A Brief History of Google

© Service des relations industrielles©(SRI)
EPFL
Hervé
H éL
Lebret
b
May 2010
(f
(from th
the book
b k )
www.startup-book.com
Disclaimer: this is the Google story, not the Google history …

some information may be untrue as it comes mostly from the Internet
EPFL
1995 1996 1997 1998 1999
since 2000
The sky
y seems to be the limit
EPFL
EPFL
Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Documents 24M 1.3B 3B 4B 6B 8B 25B?
indexed
Employees 8 39 60 284 682 1’628

1 628 3’021
3 021 5’680
5 680 10’674
10 674 16’805
16 805 20’222
20 222 19’835
19 835
Revenue 0.2 19.1 86.4 439 1’465 3’189 6’139 10’610 16’593 21’795 23’650
($M)
Income ($M) -6.7

67 -14.7
14 7 7 99 105 399 1’465 3’077 4’203 4’226 6’520
EPFL
“In the spring of 1995, Larry Page and Sergey Brin

first met at a social outing in San Francisco
designed to welcome new applicants to Stanford
Doctoral Program.”
Despite their differences and not initially working

together,
g , they
y became friends and were q quickly
y
known as “LarryandSergey”.
Sources: Brainstrom,
Brainstrom the news letter of Stanford Office of
Technology Licensing – vol. 9 – no. 2 – Spring 2000
and The Google Story by D. Vise - Random House, 2005
EPFL
Garcia-Molina, Brin’s adviser, recalls how it all started.

Page came into his office one day in 1995 to show him a
neat trick he had discovered.
The AltaVista search engine could show what other sites

linked to them but did not exploit this link information; Page
suggested
gg it would be a g
good wayy to rank sites.
The PageRank system, system invented by Larry Page (and

named after him) judges a site’s
importance by analyzing
outside links to it.
Source: Stanford Magazine, Nov. 2004

EPFL
Meanwhile Brin worked on a research p project

j within the
database group in associative data mining. Brin worked on
ways to find specific word combinations that often occurred
t
together
th on the
th Internet.
I t t
Later,, Page
g combined his method of analyzing y g
“back” links pointing to a given website with Brin’s
web crawler, and their combined research moved
under the Digital Library umbrella.

EPFL
Google soon overgrew the bounds of their lab…

In 1996, Brin and Page disclosed the technology to Stanford
OTL which contacted several internet companies…and
companies were interested…even
interested even one company bid a
significant amount of money, but none of the offers equaled
Google’s
Google s potential…
For the next two years, while
continually completing an
increasing number of searches,
the technology
gy incubated in the
OTL portfolio of technologies.
Source: Brainstrom, the news letter of

Stanford Office of Technology Licensing
vol.9 – nb.2 – Spring 2000
(and www.archive.org for the picture)
EPFL
Interestingly enough, Derwent gave in 2006

- 3 patent filings with Page’s name (2 from Stanford and 1 Google)
- 6 patent filings with Brin’s name (all Google)
- Page’s key patents as US only
EPFL
In 1997, Google has become the De Facto search engine for the
Stanford community.
y Page’s
g advisor funds $
$10k for new computers
p but
Google quickly reach limits in resources.
In March 98, Page and Brin try to sell the engine to Alta Vista for $1M
but DEC (Altavista’s mother company) was not “very open to outside
technology”
Later, with the help of Stanford professors and OTL,
Later OTL they contact
Excite and other search engines without success.
Page s advisor, Terry Winograd, contacts VCs but they are not interested
Page’s
by search engines anymore. Brin and Page, “who have a skeptical view
of authority” are frustrated but more determined.
Yahoo’s founder, D. Filo then advised them to take a leave of absence

from their PhD and to start their own business
Source: The Google Story by D. Vise Google began in Stanford

Random House, 2005 Gates’ building!!
EPFL
"Larry and I mapped out a strategy to talk to existing search-engine

companies to see if there was any interest in licensing this," said Luis
Mejia , an OTL senior licensing officer.
officer
Steve Kirsch, CEO of search engine Infoseek, met with them a couple of
times and made a verbal offer.
offer Mejia declined to name the amount,
amount but
said: "It wasn't sufficient for us to feel he was really committed to it."
(Kirsch told the Wall Street Journal that he had offered $250,000.)
Yahoo declined to meet, Mejia recalled.
He contacted venture capitalist Vinod Khosla,

Khosla who set up a meeting at
his firm, Kleiner Perkins, with Excite, one of its portfolio companies.
"There was a lot of disbelief in what the capabilities of the page-rank
searchh algorithm
l ith were,"" Mejia
M ji said.
id "They
"Th weren't't convinced
i d it was worth
th
much. They decided they weren't interested in licensing it.''
Mejia doesn't recall being particularly thrilled

about Google's prospects.
Source: Carolyn Said, San Francisco Chronicle, August 2004.
EPFL
Tip 1: it is very important to find

great people you are compatible
with.
Tip 2: There is a benefit from being

real experts. Experience pays off.
Source: Stanford Technology Ventures Programme

