Jun 30, 2025 · 3h 39m · acquired
Google Part I: Origins of Search. How the Best Business in Human History Happened (Audio) · Acquired
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In this comprehensive episode of Acquired, Ben Gilbert and David Rosenthal chronicle the origins, technical breakthroughs, and business strategy of Google, exploring how Larry Page and Sergey Brin built the most profitable business engine in corporate history. The hosts analyze the development of PageRank, commodity distributed computing, the revolutionary AdWords auction model, and the aggressive distribution flywheels that secured Google's global search monopoly.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ben and David hold 99.8% of the talking time here. How this is scored →
Ben and David as informed peer 8.5 Guest teaching 1.1 Guest disagreement 1.0 Ben and David pushing back 1.0
speaking balance: gold is Ben and David, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 31:40 Excite CEO Dismisses PageRank Algorithm
David re-enacts the Excite CEO rejecting PageRank because fast, accurate search would decrease dwell time and harm their CPM ad impressions.
Hardest push from Ben and David ▶ 2:27:20 Larry Page Rejects Risk Aversion on AOL GuaranteeBen quotes Larry Page pushing back decisively against internal conservative warnings regarding the $100M revenue guarantee to AOL.
Biggest teaching moment ▶ 3:15:50 Gmail's Prototyping Directly Spawned AdSenseBen shares an exclusive insight from Paul Buchheit showing that AdSense was born out of experimental ad matching inside early Gmail code.
Ben and David hold their own ▶ 2:34:20 Ben Explains Auction Marketplace Liquidity DynamicsBen breaks down the mathematical feedback loop where scale uniquely increases revenue per search unit rather than merely reducing unit costs.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ben and David as informed peer | Guest teaching | Guest disagreement | Ben and David pushing back | Why |
|---|---|---|---|---|---|---|
| Pre-Show Banter: Studio Reflections Before Radio City | 8 | 1 | 1 | 1 | Ben and David open with casual banter about their upcoming Radio City Music Hall live show before diving into framing Google's historical significance. Ben demonstrates strong domain expertise by citing specific corporate profit benchmarks and antitrust market share data. | |
| Larry Page and Sergey Brin Meet at Stanford | 8 | 2 | 1 | 1 | David details Larry Page and Sergey Brin's academic family backgrounds and their initial meeting at Stanford. Ben complements the narrative with insights on co-founder parity compared to other historical tech partnerships. | |
| From Web Annotation to the Concept of PageRank | 9 | 1 | 1 | 1 | The hosts explain the technical evolution from Larry's initial web annotation dissertation concept to the PageRank algorithm. Ben draws sharp parallels to academic citation analysis and the informational value of anchor text metadata. | |
| The Backlink Challenge: Crawling and Indexing the Entire Web | 9 | 2 | 1 | 1 | David and Ben discuss the engineering challenge of computing backlinks, which required crawling and indexing the entire web. They highlight failed early licensing attempts with Excite, noting how Excite's portal business model created an inherent conflict with efficient search. | |
| Renaming to Google and Designing the Minimalist Homepage | 8 | 1 | 1 | 1 | The discussion covers the transition from BackRub to Google, the origin of the name, and the creation of the minimalist homepage. Ben notes how Google's surging query volume rapidly overwhelmed Stanford University's network bandwidth. | |
| Connecting with Stanford Professor Dave Cheriton | 8 | 1 | 1 | 1 | David recounts Google's legendary angel round, including Andy Bechtelsheim's spontaneous check written to a nonexistent entity and Jeff Bezos's early participation. Ben adds contextual perspective on Bezos's relative seniority in 1998. | |
| The 1998 Search Landscape and AltaVista's Technology | 9 | 1 | 1 | 1 | David explains the 1998 search landscape and AltaVista's origin within Digital Equipment Corporation (DEC). The hosts dissect the three pillars of search competitiveness: relevancy ranking, crawl index size, and query speed. | |
| Yahoo's Directory Model vs. Google's Search Vision | 8 | 1 | 1 | 1 | Ben and David contrast Yahoo's human-curated directory paradigm with Google's programmatic approach. Ben explains why directory models were briefly adequate for a small web but structurally unscalable as content exploded. | |
| Distributed Computing and Corkboard Data Centers | 9 | 1 | 1 | 1 | The hosts delve into Google's foundational infrastructure breakthroughs led by Urs Hölzle and Jeff Dean. Ben explains how commodity hardware, corkboard-mounted motherboards, and software-level fault tolerance yielded a massive cost and speed advantage. | |
