Introduction

The World’s Librarians

Good luck. I’ve been trying to do that for some years.

—Google CEO Eric Schmidt after being told the title of this book

T he world’s first great library was the Great Library of Alexandria. It was created by Ptolemy I, a childhood friend of Alexander the Great and a general in his army. Ptolemy inherited rule of Egypt—which the army had conquered—after Alexander’s death in 323 B.C. Ptolemy made the small, backwater town at the mouth of the Nile, named after the great conqueror, his new capital. By creating the library, somewhere around 300 B.C., he turned his city into a thriving center of intellectual thought envied by the world. It reigned as the greatest library in the world for three hundred years.

Ptolemy’s goal was to collect all the written works in the world and put them in one place. By the time the library was destroyed, it was said to contain more than five hundred thousand papyrus scrolls, collected over three hundred years. The library played a critical role in the Hellenistic Age, the period during which Greek culture spread into much of civilized Europe, Africa, and Asia. Probably no other library has had such influence on cultures and knowledge—until the great library of the Internet was created more than two thousand years later.

The Internet’s librarians sit today in a tidy campuslike business complex in Mountain View, California, the epicenter of Silicon Valley. It’s a campus of modern steel, concrete, and glass structures interlaced with trees, gardens, walkways, and artificial ponds and streams, where people travel by bicycle, by scooter, and on foot among—or inside—the buildings. These librarians are a universe away from the gray-haired ladies with glasses dangling from chains around their necks and an incredible knowledge of the Dewey decimal system of many childhood memories. This, after all, is the electronics age.

Google Inc., a thriving corporation teeming with youthful and smart computer scientists and an incredible knowledge of the Internet, has become the de facto head librarian of the world’s information; the entity that guides us through the labyrinthine web of online information, philosophy, entertainment, opinion, debate, slander, pornography, art, and worthless blather that the geeks and executives of the Internet like to lump into the single category of “content.”

Larry Page and Sergey Brin did not create the Internet (although they now employ one of its key architects, Vint Cerf). But if anybody embodies the soul of the world’s head librarian, it’s the brainy pair of Larry and Sergey. They created the heart of Google’s philosophy, its business tactics, and the ethos behind all major issues—from censorship to user privacy to entering new markets and trying to change the business tactics of existing corporations.

Google Is Ethical

They’re unlikely business moguls. Larry is the more socially awkward of the pair. Heavily eyebrowed, thick-lipped, with a perpetual five o’clock shadow and conservatively cut black hair always in need of a comb, he rarely volunteers to answer questions unless specifically asked to address them. When he does, it’s with a methodical intonation that sounds like a baritone version of Kermit the Frog. Sergey is also shy with outsiders, but more poised, with a piercing stare and curly brown hair piled on top of his head as though it’s unable to settle down. They work together on all major company decisions, from ethical issues to product design, usually in meetings that can be brutally taxing. But Larry, as president of Products, is the primary thinker about the company’s future direction, and weighs in heavily on key hiring decisions. Sergey, a mathematical wizard and president of Technology, is the arbiter of Google’s technological approach and shows deep interest in the company’s moral stance.

Facing questions from shareholders and the press at a recent corporate annual meeting, Larry sat stiffly in his chair, straight-backed in a blue dress shirt and brown slacks, his hands on his knees, one of them holding a microphone as if he didn’t know quite what to do with it. Sergey was more relaxed in a brown T-shirt and faded jeans. He sat comfortably with his forearms resting on his legs, looking over the crowd with an air of intelligent and confident interest, more willing to address sensitive topics than one would expect from such an intensely private entrepreneur.

At this meeting, Amnesty International had presented two proposals, demanding that shareholders require the company to set up a human rights committee to examine its practices in China, with the aim of limiting censorship there. Management felt that this was already being done, and rejected the proposal. But in a show of solidarity with those who have concerns about the issue, Sergey decided to abstain from voting his shares, neither agreeing nor disagreeing with it. True, it was a largely empty gesture, since the board and management had plenty of votes to reject it, but he wanted to demonstrate an acknowledgment of the difficulty of the issue. Larry and CEO Eric Schmidt voted against the proposal.

