
Google's Toughest Search Is for a Business Model (2002) - ghosh
http://www.nytimes.com/2002/04/08/business/google-s-toughest-search-is-for-a-business-model.html
======
drb311
"Google is a technology-driven company -- one founded by computer science
prodigies who have hired more than 50 computer science Ph.D.'s."

In 2002 this was weird.

Internet entrepreneurs were not expected to be compsci Ph.Ds back then.

AVC discussed a new kind of tech CEO recently:

"The new tech CEO archetype is a computer scientist who got into product
management early in their career, led large product teams at a big important
tech company, is in their 40s, and has great taste in technology, tech talent,
and most of all tech products."

Google was one of the first internet businesses to succeed big with computer
scientists at the top, leading product.

 __EDIT, again: __

Google is quite a different beast from Sun, SGI, or Viacom. You might disagree
but that 's OK. Somebody is always wrong on the Internet.

2002 was shortly after the dotcom bubble. Nobody knew what was going on or
going to happen. The rise of computer scientist lead consumer-facing tech
companies would have surprised people who had expected Pets.com to rule the
world.

As the NYT article noted, Google was swimming against the tide at the time.
History has proved them right.

~~~
melling
SGI was pretty big.

[https://en.m.wikipedia.org/wiki/Silicon_Graphics,_Inc](https://en.m.wikipedia.org/wiki/Silicon_Graphics,_Inc).

~~~
drb311
You're right. I should have said "first internet businesses", and now I have.

I could still be totally wrong, but at least now it's genuine ignorance not a
typing mistake.

~~~
diego
Google was really part of the second wave of successful internet businesses,
including search. Yahoo was going public as Google was getting started.
Inktomi was worth over 20B at some point, in fact I was there when the company
had an opportunity to acquire Google and said no.

------
smacktoward
Most of the comments here assume that this is a story that eventually had a
happy ending, but I'm not 100% sure that's true.

Google eventually did find its business model in AdWords, of course, which
moved the company from the fringes of the online advertising market to its
heart. But the logic of advertising as a business model eventually led them to
have to reject a lot of the things that early Google held sacred.

Back in Ye Olden Days, for instance, that if you looked at Google's "Ten
Things We Know To Be True" manifesto
([http://www.google.com/about/company/philosophy/](http://www.google.com/about/company/philosophy/)),
you would find a flat statement that one thing Google would _never_ do was
provide content like stock quotes and weather reports. Why? Because being the
place people went for stock quotes and weather reports was how Yahoo did
things, and early Google went out of its way to let you know that it was not
going to be Yahoo. Yahoo was a big, messy, unfocused portal; Google was laser-
focused on one thing and one thing only, search.

But then came advertising, and suddenly the logic that had led Yahoo into all
those niches led Google right into them too. The advertiser's dream, of
course, is to be in every last place where people turn their eyeballs; and
things like stock quotes and weather reports aren't sexy computer science
problems, but they _are_ looked at. So Google quietly dropped that language
from the "Ten Things" document and started Yahoo-ing themselves up.

Fast forward a decade-plus, and like kudzu, Google has slowly expanded into a
million niches nobody back then could have foreseen. It's in my maps and my
phone and my TV and my car; it's _everywhere._

In other words, Google found success by becoming the thing they originally
positioned themselves as never wanting to be. Which turned out to be a pretty
good business model! But it's also one of the hardest pivots in the history of
pivoting.

~~~
jonnathanson
A key difference is how the two companies approached their nichification.
Yahoo took a kitchen-sink approach——trying to cram every category link into
its homepage, in the process transforming itself into a cluttered mess, and
ultimately defeating its core purpose as a search engine: to make things easy
to find.

Google, on the other hand, kept its homepage relatively clean and simple. It
held to the belief that the search query should be the point of entry in any
session, and that nothing should stand between the user and her query.

Basically, Google never tried to become a portal. The SERPs may have changed
dramatically over the years, but the starting point is (more or less) the
same.

 _" It's in my maps and my phone and my TV and my car; it's everywhere."_

That's because various devices are supplanting the web browser as points of
entry into the internet under specific circumstances. Google's integration
into those apps and devices is its attempt to maintain its position as the
internet's de facto user interface. (It's also a good way to collect and
organize information from the ever-growing, ever-diverging set of sources
_generating_ information.) Whichever way the internet goes, Google needs to go
with it.

------
vonnik
13 years later, Google could say that about The New York Times.

~~~
frogpelt
But the headline wouldn't be near as catchy.

~~~
tdaltonc
"The Headline at The New York Times is 'How are We Paying For this?'"