Tip 3: Have a healthy disregard for
stvp.stanford.edu the impossible. Stretch your goals.
Tip 4: It is OK to solve a hard

problem. Solving hard problems is
where
h you will
ill gett the
th big
bi leverage.
l
EPFL
“We had to buy a Terabyte (which costs about $15,000) …

and put it on our credit cards…”
In August 1998, thanks to David Cheriton,
a Stanford professor, Page and Brin meet
Andy Bechtolsheim,
Bechtolsheim founder of
Sun Microsystems and working
at Cisco.
After an hour,
Aft h h makes
he k a $100,000
$100 000 check
h k to
t “Google
“G l Inc.”
I ” without
ith t
knowing the company does not exist yet.
In October 1998,
1998 Page and Brin convinced a friend to rent a Garage and
spare room for $1700/month. They quickly added 8 phone lines, a cable
modem and a DSL line. After two months, they were 8 people and they
movedd again
i in
i February
F b 1999
1999.
Bechtolsheim, Cheriton, Jeff Bezos (Amazon’s founder)
and a few other angels invested a total of $1M
in the A round in 1998.
EPFL
I am sure Google’s first office will soon become a legend

as it was a Garage. In fact Google had bought it!
EPFL
From a first office in a garage good for small team,
… they moved to
165 University Ave
Ave.
in Palo Alto after 5
months. This is the
h
home off many other
th startups
t t …then
then in
including Logitech and Paypal… Mountain
View…
… and finally to the GooglePlex in 2003

EPFL
In 1994, a PhD student in the database group; asked if he would join

Yahoo! as employee No. 1, he laughed: “You couldn’t pay me enough
money to work for a company called Yahoo!
Yahoo!”
In 1995,
995, worked
o ed with Brin oon the
epprocess
ocess o
of finding
d gp pieces
eces o
of information
o a o
that commonly occur together. Brin wrote his “crawler” program. Lent did
not stick around, a decision he confesses he regrets. But in early 1996,
Lent explains,
explains “We
We all said,
said ‘There
There will never be another Yahoo!
Yahoo!’ Their
research seemed purely an academic exercise.”
He got a call from Microsoft in 2003, telling him the company wanted “to
kill Google,” he recalls. He declined.
IIn 2004,
2004 he
h has
h nott given
i up: he
h has
h an algorithm
l ith he h calls ll “Dynamic
“D i
PageRank,” and he is CEO of Medio. “I need to give it a try. Google and
Yahoo!, be warned.” Did anyone say, “There will probably never be
another Google?”

EPFL
EPFL
After raising $1M with angel investors, Google nearly went out of money
quickly. The founders also wanted to keep control of their company, so
they built the strategy to attract the best 2 VCs so that one would
neutralize the other one. Thanks to their angels, it worked!!!
This “divide and conquer” strategy enabled Google to raise $25M in May
1999 with
- John
J h DDoerr off Kl
Kleiner
i P
Perkins
ki (A(Amazon, AOL,
AOL
Compaq, Genentech, Sun, …
- Mike Moritz of Sequoia (Apple, Cisco, Oracle,
Yahoo, youtube
Another
A th $15M off round d C with
ith Yahoo,
Y h E i Schmidt
Eric S h idt and
d
many others (Arnold Schwarzenegger, Tiger Woods, …).
Schmidt, the new CEO, joined in 2001 before the company
went public in 2004 (raising $1.6B)
EPFL
Googleware is the nickname given to Google’s very powerful

combination of Hardware and Software
Software.
Founders are known to be extremelyy smart … and pragmatic

p g
Today, Googleware
means tens of 1000’s of
simple
i l PCPCs
EPFL
A technology first ….
apparently gives
the right answer
answer…
… and even more

EPFL
A technology first …. a business model second
advertising
in the right column
is the secret sauce
EPFL
advertising
g
on others’ sites
is another revenue
source
NB: this example does not imply Google is Bluewin ad provider.

EPFL
Larry Page certainly has a business-oriented mind,
Larry may have been helped by his old brother, Carl, who
founded eGroups
p and sold it to Yahoo.
Sergey has qualities in cost cutting and it is known Google

is not wasting money.
money They made cheap computers; they
did not spend a lot on marketing.
Omid Kordestani, their first VP Sales was

previously VP Sales at Netscape and
was instrumental
i t t l in
i d i i
designing th
the
business model.
EPFL
“genius
genius is 10% inspiration and 90% transpiration”
transpiration
Picasso? Einstein?
I was recently reminded that nothing comes without hard

work, even at Google.
At G
Google,
l ththere iis ffree ffood;
d one off th
the early
l hi
hires was a
cook. Working environment is nice…
… but this gives more pressure to spend long hours at work.