I asked Sergey why he abstained, and he explained that he was sympathetic to the cause and agreed with the proposals in spirit. “Directionally, the two proposals are correct,” he said. “I think there is certainly room for us to have a group of independent people in Google who meet regularly to discuss these questions,” he said. But he also said he was proud of Google’s actions in China, where he felt the company’s record was better than that of its competitors.

Google Uses New Business Tactics

It’s just one of many issues that have focused the spotlight on Google’s ethical stance since the company was founded in late 1998 by these two Stanford University computer science graduate students. Google came out of a project that only a computer scientist could love: developing technology to search through large electronic databases of published research papers. Instead, they came upon a much greater solution—a better way to search through the giant morass of data that is the Internet—and ended up turning their technology into one of the biggest, most influential companies in technology today.

But technology alone does not make a successful company. Business tactics do. Larry and Sergey have created a unique company with a new kind of business model, employing tactics that fit the Internet Age like Alexandria’s Great Library fit the Hellenistic Age. Google may not last three hundred years, but it still has a huge future in which its influence will continue to grow.

To say Larry and Sergey struck the right business chord would be the understatement of the twenty-first century. When they launched Google, they were entering a war that pundits were insisting they had already lost before they even got started. In mid-1998, it was Yahoo Inc. that sat on top of the World Wide Web. Yahoo had become one of the premiere Internet sites, the place where 75 percent of Web searches were begun. More than twenty-five million people visited Yahoo every month. In September 1998, it became one of the first pure Internet companies to claim a profit.

The previous March, Fortune magazine had summed up the prevalent view: “Yahoo! has won the search-engine wars and is poised for much bigger things,” its editors declared. Its stock was soaring past $100 per share, on its way to a peak of $230 at the end of 1999.

Then it all fell apart. By mid-2000, Yahoo’s stock was in free fall, on its way to hitting the bottom at under $5 a share. Yahoo CEO Tim Koogle, once hailed as a great Internet visionary, was a year from being fired. Nobody seemed to know what hit them. Whatever it was, it missed Google.

What happened was that the world changed. Before December 31, 1999, Y2K paranoia was scaring corporations worldwide into pouring billions of dollars into new computers and software. Technology companies were growing fat, and their stock prices were growing fatter. A robust market for technology stocks inspired venture capitalists to pour money into dot-com companies and take them public on nothing but a business plan and a prayer. Day traders followed their lead and bid up the dot-com stocks. The stock market was soaring so high that the Federal Reserve tried to cool irrational exuberance by raising interest rates.

Every one of those moves turned out to be wrong. On January 1, the Y2K panic proved to be unfounded and the money tap that fed Silicon Valley was shut off. All at once, corporations stopped buying computers. Profits at technology companies plunged, their stock prices were sucked down with their declining earnings, and high interest rates made it worse. The unprofitable dot-com companies saw their stock prices drop to pennies a share, and venture capitalists (VCs) stopped investing. The real Y2K disaster turned out not to be crashing computers, but a crashing Internet market, triggered by the end of the Y2K fear-induced spending.

Google Stands Out

But there was one standout. As the cash flow that had kept the technology world afloat reversed direction, Google seemed to catch the runoff. In January of 1999, the Google search engine was handling ten thousand search queries a day. A year later, this had grown to ten million per day. Google took in revenues of $200,000 in 1999. In 2000, the start of the technology recession, its sales grew by 940 percent, to $19 million. By the end of 2002, when most dot-com companies were either desperately dehydrated or dead, Google’s revenues had bloated to $440 million. In 2003, just four years old, its sales hit $1.5 billion, its profit was $100 million, and it had taken over some 80 percent of the world’s search queries.

Why Google? It turned out the VCs were right about one thing. The Internet had created a huge change in businesses. But in this time of tectonic economic shift, most dot-com companies were still playing by the old rules. They didn’t notice the flaws in their strategy because they were being kept afloat by the billions of dollars from venture capitalists and day traders pouring into the industry. Larry and Sergey not only went with the flow of change, they also accelerated the pace.