| Sponsor: Anthropic Claude for Deep Research | 7 | 1 | 1 | 1 | Mid-roll sponsor segment highlighting Claude by Anthropic, with Ben and David noting how Claude's deep research features aided their historical verification of Google's early financial filings. | |
| Hiring Omid Kordestani and Early Ad Sales | 9 | 1 | 1 | 1 | David and Ben discuss Google's Series A co-led by Kleiner Perkins and Sequoia, followed by the hiring of Omid Kordestani. Ben highlights early text ad validation using Amazon affiliate links to prove user purchase intent. | |
| Powering Netscape and the Crash Risk | 8 | 1 | 1 | 1 | The hosts detail Google's early OEM portal partnerships, notably Netscape and Yahoo. They recount Google shutting down its consumer homepage to prioritize Netscape query traffic and preserve the deal. | |
| The Search for a CEO: Hiring Eric Schmidt | 8 | 1 | 1 | 1 | David reviews the 16-month board-driven CEO search that led to Eric Schmidt's hiring, including the founders' cheeky request for Steve Jobs. Ben explains Google's unique cultural ethos of 'Googliness' and its enduring mission statement. | |
| Bill Gross, GoTo.com, and Pay-Per-Click Innovation | 9 | 1 | 1 | 1 | Ben gives an extensive breakdown of Bill Gross and GoTo.com (Overture), crediting Gross with inventing pay-per-click, self-serve portals, and keyword auctions. David and Ben discuss why paid search was initially viewed as heretical. | |
| AdWords 2.0: Integrating Click-Through Rate and Ad Rank | 9 | 1 | 1 | 1 | The hosts unpack AdWords 2.0 and the creation of Ad Rank. David and Ben demonstrate how weighting bids by expected click-through rate (CTR) mathematically maximized Google's revenue while simultaneously protecting user experience. | |
| Vickrey Auctions, Sheryl Sandberg, and Project Sunset | 9 | 1 | 1 | 1 | David explains the economic theory behind Google's adoption of the Vickrey second-price auction, referencing Sheryl Sandberg's discussions with Larry Summers. Ben adds how Overture abandoned CTR integration due to advertiser friction. | |
| Terry Semel's Bid and the Landmark AOL Search Agreement | 8 | 1 | 1 | 1 | The conversation covers Terry Semel's $1B buyout inquiry and Google's high-stakes bid to win AOL's search partnership from Overture. Ben emphasizes the existential risk of Google guaranteeing $100M in revenue when it lacked the cash reserves. | |
| Search Marketplace Liquidity and Executing the AOL Bet | 9 | 1 | 1 | 1 | Ben outlines the economics of search liquidity: higher query volume generates denser bidding, driving up revenue per search. This dynamic allowed Google to aggressively outspend competitors on traffic acquisition costs (TAC). | |
| Distribution Tactics: Google Toolbar and Ecosystem Bundling | 9 | 1 | 1 | 1 | Ben and David analyze Google Toolbar as a strategic distribution vehicle to circumvent Microsoft's browser dominance. Ben provides specific unit economics showing how Toolbar multiplied search frequency and user lifetime value. | |
| Google Desktop, Toolbar, and Sundar Pichai's Arrival | 8 | 1 | 1 | 1 | The hosts touch on early desktop client software, the arrival of Sundar Pichai in 2004, and the genesis of Google AdSense. David explains how AdSense extended Google's monetization beyond search queries onto contextual publisher pages. | |
| Scaling Infrastructure, Search Algorithms, and 2003 Financial Surge | 8 | 1 | 1 | 1 | David and Ben discuss Google's financial explosion in 2003, reaching $1.5B in revenue and $350M in operating income. Ben details technical refinements in search including dynamic synonym generation based on user query revisions. | |
| The Unconventional 2004 Google IPO and Modern Valuation | 9 | 1 | 1 | 1 | The hosts examine the 2004 Google IPO, including the pioneering dual-class share structure and the flawed Dutch auction pricing mechanism. They contrast Google's historical valuation run with its current relative PE multiple. | |
| Gmail's April Fools Launch and the Genesis of AdSense | 9 | 2 | 1 | 1 | Ben reveals that the foundational concept for AdSense originated during Paul Buchheit's early development of Gmail in his 20% time. David and Ben synthesize their seven main playbook takeaways for Google's early dominance. | |
| Seven Powers Analysis and Quintessence | 9 | 1 | 1 | 1 | Ben and David evaluate Google against Hamilton Helmer's 7 Powers framework, highlighting extraordinary scale economies in auction liquidity. They close with personal media carve-outs and contributor thank-yous. |
Statements from this episode (98)
Alphabet generates more net income than any other U.S. company
“Google, and I should say Alphabet today, generates more net income or profit than any other U.S. Company. More than Apple, Microsoft, Exxon Mobil, JPMorgan Chase, Berkshire Hathaway.”
