ONE COMPANY’S AUDACIOUS PLAN TO ORGANIZE EVERYTHING WE KNOW
Drawing on extensive interviews with top management, employee meetings, and open access to the famed Googleplex, the author Randall Stross, outlines Google’s brief history. The author also runs through how Sergey Brin, Larry Page and Eric Schmidt battle competitors and struggle to emerge victorious in their quest to index all the information in the world.
Tech lovers will consume the pages of discussion about the Algorithm, an Algorithm that is pliable and subject to change. Those interested in business will be intrigued by how companies like Yahoo and Microsoft underestimated Google’s technology, advertising model, and ability to solve problems as it tries to organize the world’s information. General readers will likely be fascinated by the sheer scale and scope of Google’s progress in just a decade. The author mentions Brin, Page and CEO Schmidt battle competitors and struggle to emerge victorious in their quest to index all the information in the world.
Some of the highlights from the book:
Google places ads on the right side of the page. These ads are unobtrusive and out of the way. They are not annoying. No gimmicks, just sits there on the right side of the page. If you are interested, you have the option to click on it. Otherwise, you go about your business.
Early on in the company’s development, neither Larry Page nor Sergey Brin, the company’s co-founders predicted that unobtrusive ads would form a foundation for their business. In addition, they generally did not use text ads. At first, they used pop-ups, flashing banners and other mutating forms of ads.
GOOGLE’S NEWEST BUSINESS MODEL
Google has taken aim at Microsoft’s core business, offering free email and software from free e-mail, word processing, spreadsheet & calendar software – this is referred to as “Cloud Computing.” Much of this data will not be stored locally but will be stored on Google’s massive servers; having a million or more computers that amounts to the world’s largest supercomputer.
Google’s many services produce assets that no other Internet company can match. It provides so many kinds of information under one brand, which is hard to calculate precisely the value it provides. However, the many services appeals too many users because of the Google brand. People who visit one site or stay with a service may use another of their service because of the convenience and acquaintance factor of the provider. In addition, strengthening of the Google brand strengthens the association between web searches and Google.
So even when other search engines improve, the Google brand may be strengthened. In other words, as Google provides more services, the more well known it becomes and the more dependant users are on its services, the more information can be added to their comprehensive collection of data.
GOOGLE VERSUS MICROSOFT NETWORK
As Google continued to grow, Microsoft tried to promote their own search engine, MSN. Microsoft even encouraged their employees to use MSN’s search engine; and if they were to click on any ads, it would be MSN’s ads rather than Google’s ads. Send Microsoft the money instead of Google. Many Microsoft employees were upset with this. They felt as a consumer, they had the free will to exercise their right to dispense my money as they see fit. If you want your employees to use your search engine, you need to build a better product.
Because of Microsoft’s limited success in competing with Google’s search engine, Microsoft feels their partnership with Yahoo would help them to compete with Google.
INTRODUCING KNOLS IN 2007
In 2007, Knols were introduced by Google. Knols could be defined as units of knowledge. When Wikipedia became more popular late last decade, it posed a potential problem for Google. A potential loss of revenue when users would spend a significant amount of time on Wikipedia. You see, Wikipedia appeared as the 1st or 2nd result in the top 10 results 88% of the time. When a user is doing research or trying to get their question answered, often they would see Wikipedia and click on it. Of course, there are no ads so a potential loss of revenue. The longer you spend here, the less of a chance you’d spend on a commercial site with the possibility of clicking on the sponsored links. Although there was some speculation that Google might try to mitigate this loss by leveraging Knols, they decided to leave that alone. They would allow exclusivity and an open policy. This decision was considered to be somewhat of an exception.
SOMETIMES, IF GOOGLE CAN’T INNOVATE, THEY SPEND MONEY TO GET IN OTHER MARKETS
Obviously, Google tries to innovate whenever possible but if it fails to develop in a market where they want to play, it will spend significant amount of money to gain the new markets it desires. For example, purchasing YouTube in 2006 for 1.65 billion and Double Click (placing banners on web sites) for 3.1 billion in 2008.
The quality of the engineering team, not the quantity of the personnel, best explains why Google’s algorithm was able to produce better search results even as a small company.
1. The Algorithm is setup to scale well. The more data that it crunches, the better the results.
2. Sophisticated advertising algorithm. Google used an auction mechanism to allow sponsors to bit-setting the top amount they would be willing to pay for every click. But a twist, an algorithm analyzed a sponsor’s history to determine the likelihood that a particular ad would attract clicks, it gave the best positions not necessarily to the highest bidder but to the sponsors that statistically had the most likely chance of producing the most revenue for Google. Considering the expected amount of clicks as well as the amount paid per click.
At the end of the book, the author poses a few key questions:
• Will Google be the prime beneficiary of the shift to cloud computing?
• Will Google’s cloud computing be popularly embraced, as users enjoy the service, or will it be rejected as fears of the misused of personal information becomes of greater concern?
• Will it continue to be viewed in the future as a smaller, anti-corporate image as it continues to grow?