Larry and Sergey figured out the new rules of business, piece by piece, driven by an overwhelming motivation to build a great company. They put together a business model for the Internet Age. They tinkered with different ways to make money and hit on the most profitable form of advertising anyone had ever seen. Big advertisers were doing their usual recessionary retreat, but Google focused on small advertisers looking for bargains. With no substantial competitors in either search or online advertising, Larry and Sergey arguably created an Internet advertising monopoly on a par with Microsoft’s domination of the PC software business. For better or worse—and it’s mostly better—Google has become the new Microsoft, while Microsoft is becoming the old IBM, overtaken by a new technology.

Google now employs about twenty thousand people, but just two of them set the pace and guide its evolution. Larry and Sergey work together like two halves of a well-balanced machine. CEO Eric Schmidt is responsible for growing revenues, but the decisions that Larry and Sergey make are the fuel that powers that revenue growth. Everybody in the company refers to them by their first names—sometimes as the single unit Larry-and-Sergey—but treats them like emperors, the final arbiters of all important decisions.

A young, smart, and athletic kid whose family escaped the oppression of the communist Soviet Union and a clever young geek from Michigan with a fondness for Legos would seem a very unlikely pair to create a business revolution. Asked by reporter John Ince in 2000 what Google’s biggest challenges were, Sergey admitted it was learning to run a business. “The most difficult part has been learning to deal with organizational challenges. We have over 70 people now. It’s a more complicated beast. It’s not very clear how to keep everybody productive and focused. That’s been more of a learning process. Business dealings . . . have been a little bit new to us.” ¹ But they’ve turned Google into more than just a great company. They almost single-handedly revived Internet businesses and changed the rules of commerce on the Internet.

Contrary to popular belief, Google’s success was not simply a matter of inventing a better mousetrap and watching the money flow through the door. The initial design of Google’s search engine did not have technology much more advanced than its competitors. It was how they used and refused to abuse the technology that mattered. Larry and Sergey have been successful because they have completely rethought the process of catching mice. Not surprisingly, they’re upsetting a lot of business fat cats in the process.

Their business model is completely transforming modern industries, including computer hardware and software, telecommunications, publishing, broadcasting, and entertainment. It is changing cultures and political systems. They have commercialized the Internet and started an Information Revolution the way Thomas Edison spurred the Industrial Revolution by harnessing electricity and saying, “Let there be lightbulbs.”

But revolutions do not come easily. They arrive like an invading army, pillaging industries in their path. One group’s revolutionary is another’s corporate terrorist. Google’s fans see it as a corporate version of Thomas Jefferson, or a freedom fighter trying to spring dissidents from a Gulag work farm. Its enemies think of it more like Joseph Stalin, and are mobilizing to attack Google like capitalist idealists fighting the Red Menace. Competitors, Hollywood executives, book publishers, copyright holders, privacy advocates, civil rights activists, and government regulators are menaced by Google’s Leonid Brezhnev–like secrecy and enormous power.

Google Has Unique Strengths

Google has two enormous strengths, neither of which is appreciated with nearly the awe it deserves. They have little to do with software, and almost everything to do with an Internetdominated culture and unparalleled computer power, both homegrown.

Google’s success made it inevitable that it would become the most controversial company that does not currently have top executives facing criminal prosecution over creative accounting practices. Google’s view of what’s evil and what is not gets it into a lot of trouble.

Much of the ire directed at Google is due to corporate resistance to the massive changes Google is thrusting upon the business world. Established companies, accustomed to a century of doing business in a certain way, are understandably confused by the rapid changes, and afraid of them. Google is the obvious target of anyone trying to stem the inevitable sea change in business. In the long run, fighting that change is akin to building a sandbar to try to hold back the coming tide. But that doesn’t stop them from trying.

Larry and Sergey are wickedly clever. They break the mold. They challenge old industries and make a lot of enemies. They’re ruthless businessmen. Most of all, they’re idealists, believers in the power of the Internet to make the world a better place.

