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Can Google's search engine find profits? (1999)
- subdane 12y agoOooh Momma, Elliot Zaret! 'It works like this: The entire Web is constantly downloaded onto Google's computers, where it is aggregated, indexed and prepared for searches. When a user types in a search, Google performs a complex computation -- solving an equation that has 500 million variables and 2 billion terms -- to determine the best results on the "most important" sites. That equation takes into account many factors including how close the search terms are to each other, and whether other "important" Web sites point to the site the terms are on.'
- javajosh 12y agoI would very much like to see the deck that Larry and Sergey showed Kleiner Perkins in 1999. It would be interesting to match that up to the historical record.
- topynate 12y agoThe story is that their deck was a graph of their user growth... and that's it.
- deleted 12y ago[deleted]
- dublinben 12y ago>"Obviously, we're going to build an interesting business about it" It's too bad they couldn't come up with anything better than advertising.
- pizzashark 12y agoThey own the most popular video hosting site, the 5th most popular social network, the most popular search engine, the fastest internet service publicly available in the US, and the most popular web browser, and you just said they don't do anything better than advertising.
- jrbapna 12y agoNot to mention the most popular email and maps
- nandemo 12y agoBut apart from the most popular video hosting site, search engine, web browser, web email and maps, what has Google ever done for us?
- dankohn1 12y agoIn case anyone doesn't get the Monty Python reference: https://www.youtube.com/watch?v=ExWfh6sGyso https://www.youtube.com/watch?v=ExWfh6sGyso
- ASneakyFox 12y agoHe was talking about their uninventive business plan. Not their consumer products. They're plan is the same as all other tech companies just they did/do it better.
- wtetzner 12y agoTo make money. YouTube, Google+, Google Search, and Chrome don't make money, other than being vehicles for advertising. (I don't know anything about their internet service.)
- r0s 12y agoWell you could argue they would have no real ability to financialize ads if they didn't do real work on those products.
- umeshunni 12y agohttp://www.forbes.com/sites/timworstall/2013/12/12/googles-youtube-ad-revenues-may-hit-5-6-billion-in-2013/ http://www.forbes.com/sites/timworstall/2013/12/12/googles-y...
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- jfoster 12y agoKeep in mind that advertising was very different back then. Untargeted, often not measurable, and (on the internet) often consisted of a fast-moving "punch the monkey" banner. Much more than just using it as a revenue source, Google more or less invented modern advertising.
- cpayne 12y agoMaybe - but Google's Driverless Car looks awesome! I'm not a fan of Google Glass, but that's interesting. And Android?
- adwf 12y agoTrue, but in terms of how to make money out of a huge mass of users, advertising is usually the best bet. However, I often think there's room for more directly paid search as opposed to side-funded with advertising. Afterall, companies pay for (re)search all the time. They pay for their own employees to do research and write reports. They pay marketing companies for research, etc... Do people really need a search result of just web addresses back in 0.1s, when they could get not just the address, but the actual information they need in 30s? I'd pay for a service that could do that.
- dminor 12y agoMassive Betteridge fail.
- function_seven 12y agoI think his law needs to be updated as: Any headline which ends in a question mark can be answered by the word 'no', but will someday be answered with 'yes'.
- qopp 12y agoAnother way to to read betteridge's law of headlines is to say "this article won't answer that question". Which it didn't back in 1999.
- u124556 12y agoThe search engine didn't find profits. The ad platform did.
- frequentflyeru 12y ago"We have other ways of making money," said Page. "You'll see."
- 7Figures2Commas 12y agoA decent short overview of how Google's advertising business evolved can be found at http://publishing2.com/2008/05/27/google-adwords-a-brief-history-of-online-advertising-innovation/ http://publishing2.com/2008/05/27/google-adwords-a-brief-his.... While there were some unexpected twists and turns, the timeline suggests that when this article was written, Google was already thinking about the ways it could adopt an ad model. As a side note, I'm not sure if this was posted as an ironic response to the growing bubble talk of the current boom but unlike in the late 90s, the challenge for most startups today is not finding a business model but rather achieving enough scale to apply one of the many proven business models successfully and sustainably.
- squiggy22 12y agoPretty sure that is accurate too, Steven Levy's book 'The Google story' documents their fear of Microsoft in particular realising what a massive deal search was going to be as a business, and how much cash it would generate. The culture of 'no success to see here' continued until they had established significant first mover advantage.
- thathonkey 12y agoIt's pretty nice that ZDNet has stories from 1999 up still although I suspect that is not the story's original URL. (They've improved it for the benefit of Google's search engine since that time.)
- jacobolus 12y agoYep, the original URL was http://zdnet.com.com/2100-11-514893.html http://zdnet.com.com/2100-11-514893.html which domain (com.com) is now owned by a domain squatter. http://zdnet.com/2100-11-514893.html http://zdnet.com/2100-11-514893.html is a 404. The Wayback Machine has it though: http://web.archive.org/web/*/http://zdnet.com.com/2100-11-514893.html http://web.archive.org/web/*/http://zdnet.com.com/2100-11-51...
