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HOW SERGEY BRIN & LARRY PAGE HAVE BRAINWASHED US TO

- ISSUE 20 OCT/NOV 11

Google it! Page 22

RETAIL: HOW TO GET CUSTOMERS IN STORE USING MOBILE MARKETING Page 60

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HOW SERGEY BRIN & LARRY PAGE HAVE BRAINWASHED US TO

GOOGLE IT! | By Daniel Alef |

Regardless of the language, the word ‘Google’ is recognised internationally and business analysts from around the world have likened the phenomenon of ‘Googling’ to brainwashing. It is synonymous with searching the internet and has entered our lexicons in the same way ‘Xerox’ and ‘Kleenex’ did years ago. But there is a major difference. The products developed by Xerox and the Kimberly-Clark Corporation were significant and useful but not world- or culture-changing innovations. Google Inc., the company founded by Sergey Brin and Larry Page, has altered the world we live in, with a profound impact on just about everything we do. The evolution of the term and the company is astonishing. There were approximately two billion internet users worldwide in 2010, according to the UN’s International Telecommunications Union. With more than 34,000 Google searches every second, approximately half of all internet users visit Google daily. But what is most astonishing is that this has taken place in just 13 years. London’s The Observer called Google “one of the wonders of the world” from a technological and economic point of view. AUSTRALIAN

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It is almost as though the internet came first; and Google second. Sergey Brin describes the internet as “the repository of all our knowledge”, a limitless and ever-expanding source of information and ideas. If you look at the internet as a virtual storehouse of knowledge, essentially an enormous database, it does not take a lot to figure out that it is only useful if it has an effective system for retrieving the information, one that embodies linkage, integration and accessibility. Google’s search engine is such system. And as the internet grows minute-byminute, the effectiveness and efficiency of the search engine becomes vitally important. Sergey Brin and Larry Page have created a search engine that can delve through trillions of documents and internet sites in a fraction of a second. For example, a Google search for ‘Walt Disney’ produces well over 49 million entries and 24 million images in .08 seconds. That is a lot of information to wade through, but Google has also ranked these entries through a series of proprietary algorithms that gives us the most relevant material at the top of the search. Only a handful of years ago people would have never thought this to be possible. Although Larry and Sergey set out to create the ultimate search engine which, according to Larry, “would understand exactly what you wanted, and it would give you the right thing”, they have also branched into other products, some related to the search engine, but others are what Google calls “emerging businesses.” In this brief period of time they have also revolutionised advertising while creating a company that has a current market capitalisation in excess of US$ 185 billion. According to Forbes, in 2010 Larry and Sergey were two of the wealthiest men on Earth, each with a net worth of US$17.5 billion. Like other young, uber-successful entrepreneurs of the digital age, Sergey and Larry are exceedingly bright, brash and confident, but they lacked any relevant work experience prior to starting their own company. However, it was a nearly seamless transition from academia to the formation of an enduring corporate megalith. There were no corporate failures to learn from and no executives to teach them the ropes and nurture their business practices and skills. So, how did Larry Page

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and Sergey Brin make Google the institution it is today? Here are some tips from creators of Google: 1. Build On What You Know The most successful entrepreneurs and titans of industry build their enterprises on a solid foundation of experience and knowledge in their respective fields. They normally have other attributes – such as passion, determination, work-ethic and vision – but the groundwork begins earlier as they forge their skills and knowledge through work and practical experience. Henry Ford was an excellent mechanic with extensive knowledge of wagons, horseless carriages and engines before he embarked on his own company. Milton Hershey worked as a confectioner and had three failed companies before he established Hershey Chocolate. Although for Segey and Larry, it was a little different. The internet was a relatively new technology when they formed Google. Entrepreneurs involved in a nascent field like the internet had little opportunity for practical work experience; they had to build from scratch, rely on their own resources and go with their instincts. Instead of corporate or business experience, Larry and Sergey focused on what they knew best – computer science. They had been passionate about computers and mathematics from an early age and by the time they were in graduate school studying computer science, they were quickly becoming experts in their field. Google’s search engine was born at Stanford University when Larry embarked on a project to collect links on the web in order to study how pages were linked to one another. “I figured I could get a dissertation and do something fun and perhaps practical at the same time, which is really what motivates me”, he said. First, he searched for links to the Stanford home page, where he discovered 10,000 people linked to Stanford. Then the question arose: which links to show and how to rank them? The search engines of the time did not understand ranking – which pages are more important – and simply produced random results for a particular search topic. At the same time, Sergey was studying data mining – the process of analyzing large

