silicon Valley technology startups.^[11] 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.^[12] The company has remained at this location ever since, and the complex has since become known as the Googleplex (a play on the word googolplex, a 1 followed by a googol zeros). In 2006, Google bought the property from SGI for $319 million.^[13]

The Google search engine attracted a loyal following among the growing number of Internet users, who liked its simple design and usability.^[14] In 2000, Google began selling advertisements associated with search keywords.^[5] The ads were text-based to maintain an uncluttered page design and to maximize page loading speed.^[5] Keywords were sold based on a combination of price bid and clickthroughs, with bidding starting at $.05 per click.^[5] 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).^[15][16][17] While many of its dot-com rivals failed in the new Internet marketplace, Google quietly rose in stature while generating revenue.^[5]

The name "Google" originated from a misspelling of "googol,"^[18][19] 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."^[20][21]

A patent describing part of Google's ranking mechanism (PageRank) was granted on September 4, 2001.^[22] 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 the form of a USD100,000 contribution from Andy Bechtolsheim, co-founder of Sun Microsystems, given to a corporation which did not yet exist.^[23] 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 and Sequoia Capital.^[23]

Google's initial public offering took place on August 19, 2004. 19,605,052 shares were offered at a price of $85 per share.^[24] Of that, 14,142,135 (another mathematical reference as √2 ≈ 1.4142135) were floated by Google and 5,462,917 by selling stockholders. The sale raised $1.67 billion, and gave Google a market capitalization of more than $23 billion.^[25] The vast majority of Google's 271 million shares remained under Google's control. Many of Google's 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 August 9, 2004, ten days before the IPO.^[26]

Google's post-IPO stock performance has been very good as well, with shares surging to $500 by 2007, due to strong sales and earnings in the advertising market, as well as the release of new features like the desktop search function and personalized home page.^[27] The surge in stock price is fueled primarily by individual investors, as opposed to large institutional investors and mutual funds.^[27]

The company is listed on the NASDAQ stock exchange under the ticker symbol GOOG.

Growth

While the company's primary market is in the web content arena, Google has begun to experiment with other markets, such as radio and print publications. On January 17, 2006, Google announced that it had purchased the radio advertising company dMarc, which provides an automated system that allows companies to advertise on the radio.^[28] 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.^[29] They have been filling unsold space in the newspaper that would have normally been used for in-house advertisements.

Google was added to the S&P 500 index on March 30, 2006. Google replaced Burlington Resources, a major oil producer based in Houston which was acquired by ConocoPhillips.

Philanthropy

In 2004, Google formed a non-profit philanthropic wing, Google.org, giving it a starting fund of $1 billion.^[30] The express mission of the organization is to help with the issues of climate change (see also global warming), global public health, and global poverty. Among its first projects is to develop a viable plug-in hybrid electric vehicle that can attain 100 mpg. The current director is Dr. Larry Brilliant.^[31]

Acquisitions

See also: List of Google acquisitions

Since 2001, Google has acquired several small start-up companies, often consisting of innovative teams and products. One of the earlier companies that Google bought was Pyra Labs. They were the creators of Blogger, a weblog publishing platform, first launched in 1999. This acquisition led to many premium features becoming free. Pyra Labs was originally formed by Evan Williams, yet he left Google in 2004. In early 2006, Google acquired Upstartle, a company responsible for the online word processor, Writely. The technology in this product was used by Google to eventually create Google Docs & Spreadsheets.

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 April 6, 2006 and outlined many of the service's known issues.^[32]

In late 2006, Google bought online video site YouTube for $1.65 billion in stock.^[33] Shortly after, on October 31, 2006, Google announced that it had also acquired JotSpot, a developer of wiki technology for collaborative Web sites.^[34]

On April 13, 2007, Google reached an agreement to acquire DoubleClick. Google agreed to buy the company for $3.1 billion.^[35]

On July 9, 2007, Google announced that it had signed a definitive agreement to acquire enterprise messaging security and compliance company Postini.^[36]

Partnerships

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  square feet ( m²) of offices and work on research projects involving large-scale data management, nanotechnology, distributed computing, and the entrepreneurial space industry.^[37] Google also entered into a partnership with Sun Microsystems in October to help share and distribute each other's technologies.^[38] The company entered into a partnership with Time Warner's AOL,^[39] to enhance each other's video search services.

Also in 2005, 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, Ericcson, and others.^[40] In September of 2007, Google launched, "Adsense for Mobile", a service to its publishing partners providing the ability to monetize their mobile websites through the targeted placement of mobile text ads,^[41] 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."^[42]

In 2006, Google and News Corp.'s Fox Interactive Media entered into a $900 million agreement to provide search and advertising on the popular social networking site, MySpace.^[43]

Products

Main article: List of Google products

Google has created services and tools for the general public and business environment alike; including Web applications, advertising networks and solutions for businesses.

Advertising

Most of Google's revenue is derived from advertising programs. For the 2006 fiscal year, the company reported $10.492 billion in total advertising revenues and only $112 million in licensing and other revenues.^[44] 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.

Applications

Google is well-known for its web search service, which is a major factor of the company's success. As of December 2006, Google is the most used search engine on the web with a 50.8% market share, ahead of Yahoo! (23.6%) and Live Search (8.4%).^[45] Google indexes billions of Web pages, so that users can search for the information they desire, through the use of keywords and operators. 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 email service, known as Gmail.^[46] Gmail features spam-filtering technology and the capability to use Google technology to search email. The service generates revenue by displaying advertisements from the AdWords service that are tailored to the content of the email 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.^[47] In August 2007, Google announced that it would shut down its video rental and sale program and offer refunds and Google Checkout credits to consumers who had purchased videos to own.