“It was common to work 6 days a week”. You’d better have
th energy and
the d nott too
t muchh family
f il or private
i t commitments.
it t
And be young?
EPFL
It is well known that it is extremely difficult to keep on being

innovative.
Google has taken creative approaches: employees work in

small teams (3 ideally) and are free to use 20% of their
working time on their personal projects that may become
future
utu e Goog
Google
epproducts.
oducts
Google News, Froogle, Gmail have roots in this 20% time as

wellll as .
And they do not seem to lose their humor…
EPFL
the “Google” name comes from …
GOOGOL = 10100
The Google’s people seem to love numbers:
at IPO, they planned to raise $2’718’281’828

e=2.718281828
at IP0, 14’142’135 shares were finally newly created
√2= 1.4142135
att their
th i secondary,
d th
they sold
ld 14’159’265 shares…
h
Π=3.14159265
EPFL
Cap. table at Series A Cap. table at Series B
Shareholder Shares Ownership Shareholder Shares Ownership
Brin 38'490'304 42% Brin 38'490'304

38 90 30 27%
%
Page 38'490'304 42% Page 38'490'304 27%
Bechtolsheim 1'600'000 Bechtolsheim 1'600'000
Cheriton 1'600'000
1 600 000
Ch it
Cheriton 1'600'000
Bezos 1'600'000
Bezos 1'600'000
Shriram 1'600'000
Shriram 1'600'000
Stanford 1’842’000
1 842 000 1.3%
Stanford 1’842’000 2%
Others 7’118’782
Others * 7’118’782
Series A 15'360'000 11%
Series A 15'360'000 17%
Kleiner Perkins 23'893'800
23 893 800 17%
Total 92'340'608
Sequoia 23'893'800 17%
*: others include a number of angles not identified
Series B 47'787'600 34%
Series A: $960k Total 140'128'208
140 128 208
Capitalization: $5.7M
Series B: $25M
Capitalization: $70M
NB: data compiled from Google’s S1 documents but numbers give only an idea,
precise data are not known
EPFL
Cap. table at Series C Cap. table at Series IPO
Shareholder Shares Ownership Shareholder Shares Ownership
Brin 38'490'304 26% Brin 38'490'304 14%
Page 38'490'304 26% Page 38'490'304 14%
Bechtolsheim 1'600'000 Bechtolsheim 1'600'000
Cheriton 1'600'000 Cheriton 1'600'000
Bezos 1'600'000 Bezos 1'600'000
Shriram 1'600'000 Shriram 1'600'000
Stanford 1’842’000 1.2% Stanford 1’842’000 0.6%
Others 7’118’782 Others 7’118’782
Series A 15'360'000 10% Series A 15'360'000 6%
Kleiner Perkins 23'893'800 16% Kleiner Perkins 23'893'800 9%
S
Sequoia
i 23'893'800 16% S
Sequoia
i 23'893'800 9%
Series B 47'787'600 33% Series B 47'787'600 18%
Series C 6’479’000 4% Series C 6’479’000 2%
Total 146‘607'208
146 607 208 Common (ESOP) 105’557’498
105 557 498 36%
Eric Schmidt 14’758’800 5.4%

Series C: $15M
Capitalization: $348M Common (IPO) 19’600’000 7%
Total 271’764’706
IPO: $1.67B - Capitalization: $23.1B

NB: data compiled from Google’s S1 documents but numbers give only an idea, in 2005, secondary of 14’159’265 shares at $295, raising $4B;
precise data are not known Stanford announced they made $336M with Google.
EPFL
Obviously the company is very ambitious and many new

things
g will come.
One surprising element is the founder’s interest in clean
energies.
energies
Another surprising element is the founder’s interest in
genetics It seems they may use Google
genetics. Google’ss computing power
to develop molecular biology platforms.
“Google is teaming up with Craig Venter (of human genome

mapping fame) to use Google
Google’ss vast computing power to
help unlock biology’s mysteries, and maybe one day to help
you search through your genes.”
Source: The Boston Globe – Nov. 2005 and “The Google Story”
EPFL
The Google’s
g motto: “Don’t Be Evil”
“They shut down Stanford network once”
“They
They could have begun earlier”
earlier
Source: Stanford Technology Ventures Programme - stvp.stanford.edu
The company is very paranoid: confidentiality is very high in