------
SandersAK
I think what's most telling about this article is how little people outside of
tech understood about the internet. I guess the dot com crash helped with the
FUD, but the takeaway for me is that usually news orgs are behind when trying
to understand where tech is going, and their insight can be stunted because of
this.

~~~
dkrich
That's interesting, because I actually found the article pretty impressive
considering the timing. It's easy to look back 13 years later and laugh at the
title, but some of the finer points were pretty insightful. Many parts of the
article are very foretelling, even if they weren't the personal opinion of the
author.

For example, pointing out that using text ads over graphical ones improved the
speed and was an important aspect for users is noteworthy, as well as Brin and
Page's insistence that focusing on the technology would bring users and, in
turn, ad revenue is as well. This article was written just a couple of years
after a major crash of tech stocks that had absolutely no way to make a buck,
so some skepticism was in order, I believe. In fact the vast majority of
.com's were not profitable so it's not as if a company that at the time was
trailing Yahoo! and Overture and barely profitable was inevitably going to
become the Google we know today.

~~~
SandersAK
Yeah maybe part of it is hindsight on my end. I agree that the FUD is because
of the crash.

------
fidotron
What's amazing about Google is how problematic the quest for new business
models is for them in spite of their advantages, and they are almost cursed by
their success in one domain polluting the others.

But their really large problem is they're too smart and strategic for their
own good. If you look at the ecosystems they construct the only long term
winner in them is Google, and other companies are now highly aware of this.

~~~
minthd
>> only long term winner in them is Google, and other companies are now highly
aware of this.

Actually Samsung did very well on android, probably much better than if Google
hasn't shared android with them.

Ass for small companies working on their ecosystems(app authors, youtube
creators, site owners),those are decent ecosystems, and generally Google is
not worse than any other large ecosystem owner.

~~~
fidotron
Samsung clearly do not share that opinion, and justifiably so.

For other partners, for example Chromebook makers or YouTube, Google is worse
than others for the simple reason they work to make everyone else they're
working with interchangeable with someone else they're working with, resulting
in near perfect competition with them as the gatekeepers. Today's YouTube
stars have brands, but they are second in the customer relationship position
behind YouTube. The likes of Apple certainly do get themselves in the mix
here, but Apple prefer to use their leverage to compete against another
ecosystem as opposed to setting their own off against each other.

One of the biggest changes in the tech industry in the last ten years is the
wider appreciation of the need to own your own customer relationship, and to
prevent others from grabbing yours.

~~~
minthd
>> Samsung clearly do not share that opinion, and justifiably so.

And Samsung would be wrong.If Google hasn't decide to add Samsung to android,
it's very likely that Samsung would be in somewhat similar fate to that of
microsoft. But Google did share it with them , and they did make lots of
money, and probably still do.

Sure they would want more, and more control, etc. And android is a tough
business. But still Open Android was a great thing for Samsung.

As for Apple behaving better towards their partners - it's hard to tell ,
because they target a different customer segment than android so the dynamic
is different.

But if you look at every big company - MS, Amazon, Wireless carriers -
commoditizing a complement is a very common technique.

------
pinaceae
they had soemthing that attracted a lot of eyeballs, but nobody wanted to pay
for.

using ads as a substitue for micro-transaction was a brilliant idea, made
google possible.

and ever since then, no other venture/product coming out of google has reached
even a fraction of that revenue. you could argue that the alphabet split is
not honest enough. core google should have been the ad engine, that's it. the
one real, tough business they're operating. the rest seems like a PhD
playground with not a lot of accountability.

whoever at google really had the idea for ads is the true genius behind their
success.

~~~
minthd
>> and ever since then, no other venture/product coming out of google has
reached even a fraction of that revenue.

That's not true. They started with search ads, expanded successfully to
various types of display ads, and now their video business(youtube) and the
android app store making 15% of Google's revenues.

>> the rest seems like a PhD playground with not a lot of accountability

Maybe public(i.e wall street) accountability isn't the correct model for long
term r&d.But technology wise, they do seem to get lots of work done, often in
areas with few/no strong competitors, on problems that will be worth lots of
and with time that could mean lots of revenue.And i don't know of a better way
to judge the commercial value of long term r&d.

~~~
pinaceae
how does youtube make money for google? ads.

------
punee
[2002]

------
karpodiem
Ads subsidize the existential 'can we try to solve this before we die'
projects that Larry and Sergey consume themselves with.

Those projects were starting to weigh down Google's bottom line. Alphabet was
a reaction to this in that - 'ok brainiacs at these side projects; you have a
limited window to become remotely self sufficient; this won't go on subsidized
forever'.

But again, most of Google's other web products are subsidized by ads. Google
is _trying_ to become a pay-first product company, but they really have a
disdain for support - they hate support. It's going to be interesting to see
Google try and become a product company if the ad spigot starts to slow.

~~~
karpodiem
downvotes - truth hurts.

