- For the search engine produced by Google Inc., see Google.
| File:Google logo png.png | |
| Company type | Public (NASDAQ: GOOG) |
|---|---|
| Founded | Mountain View, California (1998) |
| Founder | Larry Page Sergey Brin  |
| Headquarters | Mountain View, California |
Key people | Eric E. Schmidt, CEO/Director Sergey Brin, Technology President Larry E. Page, Products President |
| Products | List of Google services and tools |
Number of employees | 1,000 est. (2004) |
| Website | www.google.com |
Google, Inc. Nasdaq: GOOG, is a U.S.-based corporation, established in 1998, that manages the Google search engine. Google is headquartered at the "Googleplex" in Mountain View, California, and employs over 1,000 workers. Dr. Eric Schmidt became Google's CEO (he was previously the CEO of Novell) when co-founder Larry Page stepped down.
History
Beginnings
Google began as a research project in early 1996 by Larry Page and Sergey Brin, two Stanford Ph.D. students who developed the theory that a search engine based on analysis of the relationships between Web sites would produce better results than the basic techniques then in use. It was originally nicknamed BackRub because the system checked backlinks to estimate a site's importance.
Convinced that the pages with the most links to them from other highly relevant Web pages must be the most relevant ones, Page and Brin decided to test their thesis as part of their studies, and laid the foundation for their search engine. They formally founded their company, Google, Inc., on September 7, 1998 at a friend's garage in Menlo Park, California. In February 1999, the company moved into offices at 165 University Avenue in Palo Alto, home of a number of other noted Silicon Valley technology startups. Google quickly outgrew the University Avenue site, moving to a complex of buildings (known by some as "The Googleplex") in Mountain View's Amphitheater Parkway later that year.
The Google search engine gained a following among Internet users for its simple, clean design and relevant search results. Advertisements were sold by the keyword so that they would be more relevant to the end user, and the ads were text-based in order to keep page design uncluttered and fast-loading. The concept of selling Keyword advertising was originally pioneered by Overture[1], formerly Goto.com. While many of its dot-com siblings went under, Google quietly rose in stature while turning a profit.
In September 2001, Google's ranking mechanism (PageRank) was awarded a U.S. Patent. The patent was officially awarded to Leland Stanford University and lists Lawrence Page as the inventor. [2]
In February 2003, Google acquired Pyra Labs, owner of Blogger, a pioneering and leading weblog-hosting Web site. The acquisition seemed inconsistent with the general mission of Google. However, the move secured the company's ability to use information gleaned from blog postings to improve the speed and relevance of articles contained in Google News.
At its peak in early 2004, Google handled upwards of 80 percent of all search requests on the world wide web through its Web site and clients like Yahoo!, AOL, and CNN.[3] Google's share fell in February 2004 when Yahoo! dropped Google's search technology in order to deliver independent results.
Google's declared code of conduct is Don't be evil. Their site includes humorous features such as cartoon modifications [4] of their logo for special occasions, the option to display the site in fictional or humorous languages such as Klingon and Leet, and April Fool's jokes about the company.
It is conjectured that Google's response to Yahoo will be personalized searches, using the personal data that is gathering from Orkut, Gmail, and Froogle to give results based on the individual. In fact, there is a Personalized Google SearchBeta in Google Labs, the experimental section of Google.com.
Etymology
The name "Google" is a play on the word googol, which was coined by Milton Sirotta, nephew of U.S. mathematician Edward Kasner in 1938, to refer to the number represented by 1 followed by a hundred zeros. Google's use of the term reflects the company's mission to organize the immense amount of information available on the Web.
Financing and IPO
Google's major investors are the venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital. In October 2003, while discussing a possible IPO (Initial Public Offering of shares), the company was approached by Microsoft about a possible partnership or merger; no such deal ever materialized.
In January 2004, Google announced the hiring of Morgan Stanley and Goldman Sachs Group to arrange an IPO. That IPO (one of the most anticipated in history) was projected to raise as much as $4 billion. According to a banker involved in the transaction, the deal would yield an estimated $12 billion market capitalization for Google.
On April 29, 2004, Google filed an S-1 form with the Securities and Exchange Commission for an IPO to raise as much as USD $2,718,281,828 (with a touch of mathematical humor). The filing revealed that Google turned a profit every year since 2001 and earned a profit of $105.6 million on revenues of $961.8 million during 2003.
In May 2004, Google officially cut Goldman Sachs from the IPO, leaving Morgan Stanley and Credit Suisse First Boston as the joint underwriters. They choose the unconventional way of allocation the initial offering through an auction (and specifically a "Dutch auction"), so that "anyone" would be able to participate in the offering. The smallest required account balances at most authorized online brokers that are allowed to participate in an IPO, however, are around $100,000. In the run-up to the IPO the company was forced to slash the price and size of the offering, but the process didn't run into any technical difficulties or result in any significant legal challenges. The initial offering of shares was sold for $85 a piece. The public valued it at $100.34 at the close of the first day of trading which saw 22,351,900 shares change hands.
After some initial stumbles, Google's initial public offering took place on August 19, 2004. 19,605,052 shares were offered at a price of $85 per share. Of that, 14,142,135 were floated by Google and 5,462,917 by selling stockholders. The sale raised $1.67 billion, of which approximately $1.2 billion went to Google. The vast majority of Google's 271 million shares remained under Google's control. The IPO gave Google a market capitalization of more than $23 billion. Many of Google's employees became instant paper millionaires. Ironically Yahoo! also benefited from the IPO because it owns 2.7 million shares of Google. The company was listed on the NASDAQ stock exchange under the ticker symbol GOOG.
