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Google
Google Inc.
Type Public (NASDAQ: GOOG), (LSE: GGEA)
Founded Flag of United States Menlo Park, California (September 27,
1998)
Headquarters Mountain View, California, USA
Key people Eric E. Schmidt, CEO/Director
Sergey Brin, Co-Founder, Technology President
Larry E. Page, Co-Founder, Products President
George Reyes, CFO
Industry Internet, Computer software
Products See list of Google products
Revenue 10.604 Billion USD (2006)[1]
Net income 3.077 Billion USD (2006)[1]
Employees 12,238 (March 31, 2007)
Website www.google.com
Google Inc. (NASDAQ: GOOG and LSE: GGEA) is an American public
corporation, specializing in Internet searching and online advertising.
The company is based in Mountain View, California, and has 12,238
full-time employees (as of March 31, 2007).[2] Google's mission
statement is, "to organize the world's information and make it
universally accessible and useful."[3] Google's corporate philosophy
includes statements such as "Don't be evil", and "Work should be
challenging and the challenge should be fun", illustrating a somewhat
relaxed corporate culture.
Google was co-founded by Larry Page and Sergey Brin while they were
students at Stanford University and the company was first incorporated
as a privately held company on September 7, 1998. Google's initial
public offering took place on August 19, 2004, raising $1.67 billion,
making it worth $23 billion. Through a series of new product
developments, acquisitions and partnerships, the company has expanded
its initial search and advertising business into other areas, including
web-based email, online mapping, office productivity, and video sharing,
among others.
Like most large corporations, Google's businesses have drawn some
controversy, such as copyright disputes in its book search project, or
censorship by Google of search results as it works with countries such
as France, Germany, and China -- each of whom have laws requiring the
company hide information from Google users in their country.
Additionally, in the post September 11 era, several governments and
militaries have raised concerns about the national security risks posed
by vivid geographic details provided by Google Earth's satellite
imaging. However, it should be noted that all of the images and details
visible in Google Earth are available through other public, free
sources; Google Earth does, however, make it easier to access.
History
Google began as a research project in January 1996 by Larry Page and
Sergey Brin, two Ph.D. students at Stanford University, California.[4]
They hypothesized that a search engine that analyzed the relationships
between websites would produce better results than existing techniques,
which ranked results according to the number of times the search term
appeared on a page.[5] Their search engine was originally nicknamed, "BackRub"
because the system checked backlinks to estimate a site's importance.[6]
A small search engine called Rankdex was already exploring a similar
strategy.[7]
Convinced that the pages with the most links to them from other highly
relevant web pages must be the most relevant pages associated with the
search, Page and Brin tested their thesis as part of their studies, and
laid the foundation for their search engine. Originally the search
engine used the Stanford University website with the domain
google.stanford.edu. The domain google.com was registered on September
14, 1997, and the company was incorporated as Google Inc. on September
7, 1998 at a friend's garage in Menlo Park, California. The total
initial investment raised for the new company eventually amounted to
almost $1.1 million, including a $100,000 check by Andy Bechtolsheim,
one of the founders of Sun Microsystems.[8]
In March 1999, the company moved into offices at 165 University Avenue
in Palo Alto, home to several other noted Silicon Valley technology
startups.[9] After quickly outgrowing two other sites, the company
leased a complex of buildings in Mountain View at 1600 Amphitheatre
Parkway from Silicon Graphics (SGI) in 1999.[10] The company has
remained at this location ever since, and the complex has since become
known as the Googleplex (a play on the word googolplex, a 1 followed by
a googol of zeros). In 2006, Google bought the property from SGI for
$319 million.[11]
The Google search engine attracted a loyal following among the growing
number of Internet users, who liked its simple design.[12] In 2000,
Google began selling advertisements associated with search keywords.[4]
The ads were text-based to maintain an uncluttered page design and to
maximize page loading speed.[4] Keywords were sold based on a
combination of price bid and clickthroughs, with bidding starting at
$.05 per click.[4] This model of selling keyword advertising was
pioneered by Goto.com (later renamed Overture Services, before being
acquired by Yahoo! and rebranded as Yahoo! Search
Marketing).[13][14][15] While many of its dot-com rivals failed in the
new Internet marketplace, Google quietly rose in stature while
generating revenue.[4]
The name "Google" originated from a misspelling of "googol,"[16][17]
which refers to 10100 (the number represented by a 1 followed by
one-hundred zeros). Having found its way increasingly into everyday
language, the verb, "google", was added to the Merriam Webster
Collegiate Dictionary and the Oxford English Dictionary in 2006,
meaning, "to use the Google search engine to obtain information on the
Internet."[18][19]
A patent describing part of Google's ranking mechanism (PageRank) was
granted on September 4, 2001.[20] The patent was officially assigned to
Stanford University and lists Lawrence Page as the inventor.