amounts of data and seeking out patterns and trends. Larry and Sergey joined forces and it was their combined knowledge and vision that made the Google vision become a reality. 2. Focus On Developing One Core Product Today, Google has an extensive line of products and services and a rainbow of enterprises and applications, but the underlying premise for the formation of Google, and what made it initially successful, is its search engine. While at Stanford, Larry and Sergey collaborated on a paper entitled ‘The Anatomy of a Large-Scale Hypertextual Web Search Engine’. The research morphed into BackRub and subsequently PageRank, two newer iterations of the search engine. They saw this as an open-source, non-commercial project – a search engine that would be available for public use. They were adamantly opposed to ad-supported services. Sergey believed, “Advertising-funded search engines would be inherently biased towards the advertisers and away from the needs of the consumers.” The search engine remained their sole focus. From inception, Sergey and Larry put all their meager resources into developing this one product. Initially they worked out of their dorms and small university offices, buying computer equipment on their credit cards and converting the computers into servers. Following the formation of Google Inc. in 1998, and the influx of capital from several angel investors, Larry and Sergey continued to devote all their energy to improving their core product – the search engine. 3. Set High Goals And Pursue Them Boldly Sergey and Larry have consistently reached beyond their grasp and when the goals proved within reach, moved the milestone further away. They were not looking for a great search engine: they sought, and are still seeking, the “perfect search engine”, one Larry defined as something “that understands exactly what you mean and gives you back exactly what you want.” Setting potentially unattainable goals is not limited to the product itself. Needing capital to fund their growth, Sergey and Larry approached two prominent venture-capital firms in Silicon Valley: Kleiner Perkins Caufield & Byers (KPCB)


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and Sequoia Capital. Getting these major venture capital firms to consider their request for US$25 million was a brazen move that typified the extraordinary confidence Larry and Sergey had in their company, but it was even bolder because they were only willing to give up 20% of Google, establishing a valuation of US$125 million for a one-year-old company without revenue. Moreover, to avoid giving any one party too much power on the Google board, they demanded that KPCB and Sequoia split the deal, something firms rarely do. But Larry and Sergey were adamant. The two firms ultimately acceded to their demands. Call it boldness, but the potentially unattainable goal was achieved. 4. Innovate, Innovate, Innovate Innovation is frequently associated with product and design but it also applies to other areas of corporate entrepreneurship, including the creation of unique revenue sources. Insisting on maintaining an open-source search engine, Sergey and Larry had to create a different mechanism for income generation. In late 1999 and early 2000, Google began testing a program to sell ad space on a Cost Per Mille basis, in which the advertiser pays for exposure of an ad to a specific audience, the dominant ad model of the time. “It didn’t generate much money”,

Sergey acknowledged. Declining to use banner ads, Google opted for their own model for selling text ads. AdWords, launched in October of 2000, allowed advertisers to create simple ads that would appear next to the subject being searched and the advertisers would only pay when someone actually searched the page where the ad appeared. Three years later, Google enhanced its advertising service by instituting a contenttargeted advertising program called AdSense, designed to identify the meaning of a web page and then automatically provide relevant ads. From the public’s perspective, this provided users with highly relevant ads, more specifically related to a specific web page’s content. Google’s press release called it an “innovative advertising technology.” Users found relevant advertising and advertisers received a fivefold increase in average click-through rates compared to traditional banner ads. Instead of taking the traditional route and selling access to their search engine, Sergey and Larry found a unique and innovative way to generate revenue. 5. Grasp The Full Picture Although the initial focus should be on the development of the core product, successful entrepreneurs like Larry and Sergey are constantly viewing and analysing the larger picture to stay ahead of the curve and determine what products and services can be built around the core, either through internal development or acquisitions. However, this does not shift the focus away from the company’s primary product. Google continuously upgrades its search engine to keep up with the growing mountain of data and number of surfers on the internet, but Sergey and Larry are casting a much wider net.