They have a lot of fans and have been thrust onto the world stage. Larry and Sergey have become friends with Al Gore, Richard Branson, and San Francisco mayor Gavin Newsom, and they’re huge fans of Barack Obama. Mayor Newsom is one of the people greatly impressed with Larry and Sergey and what they’ve accomplished. “Google is a phenomenon the likes of which you rarely see in a lifetime,” he told me recently. “I just love these guys. They feel a profound responsibility to deliver great things because they’re capable of it. They want to have a life worth living. That’s what’s made them such a phenomenal success today.”

They’re not infallible, and they’re not saints. They make mistakes and happily drive competitors out of business. They have, at different times, irritated their investors, their CEO, Wall Street, and business partners. Competitors say they have created a monopoly, with all the power and danger that this brings. That problem is exacerbated by the fact that they operate with almost paranoid secrecy, and have mostly retreated from the public spotlight. They rarely give interviews and have an almost mystically enigmatic reputation second only to that of Steve Jobs. Unlike Jobs, however, they’re shy and awkward around non-geeks. Almost everybody who knows them well works for them. Says Robert Davis, the former CEO of onetime search company Lycos, “I’ve never met them. Can you imagine that? They’re about the only people in this industry that I haven’t met.”

Larry and Sergey are Google. Aside from their recent marriages, Google is their life. But even in marriage they didn’t stray far from Google. Larry married Lucy Southworth, a biomedical informatics doctoral student at Stanford who has done medical work in South Africa and “wants to better the world.” (They tied the knot in December 2007 at Richard Branson’s estate on Necker Island in the Caribbean.) Sergey married Anne Wojcicki, a biotech analyst whose company, 23andMe, Google has invested in. (Their May 2007 ceremony was conducted on a sandbar in the Bahamas to which guests either had to swim or take a boat to reach.) ² Anne’s sister, Susan, is a Google executive and the person who rented out her garage to Larry and Sergey to help them get started.

Google’s stinginess with information has become a running joke among journalists. When the San Francisco Chronicle informed Google it was going to report on Sergey’s marriage before the fact, spokespeople warned the paper’s executive vice president, Phil Bronstein, that it would damage the paper’s relationship with the company. His response was “What relationship?”

Google Sometimes Looks Evil

The problem is that a secretive company looks like a company with something to hide. The intrinsic mystery surrounding Google, and the founders in particular, is a huge problem, probably the biggest for a company that relies heavily on the trust of the people who use its products. Google must be trusted to protect the astounding amount of data it collects about people who use its services—from hackers, from spammers, and from government spies. Many people wonder if Google isn’t evil after all.

Google does not fit the profile of other companies we might consider evil. It has not been involved in any stock scandals. None of its executives has been forced to do the perp walk in front of TV cameras. It has not been accused of back-dating stock options. It has never been accused of fudging its financial statements.

Increasingly, Larry and Sergey find that their ideals, their dedication to the free dissemination of any information they can get their computers on, is landing them in court. Seven years ago, Google had one lawyer on staff. Now it has more than a hundred. At a shareholder meeting a few years ago, one stock owner stood at the microphone and asked, “What are you being sued for these days?” David Drummond, Google’s head attorney, responded, “How much time do you have?”

The question that seems to be on most people’s minds these days is whether Google is becoming an evil corporation. Certainly competitors, copyright holders, and others think so, because Google is infringing on their revenue base. Privacy advocates think so, simply by virtue of the fact that Google holds an incredible amount of data about individuals.

In the end, it’s tough for anyone to trust a company so big, so powerful, and in control of so much personal data about nearly everyone. One accidental security breach resulting in hackers’ obtaining personal data from Google’s archives—the most likely scenario of breaching the public’s trust—would be devastating to Google’s reputation. The question of whether Larry and Sergey can be trusted with all that data can never really be answered in the affirmative. But one mistake can answer it in the negative forevermore.

Larry and Sergey are in the position of Gary Hart, would-be presidential candidate in the 1980s who brazenly challenged reporters to find any scandals about him. The press promptly complied by catching him in an extramarital affair, thus ending his presidential aspirations.