Financing and initial public offering
The first funding for Google as a company was secured in the form of a
USD100,000 contribution from Andy Bechtolsheim, co-founder of Sun
Microsystems, given to a corporation which did not yet exist.[21] Around
six months later, a much larger round of funding was announced, with the
major investors being rival venture capital firms Kleiner Perkins
Caufield & Byers and Sequoia Capital.[21]
Google's initial public offering took place on August 19, 2004.
19,605,052 shares were offered at a price of $85 per share.[22] Of that,
14,142,135 (another mathematical reference as √2 ≈ 1.4142135) were
floated by Google and 5,462,917 by selling stockholders. The sale raised
$1.67 billion, and gave Google a market capitalization of more than $23
billion.[23] The vast majority of Google's 271 million shares remained
under Google's control. Many of Google's employees became instant paper
millionaires. Yahoo!, a competitor of Google, also benefited from the
IPO because it owns 2.7 million shares of Google.[24]
Google's post-IPO stock performance has been very good as well, with
shares surging to $500 by 2007, due to strong sales and earnings in the
advertising market, as well as the release of new features like the
desktop search function and personalized home page.[25] The surge in
stock price is fueled primarily by individual investors, as opposed to
large institutional investors and mutual funds.[25]
The company is listed on the NASDAQ stock exchange under the ticker
symbol GOOG.
Growth
While the company's primary market is in the web content arena, Google
has begun to experiment with other markets, such as radio and print
publications. On January 17, 2006, Google announced that it had
purchased the radio advertising company dMarc, which provides an
automated system that allows companies to advertise on the radio.[26]
This will allow Google to combine two niche advertising media—the
Internet and radio—with Google's ability to laser-focus on the tastes of
consumers. Google has also begun an experiment in selling advertisements
from its advertisers in offline newspapers and magazines, with select
advertisements in the Chicago Sun-Times.[27] They have been filling
unsold space in the newspaper that would have normally been used for
in-house advertisements.
Google was added to the S&P 500 index on March 30, 2006. Google replaced
Burlington Resources, a major oil producer based in Houston which was
acquired by ConocoPhillips.
Acquisitions
Since 2001, Google has acquired several small start-up companies, often
consisting of innovative teams and products. One of the earlier
companies that Google bought was Pyra Labs. They were the creators of
Blogger, a weblog publishing platform, first launched in 1999. This
acquisition led to many premium features becoming free. Pyra Labs was
originally formed by Evan Williams, yet he left Google in 2004. In early
2006, Google acquired Upstartle, a company responsible for the online
word processor, Writely. The technology in this product was used by
Google to eventually create Google Docs & Spreadsheets.
In February 2006, software company Adaptive Path sold Measure Map, a
weblog statistics application, to Google. Registration to the service
has since been temporarily disabled.
In late 2006, Google bought online video site YouTube for $1.65 billion
in stock.[28] Shortly after, on October 31, 2006, Google announced that
it had also acquired JotSpot, a developer of wiki technology for
collaborative Web sites.[29]
On April 13, 2007, Google reached an agreement to acquire DoubleClick.