Page and Brin's intense commercial ambition built Google, not accident
“I think there's this perception today that Larry and Sergey were these, like, bumbling academic guys who weren't really business-minded, and Google was a research project, and this all sort of happened by accident that they built the best business of all time.…”
Larry Page's ambition matched Mark Zuckerberg's
“Larry's a different generation and a very different personality than Mark Zuckerberg, but you should think about his ambition and his desire to build a huge world-changing company. At the same level as him.”
Larry Page and Sergey Brin first met at British Bankers Club
“And she told me that the first night of the weekend, so like the first event, the first time that they actually met, was at drinks at the British Bankers Club in Menlo Park.”
Sergey Brin graduated from the University of Maryland at 19
“He graduates high school at age 16, goes to the University of Maryland, gets his undergrad degree in both math and computer science in three years, graduates at age 19, and then, of course, gets into Stanford for his PhD.”
Google's zany projects reflect Brin while moneymakers reflect Page
“The zany parts of Google are sort of Sergey's DNA, and the really honed products, and products that make the business work are a little bit more Larry's DNA, but to be honest, there's incredible overlap everywhere between the two of them.”
The World Wide Web grew 723% year-over-year from 1993 to 1996
“From 1993 to 1996, the web grew from 130 sites to more than 600,000. And if you compute that rate of growth over that four-year period, it is 723% growth year over year for four years.”
Google's PageRank algorithm is named after Larry Page, not web pages
“It is ironic that the things that were being ranked were web pages, because the actual page in page rank is named for Larry Page, not for the pages they would rank.”
Backlink anchor text describes websites better than self-authored on-page text
“When someone is linking to you, they often do a better job of describing your website than you do on the page yourself. Anybody that's just sort of looking at your website to try to figure out, what's this about? The actual words on your website tend not to do…”
Google could not have been built at any other time
“Google could not have been built at any other time in history.”
Rosenthal: Crawling the entire web from scratch became impossible by 1998
“If you had tried to undertake this as a brand new project, even just a year or a couple years later, it would have been impossible, because the web would have already gotten so big that to just start de novo and create a index copy like this, like a full copy.”
Gilbert: Indexing the full web would cost hundreds of millions by late 1990s
“Even one year later would have been tens of millions of dollars, and within a couple years would have been hundreds of millions of dollars.”
Classmate Scott Hassan rewrote Larry Page's broken BackRub crawler in Python
“He writes it in Java and it's like super buggy and basically doesn't work. So they ask one of their friends there at Stanford, a guy named Scott Hassan, to help them. Scott's a better coder than Larry and Sergey is. So he codes it up in Python and it actually …”
Rosenthal: Yahoo acquired Scott Hassan's eGroups for about $400 million
“Scott leaves, starts a company called eGroups. That company, a couple years later, ends up getting acquired by Yahoo, becomes Yahoo Groups for about four hundred million dollars.”