While many of the products Google has introduced in the past decade are related to its search engine, they are also powerful in their own right. These include Gmail, Google Maps and GPS, Google Earth, Google News, Google Books and Google+, the newest social networking site. Google has also ventured into “emerging” businesses. Android, the internal operating system for cell phones, has become the biggest smartphone platform by worldwide shipments in the second quarter of 2011, with a 48% market share. And YouTube, the leading online video program is so popular that it now takes up 22% of all mobile bandwidth usage with more than two billion video views a week. YouTube contributes more than a billion dollars in annual revenue to Google. Nevertheless, Google’s search engine remains one of the globe’s most useful and utilitarian services. 6. Confidence Is Key Inventor Charles Kettering once said that people are often taken with new ideas so long as they are just like the old ones. Innovators are often met by skeptics who cannot see the potential for a new technology. It is important to discriminate between healthy criticism and those who are negative to new ideas they do not understand. To be successful, entrepreneurs must have absolute faith and confidence in their product and goals. Being told something cannot be done does not mean it cannot be done. Take it as a challenge, not a reason to quit or change direction. While at Stanford, Sergey and Larry developed BackRub, the first version of their search engine. At first they shopped BackRub to potential suitors, including Excite, AltaVista and Infoseek, but were met with indifference. “We spent a lot of time talking to people . . . trying to convince them our technology would give them an edge”, Larry said. “But no one really engaged with us. The crunch came when the CEO of a major search company said that search did not matter to him that much . . . That astonished me.” Undaunted, Larry and Sergey had sufficient confidence in their vision to forge ahead and establish Google.


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To be successful, entrepreneurs must have absolute faith and confidence in their product and goals. Being told something cannot be done does not mean it cannot be done. Take it as a challenge, not a reason to quit or change direction. 7. Always Look Long Term Most entrepreneurs and corporate executives tend to focus on short-term results. Although Google was incorporated in 1998, and PC Magazine placed its search engine into its ‘Top 100 Web Sites’ for that year, Larry and Sergey were still indifferent about generating revenue. Their goal was to create the ultimate search engine and to make it egalitarian and open-toall, one that would allow people to search the internet without charge. Generating revenue almost seemed like an afterthought. Subsequently, Larry told potential investors in Google’s initial public offering, “We will not shy away from high-risk, high-reward projects because of short-term earnings pressure. Some of our bets have gone extraordinarily well, and others have not.” Moreover, “We will have the fortitude to do this.”

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Google is the ‘go-to’ search engine on the internet, however, the principles that surround its rise to the top can be applied every product and service, allowing them to also claim the much sougt-after status of a market leader. 8. Take Care of Your Employees And They Will Take Care of You Many companies take a carrot-and-stick approach toward their employees, rewarding them for exceptional deeds while creating a tense work environment with extensive and, at times, onerous rules and conditions. They expect – and sometimes even demand – that employees devote their time and energy to the company. Google opted to take a different, subtler approach toward enhanced employee productivity by creating a friendly and nurturing environment. Googleplex, the huge campus-like corporate headquarters with offices in Mountain View, California, offers employees an extensive array of perks: a gym staffed with trainers; lap pools; sand volleyball courts; video and other game and

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entertainment rooms; first-rate dining from a host of restaurants; and much more. Although these perks were part of the corporate culture that Larry and Sergey sought to develop, they also served another economic interest: employees were actually more productive – employees eating at Googleplex, or working out at the campus gym, were back at their computers more quickly than if they had dined out or used outside facilities. Employees could elect to come to work on limo busses decked with work-stations, wi-fi and food. In this environment, Google’s employees work hard and are very productive. In the scheme of things, Google is only just getting started and we are yet to see its full potential and power. Its core and founding

product, that is so heavily relied on today, stemmed from an initial idea that was cleverly and passionatly harnessed to create a vital tool that is used by millions of people everyday for a range of proffesional and personal reasons. Google is the ‘go-to’ search engine on the internet, however, the principles that surround its rise to the top can be applied every product and service, allowing them to also claim the much sougt-after status of a market leader. Daniel Alef is an award-winning novelist, former syndicated columnist, and author of more than 200 biographical profiles. Daniel is a former lawyer and CEO and his wide range of biographical profiles are available at Amazon, Apple’s iBookstore, Barnes & Noble, Kobo and Sony.


Australian Business Solutions Issue 20  

Australia's Leading Business Magazine. Feature story on Google.

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