Google agreed to buy the company for $3.1 billion.[30]
Partnerships
In 2005, Google entered into partnerships with other companies and
government agencies to improve production and services. Google announced
a partnership with NASA Ames Research Center to build up 1 million
square feet of offices and work on research projects involving
large-scale data management, nanotechnology, distributed computing, and
the entrepreneurial space industry.[31] Google also entered into a
partnership with Sun Microsystems in October to help share and
distribute each other's technologies.[32] The company entered into a
partnership with Time Warner's America Online,[33] to enhance each
other's video search services.
In 2006, Google and News Corp.'s Fox Interactive Media entered into a
$900 million agreement to provide search and advertising on the popular
social networking site, MySpace.[34]
Products
Google has created services and tools for the general public and
business environment alike; including Web applications, advertising
networks and solutions for businesses.
Advertising
Most of Google's revenue is derived from its online advertising
programs.[35] Google AdWords allows Web advertisers to display
advertisements in Google's search results and the Google Content
Network, through either a cost-per-click or cost-per-view scheme. Google
AdSense website owners can also display adverts on their own site, and
earn money every time ads are clicked.
Applications
Google is well-known for its web search service, which is a major factor
of the company's success. As of December 2006, Google is the most used
search engine on the web with a 50.8% market share, ahead of Yahoo!
(23.6%) and Windows Live Search (8.4%).[36] Google indexes billions of
Web pages, so that users can search for the information they desire,
through the use of keywords and operators. Google has also employed the
Web Search technology into other search services, including Image
Search, Google News, the price comparison site Google Product Search,
the interactive Usenet archive Google Groups, Google Maps and more.
In 2004, Google launched its own free web-based email service, known as
Gmail.[37] Gmail features spam filtering technology and the capability
to use Google technology to search email. The service generates revenue
by displaying advertisements from the AdWords service that are tailored
to the content of the email messages displayed on screen.
In early 2006, the company launched Google Video, which not only allows
users to search and view freely available videos, but also offers users
and media publishers the ability to publish their content, including
television shows on CBS, NBA basketball games, and music videos.[38]
Google has also developed several desktop applications, including Google
Earth, an interactive mapping program powered by satellite imagery that
covers the vast majority of the earth. Google Earth is generally
considered to be remarkably accurate and extremely detailed. For
example, some major cities (Las Vegas, NV, USA for example) have such
detailed images that one can zoom in close enough to read the license
plates on cars on a street. Consequently, there have been some concerns
about national security implications. Specifically, some countries and
militaries contend the software can be used to pinpoint with
near-precision accuracy the physical location of critical
infrastructure, commercial and residential buildings, bases, government
agencies, and so on. However, the satellite images are not necessarily
frequently updated, and all of them are available at no charge through
other products and even government sources (NASA and the National
Geospatial-Intelligence Agency, for example.) Some counter this argument
by stating that Google Earth makes it easier to access and research the
images.
Many other products are available through Google Labs, which is a
collection of incomplete applications that are still being tested for
use by the general public.
Google has promoted their products in various ways. In London, Google
Space was set-up in Heathrow Airport, showcasing several products,
including Gmail, Google Earth and Picasa.[39][40] Also, a similar page
was launched for American college students, under the name College Life,
Powered by Google.[41]
In 2007, some reports surfaced that Google was planning the release of
its own mobile phone, possibly a competitor to Apple's iPhone.[42][43][44]
The project may be a collaboration between Google and Orange, HTC,
Samsung, or another manufacturer. However, very little is known about
the project and most of the information available is speculation.
Enterprise products
In 2007, Google launched Google Apps Premium Edition, a software suite
for businesses that provides e-mail, instant messaging, calendar, word
processing, as well as a spreadsheet program.[45] This product is
targeted primarily at the business user, and intended to compete
directly versus Microsoft's Office suite, with a price of approximately
USD50 per user per year compared to USD500 per user for Microsoft
Office.[45] A large implementation of Google Apps with 38,000 users is
at Lakehead University in Thunder Bay, Ontario, Canada.[46]
Platform
Google's services are run on several server farms, each consisting of
thousands of low-cost commodity computers running stripped-down versions
of Linux. While the company does not provide detailed information about
its hardware, a 2006 estimate consisted of over 450,000 servers, racked
up in clusters located in data centers around the world.[47]
Corporate affairs and culture
Google is particularly known for its relaxed corporate culture,
reminiscent of the Dot-com boom. In January 2007, it was cited by
Fortune Magazine as the #1 (of 100) best company to work for.[48]
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 website.[49] Google's relaxed corporate culture can also be
seen externally through their holiday variations of the Google logo.