Excite licensed Google's Backrub search technology for $1M in 1997
“And Vinod is on the board of Excite. And so somehow Larry and Sergey, and I think they bring Scott along, get a meeting with Vinod and they hammer out a deal that Excite is going to license this back rub search technology from the two of them for about a milli…”
Portals optimized for retention while Google optimized for exit speed
“This is basically why Google beat Yahoo. I mean, there's a lot more to it, but The portals all had this mentality of we want to build more and more and keep people on our site, in our ecosystem, continue to look at our banner ads, and Google, from this point, …”
Yahoo rejected an offer to buy PageRank for $1 million
“They tried to sell PageRank to Yahoo for one million dollars and were rejected”
Google founders rejected the name 'Whatbox' over adult site associations
“The name is Whatbox.
Whatbox?
Whatbox.
It rolls right off the tongue.
You know, it's a box that you type stuff into, sort of a question.
But they decided that it sounded too close to a porn site, so they decided not to go with it.”
Sergey Brin designed Google's first logo in open-source program GIMP
“So Sergei designs the homepage and makes the first logo using the open source drawing program GIMP.”
Google was processing 10,000 queries per day by spring 1998
“By spring quarter of that year, Google, google.com, is doing 10,000 queries a day”
Early Google consumed about half of Stanford's total network bandwidth
“At one point, they're using about half the bandwidth of the entire university to be serving out google.com pages.”
Stanford received roughly 1% of Google in tech transfer spinoff
“As part of the tech transfer to spin it out of the university, they end up getting like one percent of the company or something like that.”
Jeff Bezos took 25% of Google's $1 million seed round
“And so all in, they end up raising a million dollars, had a ten million dollar post-money valuation, and yes, Jeff Bezos does a quarter of Google's seed round.”
Jeff Bezos's Google seed investment would be worth $20 billion today
“Jeff has never said whether he sold any of his Google shares along the way, but by my math, if he didn't, that stake is worth about twenty billion dollars today.”
Rosenthal: Web Crawlers Before AltaVista Were Single-Threaded
“Before AltaVista, all the other web crawlers out there that were building search engines, they were just, like, single-threaded processes. You'd go crawl one page, and then you'd go crawl another page, and then you'd go crawl another page.”
AltaVista Launched Commercially with 16 Million Indexed Pages
“So when AltaVista spins out of deck and launches as a commercial company and entity in and of itself, it's big claim to fame is its index. It has sixteen million pages in its index versus the competitors.”
Rosenthal: Yahoo went from $1B IPO in 1996 to $20B by 1998
“They'd gone public in 1996 at a billion dollar market cap. By 1998, when google.com is launching as a company, Yahoo's a twenty billion dollar public stock.”
Gilbert: Human-curated web directories cannot scale as internet content multiplies exponentially
“When you have a small number of total websites, curating them is interesting, but when you have 10,000 times more websites and 10,000 times more niches that people are interested in, directory is not going to be an efficient way to surface what people are look…”
Rosenthal: Urs Hölzle ran Google's infrastructure from 1999 until 2023
“Urs is now a fellow, but he ran all of Google's infrastructure from 1999 until 2023.”
Jeff Dean built AdWords, AdSense, MapReduce, and Gemini
“He also implemented the first version of AdWords, built AdSense, rewrote the core search pipeline five times, co-invented and implemented Bigtable MapReduce, TensorFlow, and Gemini.”
Rosenthal: Google search scaled only because of Urs Hölzle and Jeff Dean
“It's amazing that they attracted them because prospects were not good that all of this would work in scale, and it was only because of these guys that it did.”
Rosenthal: Google split its search index into 64MB distributed chunks
“Google needed like the entire page to compute all the rankings and find the links, find the backlinks. They needed to architect Google with this huge distributed computing system. So the index was so big that it wouldn't fit on A single machine or a single ser…”
Rosenthal: Early Google server hardware failure rate exceeded 10%
“So I read that industry average server hardware failure rate at the time was around like three to four percent per year. Google's hardware failure was over 10%.”
Google technically became the world's largest computer manufacturer
“Pretty quickly, maybe even while Google is still a private company, they technically become the world's largest computer manufacturer.”
