Google

Google Inc. (NASDAQ symbol: GOOG) has built a busi-ness colossus by focusing on helping users find what they are looking for on the Internet while selling advertising targeted at those same users. By 2006, “to google” could be found in dictionaries as a verb meaning to look up anyone or anything online.

Google was founded by two Stanford students (see Brin, Sergey and Page, Larry) who, for their doctoral thesis, had described a Web search algorithm that could give a bet-ter idea of the likely relevance of a given site based on the number of sites that linked to it. The two students imple-mented a search engine based on their ideas and hosted it on the Stanford Web site, where its popularity soon irri-tated the university’s system administrators. In 1998 their business was incorporated as Google, Inc., and moved to the archetypal Silicon Valley entrepreneur’s location—a friend’s garage. However, as the company attracted invest-ment capital and grew rapidly, it moved to Palo Alto and then its present home in Mountain View.

Google’s initial public stock offering was in 2004, and the market’s enthusiastic response made many senior employees instant millionaires. Google’s steady growth in subsequent years has kept its stock in demand, reaching a record peak of $560 in September 2007. (In 2006 Google was added to the S&P 500 Index.)

Search and Its Larger Context

People tend to think of Google as a search engine. Actu-ally, it is better to think of it as an ever-expanding net-work of Web-based services that include general and specialized searches but also tools for content creation and collaboration.

It is true that search and the accompanying advertising are the core of Google’s revenue and thus the engine that drives its proliferation. In 2000 Google adopted keyword-based advertising. (This was not a new idea, but Google was the first to really make it work.) Basically, advertisers bid for the right to have their ad accompany the results of a search that contains a given word, on a per “click through” basis—that is, how often the user clicks on the ad to go to the advertiser’s site. Advertisers are prioritized according to how much they bid, their previous click-through rate, and their ad’s relevance to the search. If someone searches, for example, “widget” and Acme Widget Co. is in line for placement, the Acme ad is shown. If the user then clicks on it, Acme makes a payment to Google (and hopes to some business).

The power of keyword-based and other “contextual” advertising is that, by definition, any accompanying ad is targeted to someone who is quite probably already look-ing for what one is selling. And what makes this such a revenue-maker for Google is that, since the company serves over half of all Web searches, anyone wanting an ad to reach the biggest share of its potential audience will have to turn to Google.

Google’s ability to offer more precisely targeted advertis-ing has been enhanced in several ways:

•  AdSense, which can be installed on a Web site where it displays ads keyed to the site’s content. Revenue is shared by Google and the site owner.

•  Advertisers can specify an AdWord and Google will place it on participating sites in its “content network” that it believes are relevant. The advertiser pays per thousand viewings of the ads (“impressions”).

•  Specialized shopping-oriented searches such as Google Product Search, which returns lists of sellers and a price comparison.

•  Searches can also be local (particularly useful for mobile devices) and results can be keyed to maps.

Other Applications

Google has greatly expanded beyond its core business of search and accompanying advertising. In general, the com-pany has been emphasizing acquiring or developing tools that help users create content and collaborate. These offer-ing include:

•  Blogger, an easy-to-use blogging tool (see blogs and blogging)

•  JotSpot, developer of wiki collaboration tools (see wikis and Wikipedia)

•  YouTube, the largest video-sharing service, acquired by Google in 2006 (see YouTube)

•  Gmail, a free e-mail service

•  Google Apps, which provides a Web-based office envi-ronment including a calendar and Google Docs & Spreadsheets. (The standard edition is free and repre-sents a competitive challenge for Microsoft Office, par-ticularly for small businesses and simpler applications.)

In addition to office and collaboration tools, Google has several other prominent applications that do not easily fit in one category:

•  google News provides a constantly updated newspa-perlike format that groups stories under headlines.

•  google Book Search offers access to thousands of public-domain books and summaries or limited pre-views of copyrighted works (see e-books and digital libraries)

•  Google Maps and Google Earth are vast troves of map information, satellite imagery, and even street-level views of some cities.

A key to the growth of Google’s new Web services is that many of them come with programming interfaces that can be used to integrate them into Web sites and applications. It is relatively easy, for example, to combine maps and data about stores or other locations (see mashups).

Criticism

As of mid-2008 Google had more than 19,500 full-time employees. The company’s workplace culture at its Moun-tain View “Googleplex” is famous for its gourmet food, elaborate recreation center, and other perks. (In 2007 For-tune magazine rated Google first in the nation as a place to work.)

Google has a market capitalization of about $180 billion, ahead of such giants as Hewlett-Packard and IBM. In 2008 Google took in $16.6 billion, with $4.2 billion in profit. Google’s impact on the online world has been immense. As of mid-2007 Google was processing 54 percent of all Internet search requests, followed distantly by Yahoo! at 20 percent and Microsoft at 13 percent.

Google sets a high standard for itself. Its mission state-ment is “to organize the world’s information and make it universally accessible and useful.” A corporate motto is “don’t be evil” in the pursuit of success. A number of critics have suggested, however, that Google has fallen short of its standards in a number of respects:

•  google Book Search had led to accusations of copy-right violations by publishers and authors. Google has also been accused of benefiting from rampant copying of copyrighted content on its YouTube subsidiary.

•  Google has been criticized for aiding China in censor-ing search results (see censorship and the Internet).

•  The detailed imagery available from Google Earth has been criticized by some nations on security grounds, and street-level views have raised privacy questions.

•  Some Google practices, including the extensive use of cookies and analysis of users’ e-mail and other con-tent, have also aroused privacy concerns (see cook-ies and data mining). 

•  Google has also been criticized for keeping its Page¬ Rank system secret, making it hard to determine if it is treating users fairly.

In 2007 Google acquired DoubleClick for $3.1 billion. Although the combination of the leading search company and a major online advertising service provoked concerns about a possible monopoly, the acquisition was approved by U.S. and European regulators.

While Google continues to be a subject of both admira-tion and debate, it is clear that it has placed powerful tools and enormous new resources in the hands of Web users around the world.