Google has also developed several desktop applications, including 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. Specifically, some countries and militaries contend 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 (NASA and the National Geospatial-Intelligence Agency, for example.) Some counter this argument by stating that Google Earth makes it easier to access and research the images.

Many other products are available through Google Labs, which is a collection of incomplete applications that are still being tested for use by the general public.

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.^[48][49] Also, a similar page was launched for American college students, under the name College Life, Powered by Google.^[50]

In 2007, some reports surfaced that Google was planning the release of its own mobile phone, possibly a competitor to Apple's iPhone.^[51][52][53] The project may be a collaboration between Google and Orange, HTC, Samsung, or another manufacturer. However, very little is known about the project and most of the information available is speculation. In October 2007, Google SMS service is launched in India allowing users to get business listings, movie showtimes and information by sending an SMS message.^[54]

Enterprise products

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 USD50 per user per year. A large implementation of Google Apps with 38,000 users is at Lakehead University in Thunder Bay, Ontario, Canada.^[55]

Platform

Main article: Google platform

Google's services are run on several server farms, each consisting of thousands of low-cost commodity computers running stripped-down versions of Linux. While the company does not provide detailed information about its hardware, a 2006 estimate consisted of over 450,000 servers, racked up in clusters located in data centers around the world.^[56]

Corporate affairs and culture

Google is particularly known for its relaxed corporate culture, reminiscent of the Dot-com boom. In January 2007, it was cited by Fortune Magazine as the #1 (of 100) best company to work for.^[57] Google's corporate philosophy is based on many casual principles including, "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." A complete list of corporate fundamentals is available on Google's website.^[58] Google's relaxed corporate culture can also be seen externally through their holiday variations of the Google logo.

Google has been criticized for having salaries below industry standards^[59]. For example, some system administrators earn no more than $35,000 per year – considered to be quite low for the Bay Area job market.^[60] 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.^[61] Google implemented other employee incentives in 2005, such as the Google Founders' Award, in addition to offering higher salaries to new employees. Google's workplace amenities, culture, global popularity, and strong brand recognition have also attracted potential applicants.

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 $1.00.^[62] 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."^[62] Prior to 2004, Schmidt was making $250,000 per year, and Page and Brin each earned a salary of $150,000.^[62]

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 $18.5 billion each.^[63]

Googleplex

Main article: Googleplex

As a play on Google's name, its headquarters, in Mountain View, California, is referred to as "the Googleplex" — 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 cereals, gummy bears, toffee, licorice, cashews, yogurt, carrots, fresh fruit, and dozens of different drinks including fresh juice, soda, and make your own cappuccino.^{[citation needed]}

In 2006, Google moved into  square feet ( m²) of office space in New York City, at 111 Eighth Ave. in Manhattan.^[64] 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.^[64] 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.^[64] It is estimated that the building costs Google $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.^[64]

The size of Google's search system is presently unknown; the best estimates place the total number of the companies servers at 450,000, spread over twenty five locations throughout the world, including major operations centers in Ireland and Atlanta, Georgia. Google is also in the process of constructing a major operations center in The Dalles, Oregon, on the banks of the Columbia River. 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, left over from the dot com boom of the late 1990s. The computing center is estimated to be as large as 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.^[65]

Google is also making 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.^[66] 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.^[66] In June 2007, Google announced that they plan to become carbon neutral by 2008, which includes investing in energy efficiency, renewable energy sources, and purchasing carbon offsets, such as investing in projects like capturing and burning methane from animal waste at Mexican and Brazilian farms.^[67]

"Twenty percent" time

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.^[68] 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.^[69]

Easter eggs and April Fool's Day jokes

Main article: Google's hoaxes

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.^[70] In 2002, they claimed that pigeons were the secret behind their growing search engine.^[71] In 2004, they featured Google Lunar (which claimed to feature jobs on the moon),^[72] and in 2005, a fictitious brain-boosting drink, termed Google Gulp was announced.^[73] In 2006, they came up with Google Romance, a hypothetical online dating service.^[74] In 2007, Google announced two joke products. The first was a free wireless Internet service called TiSP (Toilet Internet Service Provider) ^[75] 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.^[75] 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.^[76]

Some thought the announcement of Gmail in 2004 around April Fool's Day (as well as the doubling of Gmail's storage space to two gigabytes in 2005) was a joke, although both of these turned out to be genuine announcements. In 2005, a comedic graph depicting Google's goal of "infinity plus one" GB of storage was featured on the Gmail homepage.

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.^[77] 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.^[78] 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 various birthdays of notable individuals.^[79]

IPO and culture

Many people speculated that Google's IPO would inevitably lead to changes in the company's culture,^[80] 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.^[81] 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."^[82]

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^[83][84][85] 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, a lack of hierarchy, a collaborative environment.^[86]

Criticism

Main article: Criticism of Google

As it has grown, Google has found itself the focus of several controversies related to its business practices and services. For example, Google Book Search's effort to digitize millions of books and make the full text searchable has led to copyright disputes with the Authors Guild. Another trademark concern is about Google's Gmail in the UK and several other countries. Now, in those parts of the world, it is known as Google Mail. Google's cooperation with the governments of China, and to a lesser extent France and Germany (regarding Holocaust denial) to filter search results in accordance to regional laws and regulations has led to claims of censorship. Google's persistent