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Case Study Three: The Juggernaut Google Inc.

5/29/2012 9:56:40 AM

Tags: Beautiful and Abundant, Queries, Case Studies, Google, Bryan Welch

Google’s famous unofficial motto is “Don’t Be Evil.” 

The decade between the turn of the millennium and 2010 might justifiably be called the Google Decade. The company may have built more influence in less time than any other human endeavor in history. If you consider the number of people interacting with Google each month (about 150 million unique visitors at the time of this writing, according to Compete.com), the company’s worldwide computing power (more than a million servers processing a billion search requests and 20 petabytes – a petabyte is 1000 terabytes, or a quadrillion bytes – of data every day) or its raw economic might, Google must be considered the biggest media company of all time, exchanging more information with more people than could have been imagined just a decade ago. 

Google Logo 

The founders raised about $25 million to get their company rolling in 1999. Five years later their initial public offering raised $23 billion. In other words, between 1999 and 2004 Google’s market value appreciated at an average rate of about $12 million a day. In 2007 the company generated about $16.6 billion in revenue. In 2008 Google’s revenue swelled by 31 percent to $21.8 billion. In 2009, during one of the worst downturns in the history of the advertising industry, the company’s revenues, which come almost entirely from advertising sales, grew another $2 billion, in round numbers, to $23.7 billion. 

One of the moments that define Google’s corporate personality, and possibly the reason it has dominated its highly competitive industry, is described in Ken Auletta’s best-selling 2009 book about the company.Google founders Sergey Brin and Larry Page were meeting prospective investors in 1998, including Yahoo’s Jerry Yang and David Filo. They were discussing Google’s search results and the fact that they were more relevant than Yahoo’s. That put Google at a disadvantage, the Yahoo founders told the Google upstarts, because the revenue model for search engines is based on advertising sales. The more pages a search customer sees, the more advertising can be sold. Google’s more relevant searches meant that fewer pages would be displayed for advertisers, ergo, Google would make less money. Brin and Page said they didn’t care. They wanted to build the best search engine. They wanted to deliver the most relevant results for their users, faster than their competitors. 

An investor in the meeting described Google’s strategy as “disruptive,” and put his money in. A few months later he introduced Brin and Page to Amazon founder Jeff Bezos, another customer-focused entrepreneur who became one of their first few investors. 

“I just fell in love with Larry and Sergey,” Bezos is quoted as saying. “There was no business plan. They had a vision. It was a customer-focused point of view.” 

The fact that one of the greatest success stories of the digital era was conceived based on a collective vision of customer satisfaction – rather than a business plan – speaks to the power of a collective vision. Google’s success may be, in part, a demonstration of the economic potency of conscience. Google has succeeded at least partly because its founders kept their priorities straight. They focused their organization’s achievements on delivering the best product–the most efficient search. Their “Don’t Be Evil” culture reinforced their business strategy. In their view, the most enlightened, least Machiavellian approach to business was to provide the best product by the most conscientious means possible. 

Not everyone was impressed by the company’s informal strategy, or its culture of nerdy conscientiousness. For every early investor who fell in love – like Jeff Bezos – there were hundreds of important technology capitalists who steered clear. Media mogul Barry Diller tells the storyof meeting the Google founders in the early days. At the time, Diller controlled Ticketmaster and Expedia. Brin arrived late, on rollerblades. Page wouldn’t look up from his PDA, even after Diller asked him if he was bored. According to Diller he said, “I’m interested. I always do this.” 

But Google’s culture appealed to two audiences who, in the end, proved themselves to be more valuable than investors. Users approved of the search engine’s efficiency. Traffic and revenue grew hyperbolically. And the best and brightest young minds in Silicon Valley were drawn to the company’s style and its perks.

Bryan Welch is the Publisher and Editorial Director of Ogden Publications, the parent company of MOTHER EARTH NEWS. Connect with him on .

For further optimistic discussion about our future, read Beautiful and Abundantby Bryan Welch and connect with Beautiful and Abundant on Facebook.


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