Typical salaries at Google are considered to be quite low by industry
standards. For example, some system administrators earn no more than
$35,000 per year – considered to be quite low for the Bay Area job
market.[50] However, Google's stock performance following its IPO has
enabled many early employees to be competitively compensated by
participation in the corporation's remarkable equity growth.[51] Google
implemented other employee incentives in 2005, such as the Google
Founders' Award, in addition to offering higher salaries to new
employees. Google's workplace amenities, culture, global popularity, and
strong brand recognition have also attracted potential applicants.
After the company's IPO in August 2004, it was reported that founders
Sergey Brin and Larry Page, and CEO Eric Schmidt, requested that their
base salary be cut to $1.00.[52] Subsequent offers by the company to
increase their salaries have been turned down, primarily because, "their
primary compensation continues to come from returns on their ownership
stakes in Google. As significant stockholders, their personal wealth is
tied directly to sustained stock price appreciation and performance,
which provides direct alignment with stockholder interests."[52] Prior
to 2004, Schmidt was making $250,000 per year, and Page and Brin each
earned a salary of $150,000.[52]
They have all declined recent offers of bonuses and increases in
compensation by Google's board of directors. In a 2006 report of the
United States' richest people, Forbes reported that Sergey Brin was #12
with a net worth of $14.1 billion, and Larry Page was #13 with a net
worth of $14.0 billion.[53]
Googleplex
As a play on Google's name, its headquarters, in Mountain View,
California, is referred to as "the Googleplex" — a googolplex being 1
followed by a googol of zeros, and the HQ being a complex of buildings
(cf. multiplex, cineplex, etc). The lobby is decorated with a piano,
lava lamps, old server clusters, and a projection of search queries on
the wall. The hallways are full of exercise balls and bicycles. Each
employee has access to the corporate recreation center. Recreational
amenities are scattered throughout the campus and include 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, toffee, licorice, cashews,
yogurt, carrots, fresh fruit, and dozens of different drinks including
fresh juice, soda, and make your own cappuccino. In October 2006, the
company announced plans to install thousands of solar panels to provide
up to 1.6 megawatts of electricity, enough to satisfy approximately 30%
of the campus' energy needs.[54] The system will be the largest solar
power system constructed on a U.S. corporate campus and one of the
largest on any corporate site in the world.[54]
In 2006, Google moved into 311,000 square feet of office space in New
York City, at 111 Eighth Ave. in Manhattan.[55] The office was specially
designed and built for Google and houses its largest advertising sales
team, which has been instrumental in securing large partnerships, most
recently deals with MySpace and AOL.[55] In 2003, they added an
engineering staff in New York City, which has been responsible for more
than 100 engineering projects, including Google Maps, Google
Spreadsheets, and others.[55] It is estimated that the building costs
Google $10 million per year to rent and is similar in design and
functionality to its Mountain View headquarters, including Foosball, air
hockey, and ping-pong tables, as well as a video game area.[55]
"Twenty percent" time
All Google engineers are encouraged to spend 20% of their work time (one
day per week) on projects that interest them. Some of Google's newer
services, such as Gmail, Google News, Orkut, and AdSense originated from
these independent endeavors.[56] In a talk at Stanford University,
Marissa Mayer, Google's vice president of search products and user
experience, stated that her analysis showed that half of new product
launches originated from 20% time.[57]
Easter eggs and April Fool's Day jokes
Google has a tradition of creating April Fool's Day jokes — such as
Google MentalPlex, which allegedly featured the use of mental power to
search the web.[58] In 2002, they claimed that pigeons were the secret
behind their growing search engine.[59] In 2004, they featured Google
Lunar (which claimed to feature jobs on the moon),[60] and in 2005, a
fictitious brain-boosting drink, termed Google Gulp was announced.[61]
In 2006, they came up with Google Romance, a hypothetical online dating
service.[62] In 2007, Google announced two joke products. The first was
a free wireless Internet service called TiSP (Toilet Internet Service
Provider) [63] in which one obtained a connection by flushing one end of
a fiber-optic cable down their toilet and waiting only an hour for a
"Plumbing Hardware Dispatcher (PHD)" to connect it to the Internet.[63]
Additionally, Google's Gmail page displayed an announcement for Gmail
Paper, which allows users of their free email service to have email
messages printed and shipped to a snail mail address.[64]
Some thought the announcement of Gmail in 2004 around April Fool's Day
(as well as the doubling of Gmail's storage space to two gigabytes in
2005) was a joke, although both of these turned out to be genuine
announcements. In 2005, a comedic graph depicting Google's goal of
"infinity plus one" GB of storage was featured on the Gmail homepage.