In the case of “Don’t be evil” Google, it’s the bloggers who have set out to prove, in any esoteric way they can, that Google is becoming evil as it gets bigger. Most of the arguments are along the line that money and power corrupt, so Google is corrupt. As Google collects more information about individuals, it becomes Big Brother. These concerns may be real. But the arguments are overwhelmingly “what if?” scenarios, rather than actual examples of evil.

The latest culprit is the Web browser that Google launched in 2008, after saying for years that it was not interested in that market. But Larry and Sergey changed their minds, and people see this as a duplicitous change.

Clint Boulton, who writes the “Google Watch” blog for eWeek, asserts that the simple fact that Google is entering Microsoft’s territory makes it evil by default. “It’s hard to be the overwhelming leader in search and not be considered a monopolist, which in business is code for ‘evil,’ ” he writes. And, he adds, “It’s impossible to be that powerhouse, then launch a Web browser to serve as the gateway to your Web services and not be considered blackly evil.” ³ Boulton argues in a later blog that as a company becomes big, it needs more revenues to feed its machine and, as everybody knows, “more money equals corruption.” ⁴

The situation was exacerbated when the online site Valleywag actually read the onerous nondisclosure agreement that came with Chrome, Google’s new browser. It stated that any content that people “submit, post or display” when using Chrome automatically gives Google “perpetual, irrevocable, worldwide, royalty-free, and non-exclusive license to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute” the information. ⁵

It turned out that this was one of Google’s standard nondisclosure agreements, which slipped past without Google’s management noticing. Google quickly retracted it, replacing the agreement with the explanation “In order to keep things simple for our users, we try to use the same set of legal terms (our Universal Terms of Service) for many of our products. Sometimes, as in the case of Google Chrome, this means that the legal terms for a specific product may include terms that don’t apply well to the use of that product.” ⁶

But Google uses a very similar agreement when guest lecturers give talks at the company, a regular occurrence. San Francisco psychiatrist Thomas Lewis felt he was giving away the rights to his research in order to give an invited talk. When he complained, he was told to list beforehand everything he was going to talk about that he had the rights to, and it would be excluded. His lawyer told him to make the list huge, and wouldn’t mind if he came as close as possible to including everything in the world. He did so and gave his speech.

Or try Matt Asay, who writes The Open Road blog for CNET. Google has a group of applications that people can download for free, called the Google Pack. These programs are a mix of software from Google and third parties. Before Chrome, Google included the open-source Firefox browser as the default browser in the pack. After Chrome, it still offers Firefox as a choice, but now Chrome is the default choice. That move, Asay says, “has Google looking more like the old Microsoft monopoly it replaces.” ⁷

But, of course, it’s Google’s entry into China that gets the main criticism. In order to enter that market, by law it has to agree to censor the results of its own search engine. One alternative is to stay out of China completely, as a protest against censorship, which many Google critics insist would be the right thing to do. The other is to run a Chinese-language search engine offshore without censoring it, which would mean that access to the site would be cut off from China by the Chinese government anytime something came up that the officials didn’t like. And, in fact, Google does run just such an offshore search engine, in addition to the one based in China. It just doesn’t get much traffic.

Google executives have idealistic excuses for entering China, based mainly on the theory that some information serves the Chinese population better than none. That’s a fine argument, except that there are several other search engines operating in China to fill the gap (all of which also censor themselves), including China’s homegrown Baidu. All Google can claim to do is push the envelope as much as possible to free up information. Nevertheless, the decision to enter China is the one that nags most at the founders’ consciences—especially Sergey’s.

But Larry and Sergey are growing up, maturing with the company they command, learning to compromise and to mellow the mercurial pursuit of their idealism that dominated Google’s early days. And they’re going to be around for a long time. They’ve tackled the beast of business, and won.

They’ve also been lucky, and their rise has seemed almost effortless from the outside. But luck is insufficient fertilizer for growing a business as successful and dynamic as Google. There’s brilliant method in the founders’ madness. As usual, the angel is in the details.