Early Google colocation agreements billed strictly by square footage
“And then they put, like, the RAM in there, and they put hard drives in there, and then they just stuff them in their data center racks. The photos of these early Google quote-unquote server racks are crazy because the way that their agreements worked in the co…”
Rosenthal: Apache Hadoop originated as Yahoo's copy of Google MapReduce
“Yahoo would eventually feel like they needed to copy MapReduce to be competitive, and they would open source that as Hadoop, so people, Apache Hadoop, that is a Yahoo copy of Google's MapReduce.”
Rosenthal: Google's early commercial revenue came from a $20,000 Red Hat deal
“They sold this enterprise search deal to Red Hat for 20,000 dollars.”
Sequoia and Kleiner Perkins aggressively split Google's Series A round
“Famously, Kleiner and Sequoia end up splitting the deal, and Michael Moritz and John Doerr, the two most legendary VCs in the world, they team up, they join forces, they split the deal, and they both join the board of Google at the Series A.”
Top VCs gave Google a $100M Series A valuation pre-revenue
“They just...
Paid a hundred million dollar post for a Series A company with no revenue.”
Founders insisted on text-only ads to preserve search page speed
“So importantly, Larry and Sergey insisted that, okay, if we have to have ads on here, they need to be text only.
We can't serve images and banner ads like everybody else does, because that'll slow down the page.”
Rosenthal: Early Google Ad Insertion Orders Had to Be Received by Fax
“All ad insertions were done by fax at this time. So Google had to install fax machines at its headquarters to take these insertion orders for these ads that they were selling.”
Jeff Dean built Google's first ad test using Amazon affiliate links
“Jeff Dean codes it up so that dynamically, as users are searching, if there's a query that is related at all to Any book in the Amazon library catalog, Google will dynamically generate a text ad saying, go buy this book at Amazon, insert an Amazon affiliate li…”
Gilbert: Search Ads Outperform Display Ads Because Queries Capture Commercial Intent
“Click-through rates on search ads are higher than ads that are just randomly around the internet, because someone is intending to buy something. They have high intent. That's a great place to show An ad. The click-through rate's gonna be higher.”
Google shut down Google.com in 1999 to serve Netscape traffic
“In 1999, they shut Google down so that they could serve Netscape's users.”
Gilbert: 1999 Netscape deal brought Google three million searchers daily
“I mean, so the Netscape deal brought in three million total searchers per day.”
Yahoo invested $10M and powered Google's search backfill in 2000
“In June of 2000, Google signs the deal with Yahoo that they are gonna take over All organic search result backfills on yahoo.com with the Powered by Google branding, and Yahoo is going to invest ten million dollars in Google as part of this deal.”
Gilbert: Google traffic doubled to 14M daily searchers on Yahoo deal day one
“So traffic doubled to fourteen million searchers per day on day one of this deal.”
Rosenthal: Yahoo paid Google $7.2M for search results in 2001
“And the next year in 2001, the first full year of this Yahoo portal search deal, Yahoo pays Google 7.2 million dollars for organic search results.”
Doerr extracted promise from Page and Brin to hire professional CEO
“John Doerr had very begrudgingly extracted a promise from Larry and Sergey to hire a quote-unquote professional CEO.”
Page and Brin told VCs only Steve Jobs met their CEO bar
“There's one person that we met in this whole process who we think meets our bar, who we would be willing to come in and hire as our CEO here at Google. Oh God, who is it? Steve Jobs.”
Gilbert: Google would have rejected Eric Schmidt if he used a heavy hand
“It was so uniquely googly that there would have been organ rejection if Eric tried to take a heavier hand.”
Google's iconic mission statement dates back to its first 1999 press release
“And it's this culture that comes up with a mission statement to organize the world's information and make it universally accessible and useful. I mean, this was in 1999 in their very first press release after the financing. That has been the mission statement.”
Yahoo's partnership inadvertently saved Google from the dot-com crash
“Google's gonna survive the dot-com crash between the ten million dollar investment from Yahoo plus the revenue from that portal deal.”
Google initially monetized search ads using a fixed CPM model
“They're giving advertisers this great product of, hey, we have intent of people searching for these keywords, but Google's just getting paid on a straight CPM basis for what they're selling. They're not participating in the economic value.”