Google's services contain a number of Easter eggs; for instance, the
Language Tools page offers the search interface in the Swedish Chef's
"Bork bork bork," Pig Latin, ”Hacker” (Actually leetspeak), Elmer Fudd,
and Klingon.[65] When asked how to get from a location in the U.S. to a
location in Europe, Google Maps will provide directions that include an
instruction to "Swim across the Atlantic Ocean." [66] In addition, the
search engine calculator provides The Answer to Life, the Universe, and
Everything from Douglas Adams' The Hitchhiker's Guide to the Galaxy.[67]
Google also likes to change their logos on special days, such as on
Christmas the logo is a frosted snowy scene, in the 2006 winter Olympics
in Turin, the logo was a skiing scene and it stayed like this throughout
the duration of the Olympics.[68]
IPO and culture
Many people speculated that Google's IPO would inevitably lead to
changes in the company's culture,[69] because of shareholder pressure
for employee benefit reductions and short-term advances, or because a
large number of the company's employees would suddenly become
millionaires on paper. 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.[70] Later Mr. Page said, "We think a lot
about how to maintain our culture and the fun elements. We spent a lot
of time getting our offices right. We think it's important to have a
high density of people. People are packed together everywhere. We all
share offices. We like this set of buildings because it's more like a
densely packed university campus than a typical suburban office
park."[71]
However, many analysts are finding that as Google grows the company is
becoming more "corporate". In 2005, articles in The New York Times and
other sources began suggesting that Google had lost its anti-corporate,
no evil philosophy.[72][73] In an effort to maintain the company's
unique culture, Google has designated a Chief Culture Officer in 2006,
who also serves as the Director of Human Resources. The purpose of the
Chief Culture Officer is to develop and maintain the culture and work on
ways to keep true to the core values that the company was founded on in
the beginning — a flat organization, a lack of hierarchy, a
collaborative environment.[74]
Criticism
As it has grown, Google has found itself the focus of several
controversies related to its business practices and services. For
example, Google Book Search's effort to digitize millions of books and
make the full text searchable has led to copyright disputes with the
Authors Guild. Google's cooperation with the governments of China, and
to a lesser extent France and Germany (regarding Holocaust denial) to
filter search results in accordance to regional laws and regulations has
led to claims of censorship. Google's persistent cookie and other
information collection practices have led to concerns over user privacy.
A number of governments have raised concerns about the security risks
posed by geographic details provided by Google Earth's satellite
imaging.[75] Google has also been criticized by advertisers regarding
its inability to combat click fraud, when a person or automated script
is used to generate a charge on an advertisement without really having
an interest in the product. Industry reports in 2006 claim that
approximately 14 to 20 percent of clicks were in fact fraudulent or
invalid.[76]
Google (verb)
Google, now a verb meaning to use the Google search engine to obtain
information on the Internet ("I'll google it."), was added to the
dictionary because of its popular use in speech. The verb Google was
officially added to the Oxford English Dictionary (OED) on June 15,
2006, and to the 11th edition of the Merriam-Webster Collegiate
Dictionary in July 2006. See Google (verb) for more information.
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