Since the IPO, Google's stock market capitalization has risen to $50 billion as the stock price has doubled. On August 19 2004 the number of shares outstanding was 172.85 million while the "free float" was 19.60 million (which makes 89% held by insiders). In January 2005 the shares outstanding was up 100 million to 273.42 million, 53% of that was held by insiders which made the float 127.70 million (up 110 million shares from the first trading day). The two founders are said to hold almost 30% of the outstanding shares. The company has not reported any treasury stock holdings as of the Q3 2004 report.
Salaries at Google Inc.
The basic salaries at Google are considered low by some. For instance, system administrator earn no more than $33,000-37,000, which some argue to be pretty low especially by Bay Area standards.
Google and the law
A number of organizations (most controversially the Church of Scientology) have used the Digital Millennium Copyright Act to demand that Google remove references to allegedly copyrighted material on other sites. Google typically handles this by removing the link as requested and including a link to the complaint in the search results. There have also been complaints that the "Google cache" feature violates copyright. However, the consensus seems to be that caching is a normal part of the functionality of the web, and that HTTP provides adequate mechanisms for requesting that caching be disabled (which Google respects; it also honors the robots.txt file which is a mechanism to allow the owners of a site to request that part or all of their site not be included in search engine listings).
In 2002, news reports surfaced that the Google search engine had been banned in China. A mirror site (in all respects, including mirrored text) called elgooG proved useful to get around the ban. The ban was later lifted, and reports indicated that it was not Google itself that was targeted. Rather, Google's feature of a cached version of a Web site would allow Chinese users to circumvent any ban of a Web site itself, merely by visiting the cache instead. There is also a dynamic Google mirror working as a proxy server at http://www.zensur.freerk.com/google/. [5]
Google's efforts to refine its database has led to some legal controversy, drawing a lawsuit in October 2002 from a company, SearchKing, that sought to sell advertisements on pages with inflated Google rankings. In its defense, Google said that its rankings are its constitutionally protected opinions of the web sites that it lists. A judge threw out SearchKing's lawsuit in mid-2003 on precisely these grounds.
In late 2003 and early 2004, there were persistent rumors that Google would be sued by the SCO Group over its use of the Linux operating system, in conjunction with SCO's lawsuit against IBM over the ownership of intellectual property rights relating to Linux.
In May 2004, the Baltimore Sun interviewed Peri Fleisher, a great-niece of Edward Kasner, the mathematician whose nephew coined the word googol, who said Kasner's descendants were "exploring" legal action against Google due to its name. [6]
Google recently settled a patent infringement lawsuit with Yahoo! by issuing 2.7 million shares. Yahoo! had earlier alleged that Google's Ad Sense program violated a patent held by Yahoo!'s Overture unit. The settlement cost Google around $275 million which resulted in the company posting a net loss in the third quarter of 2004.
Management
Job: name, age, pay
- CEO: Eric E. Schmidt, 49, $554.00K
- CFO: George Reyes, 50, ?
- President of Technology: Sergey Brin, 30, $370.00K
- President of Products: Larry E. Page, 31, $367.00K
- Sr. VP: Omid Kordestani, 40, $572.00K
Analysts
Research analyst covering Google Inc. See also GOOG: Star Analysts for GOOGLE - Yahoo! Finance
- Tinker, John (Thinkequity Partners)
- Gallant, Michael (CIBC World Markets)
- Weinstein, Steve (Pacific Crest Securities)
- Khan, Imran (J.P. Morgan Chase)
- Terry, Heath (Credit Suisse First Boston)
- Wolk, Marianne (Susquehanna Financial Group)
Corporate culture
Philosophy
Google is known for its relaxed corporate culture, reminiscent of the Dot-com boom. Google's corporate philosophy is based on many casual principles including, "You can make money without doing evil", "You can be serious without a suit" and "work should be challenging and the challenge should be fun." A complete list of corporate fundamentals is available on Google's web site [7]. The company encourages equality along the corporate levels and tells its employees to work on a personal project one day a week. Twice a week there is a roller hockey game in the company parking lot.
The Googleplex's lobby (Google headquarters) is decorated with a piano, lava lamps and a real time projection of current search queries. The hallways are full of exercise balls and bicycles. Each employee has a Linux workstation and access to the corporate recreation center. The recreation center includes a workout room with weights and rowing machines, locker rooms, washers and dryers, a massage room, assorted video games, Foosball, a baby grand piano, a pool table and ping pong. In addition to the rec room, there are snack rooms stocked with various cereals, gummy bears, M&Ms, toffee, licorice, cashews, yogurt, carrots, fresh fruit, and dozens of different drinks including fresh juice, soda and make-your-own cappuccino. After eating, people can relieve themselves on digital toilets similar to Japanese toilets.
IPO and culture
Many people have suggested that after Google's IPO their culture will not be able to stay so "fun" and focused on the future.[8] [9] The company may be required to answer to shareholders who will want the company to cut back on employee benefits and to focus on short term advances. Also, it may be hard to maintain a collegial atmosphere when some of the employees are paper-millionaires. In a report given to potential investors, co-founders Sergey Brin and Larry Page promised that the IPO would not change the company's culture. Later Mr. Page said, "We think a lot about how to maintain our culture and the fun elements."
Collaboration with WikiMedia Foundation
On February 11, 2005, news [10] was released that discussions are in progress over the possibility of Google hosting a section of the WikiMedia Foundation's (Wikimedia) information on Google's own servers. The two groups will meet in March to further discuss this possibility.
External links
Corporate information
Conference calls
- October 21, 2004 - Q3 2004 earnings conference call (presentation) (audio)