Gilbert: GoTo.com reached $100 million in revenue in its first year
“Goto did a hundred million in revenue in one year.”
Gilbert: Google settled Overture's ad auction patent infringement for $360M
“Google did eventually end up owing them three hundred and sixty million dollars for infringing.”
Page and Brin offered to sell Google to GoTo for $200M
“And Larry and Sergey Before they raised the Sequoia and Kleiner round came to Bill and said, what about two hundred million?”
Rosenthal: Google would not have succeeded if GoTo acquired it
“Well, there's almost zero chance that Google becomes Google if that deal had happened, so”
Overture had 8,000 advertisers when Google had only a couple hundred
“They had 8000 advertisers against Google's, you know,
Couple hundred.
That they were selling by hand.”
Multiplying bid price by click-through rate mathematically maximizes ad revenue
“If your formula for placing ads is a combination of the price that an advertiser is willing to pay per click and the click through rate of the ad,
Well, that's actually the mathematically optimal formula for maximizing your own revenue as Google.”
Gilbert: High click-through rates allow relevant advertisers to win auctions with lower bids
“If you're a better advertiser for that
Keyword, then you actually get to pay a lower price.
If people are more natural to click through to your service and transact on your product, you get the privilege of bidding lower prices and still winning the auction.”
Google's initial AdWords launch had self-serve and ad quality without CPC auctions
“The first version they launch includes self-serve and includes ad quality.
But it doesn't yet include CPC or the auction, which is funny.”
Great companies deliberately leave their potential profit unextracted
“Every great company has like a stored potential energy of value maximization that it doesn't fully maximize. Like Costco is the extreme example of this, but Google has this too.”
Google generated $10M profit on $86M revenue in 2001
“Google for the year ultimately did eighty six million dollars in revenue that year, and ten million dollars in profit. So, turned profitable in 2001, like, great numbers by any metric for a startup, and especially in the middle of the dot com winter.”
Gilbert: Half of Google searches were international with zero ad sales
“The other thing that's happening at this exact same time is Eric Schmidt arrives and discovers that 50% of Google's searches are outside the U.S., but they have no international ad sales.”
Gilbert: Google's international revenue expanded from 18% initially to half of business
“Year one, because Omid spent the whole year on the plane, 18% of revenue is now international. 2002, it grew to 22%. 2003, it grew to 29%. Today, it's half of Google's business”
Yahoo CEO Terry Semel offered $1B to buy Google in 2001
“As recently as late 2001, just months before, there's a dinner with Terry Semel, who's the CEO of Yahoo.
Kind of big media executive guy, comes in, takes over, is the big media CEO.
And he sits down with the founders and he says, so guys, I think we're your bi…”
Rosenthal: Google grew revenue over 5x from 2001 to 2002
“Yep, they more than five X revenue from 2001 to 2002, from the eighty six million to four hundred and forty million in revenue.”
Google gave AOL an 85% revenue share to dominate search
“Google will then share back
85 cents on the dollar to AOL for all of that revenue.
AOL wants two things in exchange for turning over their entire business in the search advertising world to Google.
One is, we want warrant coverage, so what they end up getting …”
Gilbert: Market Volume Increases Likelihood of Perfect Ad Matching
“Basically, the more volume you have in your market, the more deeply traded the market, the more likely you are to have an ad that has perfect product market fit with the query.”
AOL Earned $35M in 2002 and $200M in 2003 from Google Deal
“AOL made thirty-five million dollars in 2002, the first half year of the deal alone, and then in 2003 made two hundred million dollars.”
Gilbert: AOL Deal Made Google a Major Ad Player Over Overture
“This made Google a major player in the paid listings market almost overnight, and they weren't at all before. Overture dominated this market before.”
Auction-based search exhibits increasing returns to scale as volume grows
“Having marketplace liquidity means you always generate the most revenue per search versus other smaller search engines. So it's not just that unit costs go down, it's that as they scale their revenue per search actually goes up due to the auction system.”
Gilbert: Google gave partners up to 100% rev share, including 85% to AOL
“Pay massive revenue share to your distribution partners. In some cases, up to a hundred percent of the revenues generated. We'll talk about who the distribution partners are in a second. But even earlier, we heard with that, ah, AOL deal, they were willing to …”
Gilbert: Global search is currently a half-trillion-dollar annual revenue market
“Search is currently half a trillion dollar annual revenue market.”