- declan 12y agoActually the original URL would have been http://zdnet.com/etc http://zdnet.com/etc. when this (rather silly) article was published in 1999. CNET Networks, which owned com.com, tv.com, radio.com, search.com, and news.com, bought ZDNET a year later in 2000. A few years afterward CNET began to transition many sites including news.com and zdnet.com over to suffixes ending in .com.com; I vaguely recall being told that it was to enable CNET-network-wide cookies without that era's browsers pitching a fit. (Note the Wayback Machine indexed it as zdnet.com.com only after 2002.) Eventually I helped (I was not alone but was the most vocal) to make the switch away from news.com.com to news.com, which made more sense and served readers better. Of course I've since left to found http://recent.io/ http://recent.io/, but thought I'd inject a little history as someone who worked at CNET Networks during part of that .com.com time.
- jacobolus 12y agoAha, thanks. > (Note the Wayback Machine indexed it as zdnet.com.com only after 2002.) I can’t find a link to the article from the web from before that date, and can’t figure out precisely what the original URL was, in that case.
- bostonpete 12y ago
- kylelibra 12y ago"Internet companies, which are almost expected to lose gobs of money"
- tim333 12y agoWritten when the dot com boom was at it's boomiest of course.
- akassover 12y agoFunny to read that today. Some of the pontificating experts really do look silly. I'm not sure the Google founders had a much clearer grasp of the future, though. Legend has it they had tried to sell the company for $750k a few months before (http://techcrunch.com/2010/09/29/google-excite/ http://techcrunch.com/2010/09/29/google-excite/). It's a pretty mental jump to go from trying to sell the house for $750k to raising $25 million in a matter of months.
- tim333 12y agoReading it made me feel silly as I thought much the same way as the expert in the article and as a result failed to buy Google shares when they floated. Ah well.
- avn2109 12y ago>> "...'We're in an unreal world now where the concept can get you $25 million -- where revenues and business plans, you don't need to have those," said Hagen. "But that blip's got to end at some point.'" Now more than ever, Mr. Hagen. Now more than ever.
- nostrademons 12y agoIt ended twice, and bounced right back again. Come to think of it, I'm rather glad for those irrational investors back in '99, without whom Google might not exist.
- rohunati 12y ago"And they want to avoid competing with other search engines to be the browser of choice for existing portals. In fact, Page said Google doesn't have any real competitors at all, which may be why they don't intend to do much marketing." Interesting to think about in light of Peter Thiel's lecture for "how to start a startup" at Stanford. He is correct that the narrative has changed. Contrast the above quote with the one Thiel used in his lecture from Schmidt, which basically said "Google is not a search company, it's an ad company," or some variation thereof.
- deleted 12y ago[deleted]
- yzzxy 12y agoIf I understand the quotes correctly, Page is talking about marketing Google to users, while Thiel is referencing Google's sales of search ads. Two totally different topics.
- InclinedPlane 12y agoI'm becoming less a fan of Thiel as time goes on, his ideas seem to be superficial and often harmful. Saying that google is an ad company is a mistake. Just because that's where the revenue, the sustenance comes from as a primary source. But that revenue exists because of google's market domination in search and other services. If google stopped being a search company their ad revenue would dry up overnight. Saying that google is an ad company is like saying that a particular software dev. is not a "software person" but a "burrito person", because they happen to eat burritos a lot. At the end of the day google's revenue comes about because they provide something of value to their users, and advertisments are a way to monetize that value effectively. No different than broadcast tv or radio. But it's the value which is the foundation of the company, the revenue is merely a consequence of that value. Thinking that the revenue stream is an intrinsic part of the company is a mistake that has doomed many companies before. Think about newspapers, I'm sure many of them thought of themselves as advertising companies to a substantial degree, and when that revenue dried up because the value of the newspaper changed, many of them were left wondering what to do, many of them have already gone out of business, many more still will. Hopefully google won't make the same mistake and alienate its users more than it has already or ignore competition before it's too late.
- umeshunni 12y ago>> Amazon CEO Jeff Bezos is widely rumored to be an investor in Google. I wonder if this is/was true? Bezos seems to have made investments in many other companies like Uber and Twitter (http://blogs.wsj.com/digits/2013/08/05/a-stroll-through-the-many-many-many-investments-of-jeff-bezos/ http://blogs.wsj.com/digits/2013/08/05/a-stroll-through-the-...)
- mhartl 12y agoYes, it's true: http://allthingsd.com/20091005/new-yorker-bezos-initial-google-investment-was-250000-in-1998-because-i-just-fell-in-love-with-larry-and-sergey/ http://allthingsd.com/20091005/new-yorker-bezos-initial-goog...
- waterlesscloud 12y agoSo about $3.6 billion worth, if he's held on to it all.
- asadlionpk 12y agoand only investor in Basecamp (37signals)
- kristofferdk 12y ago"We're in an unreal world now where the concept can get you $25 million -- where revenues and business plans, you don't need to have those," said Hagen Nice to be in a world before business model.
- alexjeffrey 12y agowe still are - plenty of startups don't even start making money before they're acquired.
- deleted 12y ago[deleted]
- netcan 12y agoI wonder how Google's success as a search engine could have unfolded differently. Imagine they had launched adwords with more basic tools: less granular targeting and such. Imagine that their revenue had gradually climbed to $1bn by now, enough to employ a battalion of the best engineers they could find and focus on search. Investors (those delivering truckloads of cash in the article) would still have called it a big success. They probably wouldn't have built or bought all the expensive speculative stuff like self driving cars, android, wave & youtube. Would the search engine be worse? Would it be better? Would they have been able to maintain their lead in search?
- gjvc 12y agoyes
- Matt722 12y agoInteresting post.
- deleted 12y ago[deleted]