the company and employees are very cautious about giving
information. A lot is unavailable. Many libraries are very
uncomfortable with Google’s NDA.
“The Google
g lawyers y advise the Google g employees
p y not to read p
patent
applications or patents from non-employees because that might preclude
the Google employees from future invitations in that area. If you are
interested in selling the intellectual property,
property the only time Google has ever
bought IP is when there was already a start-up trying to market that IP.”
Develop early stage ideas? © Service des relations industrielles©(SRI)
EPFL
The story
y gives
g hints:
yes focus on great technologies
yes, technologies,
but more importantly focus
on great people who
- are ambitious
biti
- keepp on innovating g
- with patience and determination
- believe in their ideas
EPFL
From Hegel
„Nichts Großes in der Welt ist ohne Leidenschaft vollbracht worden“
“Nothing great in this world has ever been accomplished without passion”
« La passion est tenue pour une chose qui n'est pas bonne, qui est plus ou moins mauvaise : l'homme ne doit pas
avoir des passions. Mais passion n'est pas tout à fait le mot qui convient pour ce que je veux désigner ici . Pour
moi, l'activité humaine en général dérive d'intérêts particuliers, de fins spéciales ou, si l'on veut, d'intentions
égoïstes,
g , en ce sens qque l'homme met toute l'énergie
g de son vouloir et de son caractère au service de ses buts,,
en leur sacrifiant tout ce qui pourrait être un autre but, ou plutôt en leur sacrifiant tout le reste . [...]
Nous disons donc que rien ne s'est fait sans être soutenu par l'intérêt de ceux qui y ont collaboré. Cet intérêt,
nous l'appelons passion lorsque, refoulant tous les autres intérêt ou buts, l'individualité entière se projette sur un
objectif
j avec toutes les fibres intérieures de son vouloir et concentre dans ce but ses forces et tous ses besoins.
En ce sens, nous devons dire que rien de grand ne s'est accompli dans le monde sans passion. » La raison dans
L’Histoire – éditions 10/18, p. 108

A Brief History of Google

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A Brief History of Google

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© Service des relations industrielles©(SRI)

Disclaimer: this is the Google story, not the Google history …

1995 1996 1997 1998 1999

Employees 8 39 60 284 682 1’628

Income ($M) -6.7

“In the spring of 1995, Larry Page and Sergey Brin

Despite their differences and not initially working

Garcia-Molina, Brin’s adviser, recalls how it all started.

The AltaVista search engine could show what other sites

The PageRank system, system invented by Larry Page (and

Source: Stanford Magazine, Nov. 2004

Meanwhile Brin worked on a research p project

Source: Stanford Magazine, Nov. 2004

Google soon overgrew the bounds of their lab…

Source: Brainstrom, the news letter of

Interestingly enough, Derwent gave in 2006

Yahoo’s founder, D. Filo then advised them to take a leave of absence

Source: The Google Story by D. Vise Google began in Stanford

"Larry and I mapped out a strategy to talk to existing search-engine

Yahoo declined to meet, Mejia recalled.

He contacted venture capitalist Vinod Khosla,

Mejia doesn't recall being particularly thrilled

Tip 1: it is very important to find

Tip 2: There is a benefit from being

Source: Stanford Technology Ventures Programme

Tip 4: It is OK to solve a hard

“We had to buy a Terabyte (which costs about $15,000) …

I am sure Google’s first office will soon become a legend

From a first office in a garage good for small team,

… and finally to the GooglePlex in 2003

In 1994, a PhD student in the database group; asked if he would join

Source: Stanford Magazine, Nov. 2004

Googleware is the nickname given to Google’s very powerful

Founders are known to be extremelyy smart … and pragmatic

… and even more

A technology first …. a business model second

NB: this example does not imply Google is Bluewin ad provider.

Larry Page certainly has a business-oriented mind,

Sergey has qualities in cost cutting and it is known Google

Omid Kordestani, their first VP Sales was

I was recently reminded that nothing comes without hard

… but this gives more pressure to spend long hours at work.

It is well known that it is extremely difficult to keep on being

Google has taken creative approaches: employees work in

Google News, Froogle, Gmail have roots in this 20% time as

the “Google” name comes from …

The Google’s people seem to love numbers:

at IPO, they planned to raise $2’718’281’828

Cap. table at Series A Cap. table at Series B

Shareholder Shares Ownership Shareholder Shares Ownership

Brin 38'490'304 42% Brin 38'490'304

Page 38'490'304 42% Page 38'490'304 27%

Bechtolsheim 1'600'000 Bechtolsheim 1'600'000

Cap. table at Series C Cap. table at Series IPO

Shareholder Shares Ownership Shareholder Shares Ownership

Brin 38'490'304 26% Brin 38'490'304 14%

Page 38'490'304 26% Page 38'490'304 14%

Bechtolsheim 1'600'000 Bechtolsheim 1'600'000

Cheriton 1'600'000 Cheriton 1'600'000

Bezos 1'600'000 Bezos 1'600'000

Shriram 1'600'000 Shriram 1'600'000

Stanford 1’842’000 1.2% Stanford 1’842’000 0.6%

Others 7’118’782 Others 7’118’782