Business

How Did The Google Website Become A Trillion Dollar Company

The website owned by the company Alphabet, Google is less of ‘a search engine’ and more of ‘the search engine’. The search engine has become synonymous to the internet. So many search engines came and so many went away but one that always stayed is Google.

It’s success can be seen in the fact that it has actually become a verb. We don’t search for something on the internet. We google it. That’s what success is in it’s true form.

When there’s a great dream, you must catch it.

Larry Page

History of the website company: Google

The google website company

Google search was created by Stanford University Ph.D. students Larry Page and Sergey Brin in early 1996.

In 1996, Page had a dream about organizing the Internet while he was a graduate student at Stanford. He turned that dream into a search engine and called it BackRub.

Within a year it became obvious that the search engine was going to become a widely adopted commercialized product.

When Page tried to Sell Google company for $1 Million

In January 1997, Page offered to sell BackRub to an Internet portal called Excite for a total of $1.6 million.

In a letter to Excite’s primary investor, Vinod Khosla, Page said BackRub would boost Excite’s traffic by 10% and its ad revenue by $47 million over a year.

Page was willing to work for Excite for seven months before he had to come back to Stanford in the fall.

Page said he’d take $600,000 in cash and $700,000 in stock. The remaining $300,000 would go to Stanford.

Khosla made a counteroffer of $750,000. Then, in a meeting with Page, Excite’s CEO George Bell said that BackRub was too effective of a search engine. It would end up sending users off the website too quickly which would obviously be bad for company’s advertising revenue.

So the deal never happened, of course.

I believe this must be Excite’s biggest loss, to turn down the company which is worth more than $1 trillion dollar right now.

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Advertising was not Google’s top priority

I know it’s quite contrary to what’s happening right now. Google is now one of the most powerful forces in online advertising in the world. But both Page and Brin weren’t too keen on turning their prototype search engine into an ad-selling machine initially.

In a Stanford paper titled, “The Anatomy of a Large-Scale Hypertextual Web Search Engine,” they specifically mentioned that their search engine that would not be biased toward organizations that paid higher for higher placement. The article went like this:

In general, it could be argued from the consumer point of view that the better the search engine is, the fewer advertisements will be needed for the consumer to find what they want. This of course erodes the advertising supported business model of the existing search engines. However, there will always be money from advertisers who want a customer to switch products, or have something that is genuinely new. But we believe the issue of advertising causes enough mixed incentives that it is crucial to have a competitive search engine that is transparent and in the academic realm.

Page decided to hand over the role of CEO to Eric Schmidt- 2001

The company was growing at a rate which was overwhelming for the college dropouts.

Page had decided to fire all the project managers because he felt the company isn’t working the way he wanted it to. Although the decision was reversed, eventually.

For their own and company’s good, Eric Schmidt was given the position of CEO which Brin famously it in a television interview described as ‘parental supervision’.

The fact that they realized that sometimes just building something incredible isn’t enough is inspiring. It’s management is an equally important and difficult task. A task that they both weren’t really good at.

Yahoo wanted to buy the Google (website)company in 2002

Then Yahoo’s CEO, Terry Semel was willing to pay $3 billion to buy Google. He had recognized the company’s potential but Page and Berin refused for the settlement.

Page in, Schmidt out

Fast forwarding 10 years, Schmidt ended his tenure at Google with the cheeky tweet, “Day-to-day adult supervision is no longer needed.”

He shifted to being executive chairman as Page was ready to take the reins back.

2015: Sundar Pichai replaces Page

By this time, Google company became way more than just a website. The company was involved in self-driving cars, wearable technology, the Nexus smartphone line, and numerous other product and experimental research efforts spanning artificial intelligence, cloud and quantum computing, and even fiber internet.

Page and Berin decided to make the company more organized and cleaner and named it Alphabet and it would remove the duo from any day to day operations at google proper. Sundar Pichai was designated the post of CEO of Google.

A lot happened after that too but let’s just jump to what’s google website’s worth is right now, as a company.

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The Google Company’s Worth Right Now

In early 2020, Alphabet became the third American tech company to be worth $1 trillion in market value, joining Apple and Microsoft.

The price of GOOG, Alphabet’s Class C shares, is $2,760.04 as of Aug. 9, giving Google’s parent company a current market capitalization of $1.831 trillion. In addition to its Class C shares, there are also shares of GOOGL, Alphabet’s Class A common stock. Both types of shares are currently trading at almost similar prices.

Key Products Contributing to Revenue

  • Google Services: Includes Google Search, Google Maps and the Google Play app store
  • YouTube ads: Alphabet’s fastest-growing ad source; up 83% from last year for over $7 billion in revenue, according to CNBC
  • Google advertising: Google ad revenue was up 69% from last year, CNBC reported

Conclusion

Google which once was just a website or a search engine, has become a trillion dollar company now. I think that’s motivating enough for all of us to believe in our vision and go for it. Larry Page and Sergey Brin have been the one of the greatest entrepreneurs of all time and they help us believe that everything is possible if you work hard for it.

Just imagine if in 1996, Page had sold Google for $1 Million, what might have been!

So make a smart, sometimes risky move when it comes to business.