Google Toolbar users averaged seven times more searches
“Once Google toolbar was installed, a user averaged seven times the number of searches. Which makes them seven times more valuable. Which means you could pay a lot of money to get someone to install it.”
Google Toolbar lifted user ARPU from $2 to over $10
“The average annual revenue generated by a Google user was two dollars. But with Toolbar, it was 10 plus dollars. Even if you're being conservative. So that difference that somewhere of, you know, eight bucks a user call it, is your budget to play with.”
Gilbert: Google Monetized Google Earth Through Toolbar Bundling, Not Ads
“They just bundled Google Toolbar with the installs of Google Earth, and then it more than paid for itself. We don't need to do ads.”
Rosenthal: Google Has the Best Business Model in Corporate History
“It's the same beautiful ballet where every piece of the Google business model works together and reinforces the other pieces, and in concert it creates the best business model of all time.”
Gilbert: Sundar Pichai joined Google in 2004 to lead Toolbar team
“In 2004, a new PM is hired by Google. They come in and they take over this application's client team that includes Google toolbar. That PM is Sundar Pichai.”
Rosenthal: Google Toolbar was a secretive strategic linchpin for Google
“How important Google toolbar was and how secretive the company was about this really being like the strategic linchpin of what they were doing. ... Or a strategic linchpin.”
Jeff Dean built Google AdSense in just six weeks
“Legendary Google engineer Jeff Dean. Builds AdSense in six weeks. The whole system.”
Gilbert: Most Google AdSense click revenue goes to website publishers
“Most of the revenue on a click in Google AdSense actually goes to the website publisher, and Google takes the smaller part as their SPF.”
Rosenthal: Google AdSense surpassed $1M per day in revenue by late 2003
“They launch AdSense. By the end of the year, so just a few months later, it's doing over a million dollars a day in revenue.”
Gilbert: Google Used 200 Ranking Signals by 2007
“Later, by 2007, they were using 200 different pieces of information to determine the ranking on a query.”
Gilbert: PageRank Is No Longer Google Search's Primary Differentiator
“PageRank really is the thing that got Google going, but that part of the algorithm isn't really the thing that's the main differentiable asset today.”
Rosenthal: Google Hit $1.5B Revenue, $350M Operating Income in 2003
“2003, that explodes to one and a half billion in revenue and almost three hundred and fifty million in operating income.”
Google AdWords maintained an incredible 85% gross margin
“And as best we can understand it, Google AdWords stayed an 85% gross margin business.”
Google's 2004 IPO minted 1,000 employee millionaires
“This IPO made half of the 2000 people who worked at Google millionaires.”
Gilbert: First-day IPO pops harm existing shareholders via underpricing
“A pop is a bad thing for existing shareholders. It means that in the IPO, you incorrectly priced it too low, and then within one day, upside that should have, or really like is yours because it happened in all the intrinsic value was built all over these years…”
Rosenthal: Google was first tech company to use dual-class shares
“Google was the first tech company to do this.”
Rosenthal: No company has done a Dutch auction IPO since Google
“Dutch auction IPO. Not a great idea. Nobody has done it since.”
Gmail launched with 1GB of storage when rivals offered 2MB
“Web-based email from Google with one gigabyte of free storage for every single user. Now to put that in context, Yahoo and Hotmail, Yahoo Mail and Hotmail at the time had like two megabytes of free storage per user.”
Gilbert: Paul Buchheit originally coined Google's 'Don't be evil' motto
“Paul Buchheit is awesome, and recently launched a new venture fund, and actually the original coiner of the term, don't be evil, at Google.”
Google AdSense originated from the prototyping process of Gmail
“And so the thing that led to AdSense Was actually part of the prototyping process of Gmail.”
Rosenthal: Google launched in a uniquely narrow historical timing window
“If Larry and Sergey had met and started working on this a few years earlier, it would have been Yahoo! Because the web was just so much smaller. Like, you didn't need a technology-based search engine to understand it. And then if they'd started a few years lat…”