Google has become such a massive, dominating company in the field of web search that it has entered the cultural lexicon as the de facto verb for searching for information on the World Wide Web. Founded by Larry Page and Sergey Brin, two Stanford PhD candidates , in 1998, Google started as a fledgling search engine in a sea of competitors, including Yahoo, Excite, Hotbot, Lycos, Infoseek, Altavista and a slew of other small startups vying for a piece of the lucrative Internet search pie. One by one these competitors fell, and Google remained as the last man standing, a search engine that dominates almost every major Western market, and has since expanded into advertising, mobile technologies and cloud computing. During its rapid growth, the company, worth nearly $200 billion, has made enemies of the entire tech industry as well numerous national governments, due to anti-competitive practices and privacy concerns. Just how did a tiny little research project from two graduate students evolve into the 800-pound gorilla on the Internet?
Google grew up in the late 1990s, when competing search engines were attempting to find the fastest algorithms for their web spiders crawling the Internet. Like its future arch-nemesis Apple, Google was first established in a garage in Menlo Park, California. Page and Brin then hired Craig Silverstein, a fellow PhD candidate at Stanford, as the first employee, and together they attempted to create a search algorithm faster, more powerful and more accurate than its peers. As Google attracted more visitors, it got the attention of some major players in the tech industry. In August 1998, Andy Bechtolsheim, the co-founder of Sun Microsystems, invested $100,000 in Google to help it get incorporated, but the winds suddenly picked up in June 1999 when a group of major venture capital firms plowed $25 million in the company, betting that Google would be the last search engine standing by the start of the new millenium. In 2001, Page and Brin hired Eric Schmidt from Sun Microsystems as the "grown-up" of the self proclaimed "Google triumvirate", and appointed him CEO.
IPO and Corporate Culture
Google's IPO in August 2004 was well-timed, after the dot-com crash became a distant memory, and attracted massive investor interest. Its IPO shares were priced at $85 per share, but jumped to $100 on the first day of trading, and later would hit $700 in October 2007. Page and Brin became instant paper millionaires, but maintained that the company mantra, "Don't Be Evil", would never change. Although many investors were concerned that Google would be irreparably changed by going public, the company proved them wrong by continuously promoting innovation in its Googleplex, which has become an icon and template for designers of office space with a focus on fostering employee innovation.
Growth and Innovation
Ever since the beginning of the 21st century, Google has been focused on acquiring other technologies to outlast its fallen search engine brethren. In 2004, Google acquired Keyhole, Inc., which produced a product called Earth Viewer which would eventually evolve into Google Earth and become a major part of its Google Maps initiative. In 2005, Google acquired Android, a developer of mobile software which would become the company's main weapon in the smartphone war, which would erupt three years later. In 2007, Google acquired YouTube, the most popular video sharing site on the Internet, and DoubleClick, a major part of its advertising initiative. These purchases are but a few of Google's many acquisitions over the past decade, but are symbolic of Google's foresight for the future of the Internet.
Google also became obsessed with the "cloud" before anyone was even aware of the term. Google realized that Bill Gates' attempt to embed Microsoft's browser into the operating system in 1998 was the future of the Internet. However, Gates was struck down by the U.S. government since he was trying to sell it for a profit. Google came in with a different angle. By introducing cloud based services such as Docs, Mail, Photos, Video, Blogs and Books all accessed by a single sign-in, Google created the content before they introduced the operating system - Chrome - which was in fact just the company's Internet browser locked to all of its cloud-oriented sites. It then used Microsoft's strategy to force widespread adoption of its new mobile operating system, Android, by spraying its system across multiple platforms of fragmented hardware. Best of all, Google offered all of these services for free, much to the chagrin of rivals Microsoft and Apple.
Although the company has profited handsomely from its innovations, there have been some questionable missteps. In 2010, the company famously started its own power company, Google Energy, investing $38.8 million into two wind farms in North Dakota. Investors wondered just how these power plants, which would power 55,000 homes, fit into the company's long-term game plan. The company has also made some bizarre investments, such as a human-powered monorail and a self-driving car running on Google maps. Many of these missteps have led investors to question the company's fiscal discipline and long-term strategy.
The company has also been fighting a losing war with Facebook, which has a very different, inside-out approach to becoming the new king of the Internet. Google's social networking intiative, Google+, has yet to make a dent in the social network kingpin's market share.
In April 2011, Google acquired 6,000 Nortel Networks patents in an attempt to keep them out of Apple's hands. In August 2011, Google continued fighting against Apple by acquiring Motorola Mobility for a staggering $12.5 billion. Many analysts believe that Google is destined to ruin its own pristine margins by continuing its desperate battle against the iPad and the iPhone; through Android, Google is claiming market share but is unable to successfully monetize these devices. However, many of these side businesses - cloud computing and Android - are merely moats protecting its core revenue source - search and advertising revenue. If Google can continue to grow this moat as well as its core revenue, then the company will continue to raise massive amounts of disposable cash that it can randomly throw at acquisitions in hope that one will stick and become the "next big thing". It's a chaotic approach, far from the staunch conservatism of Microsoft and the sleek efficiency of Apple, but it works, and Google's still one of the most innovative, fastest growing companies in the market today.